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Energywatch Work Programme 2003-4
UNISON Scotland Response to the Energywatch Year
3 Forward Work Programme Consultation: 2003-2004
March 2003
Executive Summary
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If companies are to effectively deal with
customer complaints there needs to be greater emphasis on
adequate staffing levels, systems, training and the abandonment
of outdated call centre management approaches.
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The underlying problems facing consumers are
to do with the way the competitive market is administered.
This is most apparent with the switching system although it
also impacts on customer service, billing marketing and credit
management. UNISON Scotland believes there should be a comprehensive
review of the system, with the active involvement of frontline
staff.
Introduction
This paper sets out UNISON Scotland's comments on
the Energywatch Forward Work Programme for 2003-2004. UNISON is
Scotland's largest trade union representing 150,000 staff. We
are also the largest union representing customer service staff
in the energy industry.
UNISON Scotland is supportive of a strong consumer
voice for energy users and believes that Energywatch makes a positive
contribution in providing a distinct voice for consumers. In our
response to the first and second work programme we were concerned
that a Scottish office should be more than a cosmetic recognition
of the distinct issues facing consumers in Scotland. We are particularly
pleased that Energywatch Scotland has been able to provide such
a voice and it is important that it is properly resourced to perform
this function.
Consultation Questions
Q1/2 - Supplier responsiveness and standards
of service
UNISON Scotland supports the drive to improve customer
service in energy companies. It should be recognised that customer
service is often the poor relation within energy companies as
competition and cost cutting puts increasing pressure on services
which are perceived not to contribute directly to company profits.
Many customer service staff are overworked and overstressed, working
with inadequate staffing levels and systems. In the past year
most Scottish energy companies have substantially cut staffing
levels in their customer service departments.
Some companies are beginning to recognise that the
extensive use of temporary and agency staff does not assist in
developing the essential knowledge and skills that are required
to assist consumers. Staff training and development is important
to consumer service and the staff concerned are also entitled
to dignity and respect at work. The perceived customer failures
of energy companies are often visited on front line staff who
have to bear the brunt of customer complaints.
Whilst companies are putting greater effort into
resolving complaints on a ‘right first time' approach this does
not always match with the systems they adopt to manage call centres.
Many energy companies still use outdated call centre management
approaches that focus on the time spent per call rather than resolving
customer problems. This places a perverse incentive on call centre
staff to get the customer off line. The introduction of ever more
invasive call monitoring software means that this problem is likely
to increase.
Customer service staff are increasingly being seen
as part of the sales staff and in a competitive market this aspect
of their job is inevitably given priority. There are many incentives
available to staff who ‘hot key' customers to specialist sales
teams, but very few for those who resolve customer problems.
It is of only limited value if Energywatch focus
on the role of suppliers without recognising that the underlying
problem is the system that customer service staff have to administer.
UNISON members deal with thousands of calls every day from confused
customers. These customers are bombarded with a bewildering array
of marketing ploys and often end up unsure who is providing their
energy and without a bill for months. Others are the victim of
high pressure sales tactics and blatant mis-selling. All of these
systems and the regulatory empire developed by Ofgem is very expensive.
Money that would be better spent on Scotland's crumbling utility
infrastructure.
Q3/5 Cost of inaccurate bills
UNISON Scotland strongly supports an increase in
the number of meter readings. Estimated bills are the primary
cause of inaccurate billing and vulnerable customers are often
most at risk. It is of course expensive to read meters and therefore
an obvious target for cost reductions.
As with customer service, staffing levels in the
billing departments of Scottish energy companies have been reduced.
In addition to achieve these cuts many experienced staff have
left the industry.
On a positive note considerable effort has been
put into improving the process and systems which result in a bill
and this effort should result in qualitative improvements to this
service.
Q6/8 Smarter switching
UNISON believes that the whole system of switching
needs a comprehensive review. Ofgem in particular frequently launch
campaigns encouraging switching as part of their competition philosophy.
In response the company sales teams launch new campaigns and strengthen
their churn teams to recapture the switching customers.
As a consequence customers are bombarded on all
sides and try to follow a system that few understand. In a recent
discussion a UNISON steward highlighted the case of an elderly
customer who had five different suppliers in as many months! It
took him the best part of day to unravel the customers position
only to have another sales agent claim the customer had switched
again the following day.
Whilst UNISON believes that the whole competitive
system is at fault a review would facilitate a look at ideas such
as minimum switching periods. The important point is that any
review should involve frontline staff who actually deal with customers
and understand their problems.
Q9/11 Marketing abuses
UNISON Scotland has frequently highlighted the importance
of mis-selling in the industry. UNISON members have to deal with
the consequences of mis-selling to often confused and vulnerable
customers. We therefore welcomed the public campaign launched
by Energywatch on this issue.
Whilst we recognise that some progress has been
made we would urge Energywatch to continue with this campaign
but also to recognise some of the underlying causes of mis-selling.
A liberalised energy market has not been a panacea for the consumer.
Marketing has often triumphed over clarity in pricing structures
and the consumer has been left confused and vulnerable to pressure
sales tactics.
There is an understandable view in energy companies
that successful sales campaigns will result more complaints, but
that this is a price worth paying. An increase in the level and
frequency of fines is therefore an important disincentive to this
view.
Most complaints also come from outsourced sales
agents who operate on a commission basis. There would be far fewer
complaints if the sales force was directly employed with only
limited sales related bonus pay systems.
Q12/13 Lifting the burden of debt
UNISON welcomes the recognition of the problem of
debt facing many customers. Again credit management departments
and related customer relations staff have been the target for
staffing reductions. Staff training is important in improving
advice to customers. This training should be made available to
a wider range of customer service staff than at present. There
is a tendency to concentrate training on a few specialist staff,
which means that the customers who really need support do not
always receive it.
Debt is not the only reason for disconnection. Customers
with pre-payment arrangements are often forced to self disconnect.
UNISON is supporting greater awareness of debt and
the contribution energy efficiency can make to reducing debt with
our own guide, which will be published next month.
The consequences of debt would be lessened if the
objective of the government at Scottish and UK level to eradicate
fuel poverty was achieved. Whilst we welcome the publication of
the government's fuel poverty strategy we believe much more can
be done to eradicate fuel poverty. UNISON's support for the Keeping
Scotland Warm campaign will continue until this objective
is achieved.
Achieving Change
As we indicated in the introduction we believe that
Energywatch Scotland has made a positive impact in its early years.
Its newsletters and political work have managed to raise the profile
of consumer issues in the industry. Whilst UNISON has not always
agreed with the views of Energywatch there has been much common
ground and we have been happy to work in partnership on issues
of common interest.
UNISON Scotland shares Energywatch's reservations
over the introduction of BETTA. UNISON Scotland has produced a
new briefing on the draft bill (see website). In that briefing
we express considerable scepticism over the claims made for BETTA.
We already have a competitive market in Scotland linked to NETA
that means wholesale prices are essentially the same both sides
of the border. The only attraction of BETTA is the prospect of
encouraging renewable generation in Scotland by sharing the transmission
costs across the UK. However, Ofgem following their competition
objectives are already proposing location pricing that will undermine
this potential advantage.
Energywatch will also need to participate in the
Energy White Paper debate to ensure the consumer voice is heard.
The Energy Policy Review is particularly important to Scotland
with its unique integrated electricity industry. UNISON Scotland
believes it is important that a distinct Scottish energy strategy
is developed to recognise these circumstances and the split in
powers between the UK and Scottish parliaments. This needs to
be recognised in the work programme.
Conclusion
In summary UNISON Scotland broadly welcomes the
proposed work programme. However, we would urge Energywatch to
place greater emphasis on the underlying causes of the problems
raised by consumers rather than the symptoms.
For Further Information Please Contact:
Dave Watson
Scottish Organiser (Utilities)
UNISONScotland
UNISON House
14, West Campbell Street,
Glasgow G2 6RX
Tel 0845 355 0845 Fax 0141 342 2835
e-mail d.watson@unison.co.uk
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