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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

  • UNISON is Scotland's largest trade union and the union that represents customer service staff in the energy industry.

  • UNISON Scotland supports the broad thrust of the work programme although we would wish to see greater focus on the underlying causes of consumer concerns rather than simply addressing the symptoms.

  • 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complaints there needs to be greater emphasis on adequate staffing levels, systems, training and the abandonment of outdated call centre management approaches.

  • 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.

  • UNISON Scotland shares Energywatch's concerns over the introduction of BETTA. We also believe that the work programme should include an active involvement in the Energy White Paper debate.


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.


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)
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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