CCW response to Scoping the Water Efficiency Fund: Second Ofwat Consultation

Partially Support.

We agree that there is an urgent need to campaign to raise awareness and encourage behaviour change. So we support the proposed division of the WEF. However, the repeated references to a large scale campaign in the consultation document suggests that there is already some understanding of what this umbrella campaign might look like. There are several organisations that have engaged in this area, not least the water companies, with only limited evidenced effect on reducing demand levels to date. There will need to be early

experimentation, using different approaches, supported by the use of behavioural science and customer segmentation to target specific messages, possibly using a number of agencies, to really test what is likely to deliver the behaviour change being sought. The consultation mentions phasing, and this must be used to test and pilot a variety of approaches to see what resonates with the public and is likely to result in action and actual, sustained reductions in water use.

Any campaign that is taken forward in this area will need to be multi-faceted and appropriately phased. We also consider that this might be better undertaken as a series of campaigns that target different behaviours and which focus on different customer types, rather than one umbrella campaign.

We also support the proposal to include a competitive process for funding other types of water efficiency projects, although we would like to see lessons learnt from the Innovation Fund put into practice – particularly around scalability and practical application.

Opportunities for both the WEC and the WEL must be available to both household and non-household related demand management initiatives.

Support in light of the flexibility proposed to be built into the Fund between both the WEC and the WEL. Our support is also on the basis that there should still be potential to apply to the Innovation Fund for projects that might innovate in terms of water efficiency.  

Ofwat needs to factor in more time for exploring what the campaign should set out to achieve; and how this will be evaluated and what success looks like.

The upfront work on insights will be an important stage in the campaign’s development which will allow proposals to be tested with consumers and will be key to its success.

The Advisory Panel will have an important role to play in holding the central delivery body to account. The Panel’s Terms of Reference should require them to call out any underperformance or delivery so customers’ money is being spent wisely on the activities that are able to demonstrate the best possible demand reduction results.  The process for this should be open and transparent.

Before the WEC begins, the assessment and evaluation criteria should be agreed so that the expectations surrounding delivery and evaluation of the project(s) are well defined. Waterwise and the Environment Agency have developed an evaluation toolkit which would be a good starting point.  We are already trialling this with the industry through our Leading the Way pilots programme.

The proposed three streams: large scale solutions; local approaches; and, early stage projects are a good way of differentiating applications to the WEL. Building on the experience from the Innovation Fund and established arrangements makes sense. We would like to see further clarification over the operation of the two Funds so as to ensure the scope of each is clear to potential applicants and there is no duplication between the two streams of work.

The consultation document highlights examples of the themes that WEL could consider. We are pleased to see that they range from the very practical (fixing leaky loos) to those exploring the best means of sharing smart meter data. As the WEF is being funded by customers, there should be clear customer benefits from any funded projects for either household or business customers. There is also an important opportunity to build and share a more comprehensive evidence base, of what works and doesn’t. We would also like to see more information about how this will be assessed and/or evaluated. This learning needs to be captured and made widely and freely available and easy to access.

We have no reason to question the results of the cost benefit analysis. Evaluation of the WEC and WEL projects will be important to the success of the WEF. Being able to stop projects that are not delivering against their objectives and potentially shifting funding to those that are, will help ensure lessons are learned and future planning assumptions are based on sound evidence.

Partially support.

We agree there is a clear need for the WEC to be run by an autonomous central delivery body, taking advice from the independent Advisory Panel, however, do not believe that water companies are necessarily the best placed to set this up. Consequently, the WEC may be more effective with a third party running the central delivery body.

The consultation rightly raises a couple of challenges with placing responsibility for setting up the central delivery body with the water companies, primarily related to co-ordination and independence. While the water companies do have regulatory incentives to drive down demand and communicate effectively with their customers, the industry’s reputation is currently at an all time low. There is a clear and present danger therefore, that the WEC could fail to resonate with the public or have the desired outcome.

Without sufficient autonomy a delivery body set up by the water companies may find itself needing to navigate the challenges of aligning local company branding, messages, terminology and language with the umbrella campaign which from past experience have tended to lead to compromises as each company prefers their own approach. The consultation references the need to make sure the campaign does not duplicate work already planned by water companies, which we agree with, but what is ideally needed is something that is going to grab attention and make the public take notice and take action more so than individual companies have been able to achieve on their own. This campaign needs to be something that environmental campaigners and other messengers and influencers will feel comfortable getting behind. Having a wide variety of trusted voices, is likely to achieve greater reach and public buy-in.

There might also be a risk that the establishment of the central delivery body creates, or duplicates resources already available through Water UK, Waterwise, or others. Waterwise, particularly, having been set up with the specific remit of promoting water efficiency. While we recognise that the WEC would be of a scale not previously managed by these organisations, the recruitment of an independent team, with a CEO and Board could result in a costly overhead for the WEF.

Support.

Given the similarities in approach it would seem appropriate. Many of the functional activities will be the same.

Ofwat  

Ofwat need to set the purpose and objectives of the operation of the WEF. After that point it should step back. If there is a central delivery body and Advisory Panel, there isn’t the need for Ofwat to also assess the proposals. That is duplication.  We do support funds being distributed as part of a light touch gated process. That process would allow for challenge of the programme and the progress and efficiency of activities to make sure it provides value for customers.   

Advisory Panel  

We agree that the Advisory Panel should involve independent experts from within and outside of the water industry and from a range of specialisms, not least campaigning/marketing, consumer representatives (CCW), water efficiency and behaviour change science. This Advisory role will be key to the success of WEF. It therefore needs sufficient standing to be able to challenge the central delivery body and to advise Ofwat when projects need to be stopped.  

Delivery Partner  

As there is a proposal to establish the central delivery body it’s not entirely clear how the division of roles would play out.  It would be good to see a more detailed break-down of roles and responsibilities.  

Evaluation Partner  

Robust and consistent evaluation of projects supported by the WEL, as well as undertaken through the WEC will ensure the evidence collected about what works (or doesn’t) can be used to direct future projects. Bringing in appropriate expertise in this area is therefore essential. 

We broadly agree with the representation outlined in 5.4.2.

It will be important that representation explicitly covers both England and Wales and links to relevant areas of government, including departments and regulators in both countries as water is a devolved matter.

CCW should be involved at this level, as should Waterwise. CCW, as the Statutory Consumer Body will provide the insight drawn from our extensive consumer research and engagement, and our “Leading the Way” behaviour change pilot programme. Waterwise brings a wealth of practical and theoretical experience in water efficiency and is active in both countries.

Do not support.   

If the ambition is for people to come forward with fresh ideas and to maybe try more uncertain approaches and projects, this approach could preclude them simply because of their initial lack of funds and ability to contribute. Although this is being billed as a competition we need this to encourage a sense of “common cause” and encourage submissions from new start-ups or individuals with fresh ideas.  

We agree with the financing proposal to follow a similar approach to the Innovation Fund which means water company contributions will be set according to the size of their customer base. We will await the precise approach to this and the company specific bill impact which will be set out in the Final Determinations. Ideally we would have wished to see this included in the Draft Determinations.  

We also agree with the proposals on Intellectual Property rights and for protecting funds.  

Finally, as stated above, we completely agree with the importance of evaluating the success of the WEF projects since existing evidence on what works in terms of reducing water use is relatively weak.   

No.

As mentioned earlier, we would caution against rushing to launch a large scale campaign proposal without the initial piloting and testing required to see what actually resonates with the public.

Yes.   

This will allow evaluation to check milestones are achieved and outcomes delivered. It will also allow the Advisory Panel an opportunity to seek course correction if the approach is not delivering.  

If possible, do not over emphasise the competitive element of WEL. The WEF is a marvellous opportunity to bring out new ideas and ways of working. Collaboration, innovation and creativity are what we are ideally looking for.