Ofwat sets out details of customer service licence condition

Water companies will be held to account for poor customer service under new licence conditions being introduced by the regulator.

Meeting targets on communication, ease of contact, support and understanding of complex consumer needs are all set to be licence conditions for water companies from 2024.

Ofwat has laid out what the customer focused licence condition will look like to formalise behaviours it previously encouraged from the sector.

Ofwat said the condition, first proposed in March last year, was to redress the “distinct lack of customer service requirements” companies are currently subject to.

It said this would be a key tool for driving up performance and Ofwat could hold companies to account to ensure they meet “the full diversity of customers’ needs”.

Stakeholder engagement broadly showed support for Ofwat’s idea that customers should expect to be well informed, have confidence that if something goes wrong it will be put right, and that all consumer needs are identified, understood and met.

The licence modification, Ofwat said, would encourage these behaviours and where needs are not met or in instances of poor treatment, the condition is intended to offer protections for billpayers.

The six parts of the new condition are proposed as:

• The Appointee is proactive in its communications so that its customers receive the right information at the right time, including during incidents.
• The Appointee makes it easy for its customers to contact it and provides easy to access contact information.
• The Appointee provides appropriate support for its customers when things go wrong and helps to put things right.
• The Appointee learns from its own past experiences, and shares these with relevant stakeholders.
• The Appointee also learns from relevant stakeholders’ experiences and demonstrates continual improvement to prevent foreseeable harm to its customers.
• The Appointee understands the needs of its customers and provides appropriate support, including appropriate support for customers in vulnerable circumstances, and including during and following incidents.
• As part of meeting principle above, the Appointee provides support for its customers who are struggling to pay, and for customers in debt.

The new terms would replace the existing condition G that specifies companies need to publish and make available specified information for customers. It states the need for a complaints handling procedure and to provide specified information with bills. The current condition J would be removed when the new condition is introduced with expectations for service levels for billpayers.

Customer satisfaction scores with all water companies have fallen since 2020, as measured by Ofwat using C-Mex scores. Meanwhile research by CCW showed trust has declined and complaints have risen.

A consultation on the proposed licence change runs to 23 November to modify licences for all water, water and sewerage and NAV companies in England and Wales.