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Investing in Water Services 2006-2014
CUSTOMER VIEWS ON THE INVESTMENT PRIORITIES FOR SCOTTISH WATER

Scotland's Water Services February 2005

Simon Braunholtz, Margaret Frazer and Justine Menzies
MORI Scotland

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This summary outlines the findings of research investigating customer views on the investment priorities for the Scottish water industry. This research forms a key strand in an extensive process of stakeholder and public consultation on the future of Scotland's water services, complementing two key public consultations 'Investment Priorities for Water Services 2006-2014' and 'Paying for Water Services 2006-2010'.

Main Findings

• Scottish Water customers are generally very happy with their water and wastewater services and believe these provisions represent good value for money. Nearly 9 out of 10 customers reported that they are satisfied with their water services (water and wastewater) and four in ten very satisfied. Around two thirds of customers (63%) felt the water service they received represented good value for money

• Nearly 3 out of 4 customers had not experienced any problems with their water or wastewater supply in the last year (72%). Unsurprisingly, there is a substantial correlation between people's personal experiences of water services, and perceptions for improvement. This is further reflected in the finding that, in most cases, customers felt that investment is required to maintain rather than improve these services.

• The main investment areas which customers cite as needing improvement were environmental (i.e. quality of coastal and bathing waters, as well as river waters) (58% and 53%) followed by capital maintenance (41% water and 39% wastewater) and aspects which come under the broad heading of other customer priorities, in particular, 'smells from sewage works' (39%).

• Although environmental aspects were ranked high in customers' views in terms of investment priorities, when asked which aspects would cause them concern if improvements were delayed for over 10 years, those aspects which will have more of a personal impact were selected, e.g. 'preventing homes and gardens being flooded with sewage', 'preventing bursts and leaks' as well as the capital maintenance aspects (i.e. condition of water and wastewater pipes).

• The majority of customers (54%) are willing to have an increase in their bills to fund improvements where necessary. This rises to 77% if the money is spent on the customer's top priority for improvement. However, it is important to note that the level to which customers are willing, or indeed able, to contribute vary and are influenced by issues relating to affordability.

• Only a small minority of customers supported the current position whereby Scottish Water is expected to fund extensions to the public supply to allow new housing development (4%) or currently unconnected residential properties (15%). A higher level of support was recorded for sharing the cost between the developer/householder and Scottish Water with 43% of customers supporting this position for new housing and 55% for currently unconnected properties.

Background

The overall objective of the research was to explore, understand and establish domestic customers' priorities for investment in the water industry over the next ten years. In doing so, this project also aimed to set customers' views in context by assessing current knowledge of the water industry, in general, where the responsibilities lie for its upkeep and assessing current levels of satisfaction with both water and wastewater supply service provision.

The main issues explored by the research included:

• current level of satisfaction with the service provided and the extent to which it is perceived to provide value for money;

• customers' views on the importance of maintaining current standards of service provided (e.g. drinking water quality, managing water pressure, etc.);

• customer priorities for investment to improve service standards, across environmental, drinking water quality and general service areas;

• customers' views on the trade-off between delaying the delivery of improvements or paying higher charges;

• customers' willingness to pay for different types of service improvement; and

• customers' belief of where the burden of payment should fall on investment required to allow both new developments and existing properties to connect to the public system (especially in rural areas).

The findings of this research are based upon a quantitative telephone survey of 3,000 respondents conducted between 30 July and 27 August 2004. The survey was sampled disproportionately, boosting rural areas and small remote towns while reducing the number of interviews conducted in the heavily populated urban areas. ¹ This approach provides more accurate results for rural areas. The results of the survey are representative of Scottish Water customers and whole sample estimates are reliable to +/-2% (maximum).

In order to obtain a more in-depth understanding of customer attitudes, reactions and preferences, the survey was supplemented by qualitative focus group research. A total of eight focus groups with 60 participants were conducted in both urban and rural areas in which Scottish Water had made either some, little, or no investment, and/or areas which had experienced quality issues with water or wastewater. The areas selected included Edinburgh, East Kilbride, Oban and Aberdeen.

In this study the term ' customers' covers all respondents, who were selected from sampled households on the basis that they reported that they were connected to either the mains' water supply or the wastewater network and were either solely or jointly responsible for paying the bills.

Satisfaction with Water and Wastewater Supply Services

Overall, people were very happy with the services supplied by Scottish Water. Nine in ten were satisfied with their water supply services (89%), including four in ten who were very satisfied (40%). Attitudes were similar with respect to wastewater services (87% satisfied overall, including 42% very satisfied). On the whole, those who were satisfied with one were also satisfied with the other. Around two-thirds of customers (63%) felt the water service they received represented good value for money.

People's overall attitudes to services were substantially affected by whether they had experienced problems in the past year. Therefore high levels of satisfaction may be explained by the fact that very few customers had experienced any problems in the last year. Around three-quarters of customers (72%) said that they had experienced no problems with water supply or wastewater services in the past year. The problems that were most commonly experienced were water supply interruptions (6%), blocked drains or sewers (6%) or water taste and odour (5%).

1 Based on SE Urban/Rural Classification 2003-2004.

Q: Do you feel Scottish Water needs to spend customers' money on keeping service standards at their current level, or on making improvements?

Levels of satisfaction with Scottish Water as a service provider are comparable with levels of satisfaction with other utility providers, and higher that those for local authorities. Nine in ten are satisfied with gas, electricity and water and wastewater service provision. In the case of the latter, around half (47%) were very satisfied, and 43% were fairly satisfied.

Satisfaction with Service

Q: Are you satisfied or dissatisfied with the service you get from...?

Investment Priorities

Customers were asked a series of questions designed to secure views on the capital investment priorities for the water industry. Throughout the research respondents were asked not only to consider whether investment was required to maintain service stands but whether it was required to improve on those standards too. Thirteen different aspects of water and wastewater services classified under the following four headings were highlighted for discussion.

Maintaining Service Standards (Capital Maintenance)

When asked what their views were of the current state of the water and wastewater infrastructure in Scotland, most people thought that there was a need for investment in the infrastructure. Around two in five (41%) thought it was 'in poor condition in some parts needing significant investment', while around one in six (18%) thought it needed ' major investment'. Around one in four (27%) felt that the infrastructure was generally 'in good condition only requiring minor investment'.

Overall, there were no clear views as to whether the condition of water pipes, treatment works and reservoirs (41% make improvements versus 39% maintain current standards) and the condition of wastewater pipes and treatment works (39% make improvements versus 42% maintain current standards) require improvement or not. Customers who felt improvement was needed were more likely to say they needed 'some' rather than 'a great deal' of improvement (51% versus 44% - condition of wastewater pipes and wastewater treatment works; 55% versus 39% - condition of water pipes, water treatment works and reservoirs).

Overall three in five (64%) householders believe that services preventing bursts and leaks need to be maintained at their current level rather than improved (32%). Of those who consider that improvements are necessary, views are mixed as to whether this should be 'some' or 'a great deal' (51% versus 46%).

Overall, fewer than one in ten (8%) customers believe that the reliability of water supply requires improvement. This increased to one in seven (14%) of those who had experienced a problem with water/wastewater supply. Those who believed improvements to the current service were required were more inclined to think that 'some' rather than ' a great deal' of improvement was necessary (66% versus 31%).

Over 80% in each case stated that they would be concerned if improvements were delayed for over ten years.

Investing in the Environment

Over half mentioned either the quality of coastal and bathing waters (58%) or the quality of river waters (53%) as needing improvement. A significant number of these people said that these required 'a great deal' of improvement (57% and 51% respectively), while around seven in ten felt that these elements under review are worth spending more money on.

Of those identifying the quality of coastal and bathing water as an area requiring improvement, the majority felt that it required 'a great deal' rather than 'some' improvement (57% versus 41%).

The overwhelming majority of those that believed the quality of coastal and bathing waters required improvement would be concerned if the improvements were delayed for up to 10 years (83%), and around two thirds (68%) said this was an area where they were willing to pay more for.

Drinking Water Quality and Water Resources

The majority of the public viewed drinking water quality and water resources as aspects that Scottish Water should maintain at their current level rather than improving them, reflecting the fact that few had experienced problems in this area.

Customers are generally satisfied with water quality with one in three considering that the appearance, taste and smell need improvement. Although two in three (66%) customers think that the latter is worth paying more for, less (42%) are inclined to view the appearance of water in the same light.

Although twice as many customers felt that work on the appearance of tap water should be kept at the current level (66%) rather than improved (33%), views are very different among those who were dissatisfied with water services overall (54% of whom said that there should be improvements).

The taste and smell of tap water was an aspect that the majority, i.e. seven in ten, believed should be maintained at its current level. Those who believed improvements to the current service were required were more inclined to think that 'some' improvement rather than 'a great deal' of improvement was required (69% versus 30%).

Relatively few felt that the quality of tap water needed to be improved (24%) and most (74%) thought that it should be maintained at its current level. Furthermore, of those who believed that improvements to the current level of service were required in this respect, most felt that only 'some' rather than 'a great deal' of improvement was required (71% versus 28%).

Seventy-seven per cent, 74% and 68% of those customers suggesting improvements were necessary to the quality, taste and smell and appearance of tap water respectively reported that they would be concerned if improvements were delayed for over ten years.

Other Priorities for the Customer

Of all the ' priorities for customers' under review, the pressure of tap water was least likely to be selected for improvement, just over one in seven (15%) believed that current standards should be improved, while over four in five (85%) believed that standards should be maintained at their current level. Of those that believed that improvements were needed, two in five (41%) thought that a great deal of improvement was required.

Two in five (39%) thought that smells from sewage works need to be improved. Over half (56%) felt that 'a great deal' of improvement was needed, with the majority (83%) maintaining that they would be concerned if improvements were delayed for over ten years.

Almost three in five (56%) householders thought that current standards should be maintained when preventing homes and gardens from being flooded with sewage. Of those who believed improvements should be made (34% of customers), opinion was split as to whether ' a great deal' (50%) or 'some' (46%) improvement was required. Although just one in five (19%) said that this was their top priority, the overwhelming majority of customers who believed improvements should be made would be concerned if improvements to the current service were delayed for more than 10 years (90%).

Half the respondents (50%) believed that communications with householders should be kept at the current level, while over a third (35%) thought improvements should be made. Mixed opinions were also evident when assessing whether a great deal or some improvement was required. While half (50%) deemed that 'a great deal' of improvement was required, similar proportions (47%) thought only 'some' improvement was required.

Willingness to Pay for Improvements

Customers who had previously highlighted items that were in need of improvement were asked whether they thought these were worth spending money on. It was the capital maintenance aspects (i.e. wastewater and water pipes) that were most commonly selected by their proponents as being worth paying more for by three in four respondents, while seven in ten considered environmental aspects as worth paying more for.

When customers were asked how much, if anything, they would be willing to pay each year to increase spending on maintenance and improvement in water services, over half (54%) maintained they would be willing to pay something. One in three (32%) said they would not be willing, or indeed, able to pay anything.

Three-quarters of customers (77%) agreed that they would be willing to pay more if the money was spent on their top priority for improvement. Of those who would be willing to pay the condition was that there was tangible evidence and guarantee of improvement.

Q: How much do you agree with the following statement?'I would be willing to pay more in my water bill as long as the money is spent on my top priority for improvement.'

Base: All respondents (3,000) Source: MORI

Two-thirds said they would be concerned if parts of Scottish Water's improvement programme was delayed for more than 10 years (65%), even if it meant stable prices, while almost one in three (29%) indicated that they would not be concerned about a delay in these circumstances.

Extending Public Water and Sewerage Networks

Views are fairly split between those who felt the developer should be responsible for connecting new houses to the public network, passing on the cost through higher costs to the house buyers (46%) and those who felt it was a joint responsibility between the developer and Scottish Water, passing on the cost to customers across Scotland (43%). Very few (4%) felt that the full cost should be passed on to customers as a whole.

Particularly in rural areas, the condition and extent of the public network does not allow existing properties to connect, and these are serviced by private water supplies or septic tanks. When asked who should be responsible for paying for this, most customers felt that the cost should be shared between individual householders benefiting from the connection, with an element of the cost passed on by Scottish Water through charges to customers across Scotland (55%). Only one in five (21%) thought that individual householders who benefit from the connection should pay the full cost of the work. On the other hand, one in six (15%) felt that the full cost should be shared by all customers through Scottish Water charges.

Conclusions

This research indicates that Scottish Water customers are happy with their water and wastewater services. They believe that, in most cases, investment in a wide range of services is necessary to maintain rather than improve these services. Where improvements are felt necessary, customers say they are willing to pay more in their bills to fund these.

For most customers, the environment is an area where they think improvement is necessary. They are more likely to highlight this, rather than any other area where improvement in service standards are needed, and more likely to say that a great deal of improvement in needed. Many customers also, however, believe that preventing further deterioration in the condition of Scottish Water's assets is an important priority. They also see additional action to deal with odour nuisance and flooding of properties with sewage as priorities as necessary.

If you would like further copies of this summary please contact:

Scottish Executive Water Services Division
Area 1-H (north)
Victoria Quay
Edinburgh
EH6 6QQ
Email: waterservices@scotland.gsi.gov.uk
Telephone: 0131 244 5099

Further information is also available on the Scottish Executive website at: www.scotland.gov.uk/Topics/Environment/Water

The views expressed in this summary are those of the researchers and do not necessarily represent those of the Department or Scottish Ministers

©Crown copyright 2005
Limited extracts from the text may be produced provided the source is acknowledged.