Targeting efficiency

Everyone agrees that both the environment and water customers would benefit from greater water efficiency. But views differ on setting policy targets to achieve this. Barrie Clarke reports

Targets mean different things to different people. For some it is points for survival in the Premier League or pounds lost in time for a beach holiday. For others, business targets are either in sight or sliding into the distance. In these cases, the target-setters are usually putting themselves on the line, and good luck to them: the outcome is in their own hands (or at their feet).

Many policy-makers and campaigners on the other hand tend to believe that setting targets for others is the best or only way to achieve their aims. The evidence is mixed to say the least. This article looks at policy targets in the context of the debate about water resources and a new report from the Institute of Public Policy Research (IPPR)*. Both are concerned with the water we waste. Most people agree that customers and the environment would win if we were more water efficient, but views differ on how to achieve this and who should be responsible.

The IPPR makes several proposals. It argues for an increase in compulsory metering (with safeguards for poorer families). It says that the government, public bodies and water companies should all do more to promote water efficiency. Water UK supports these proposals, but doubts the practicality of another IPPR plan, that government establish a benchmark for individual (per capita) consumption (pcc) and make water companies responsible for achieving it through a Water Efficiency Commitment. There would be "national minimum water-efficiency targets" and company targets according to the local need. Compliance would be monitored by Ofwat as part of industry regulation.

It should be said immediately that the industry is not opposed to further regulation on principle or targets as such. Regulation is natural when private companies provide public services; targets are integral to every regulated sector. Nor does it reject the idea of putting more emphasis on demand management where it is likely to be effective and economic.

Indeed, Water UK has recognised the potential of some form of commitment to help cut waste. What it does not see is the sense in making one stakeholder among many accountable for individual behaviour in something like water use - or how targets could possibly help in so complex a matter.

What can we learn from other sectors?
A planner friend tells me that incentives based on national targets for time taken to process development applications have helped streamline a previously chaotic process - but only when the local team began offering pre-application advice. To begin with, the number of refusals leapt, because as the clock ticked there was little time for negotiation. Providers of specialist adult literacy courses are judged partly on targets for qualifications gained by learners. Seems sensible? Well, yes, until it was noticed that those in greatest need were missing out because the targets put the focus on those "with the shortest learning journeys". The demand that GPs provide first appointments within 48 hours is justly famous - for making it much harder to get time-sensitive second appointments. We hardly need mention the effect on congestion when traffic wardens were incentivised by targets based on the numbers of penalties issued.

No two cases are the same, but we can conclude that "handle with care" is wise advice for targeteers with new behaviours in mind. In response to the call to give companies targets for changing their customers' behaviour, Water UK points to three reasons for caution. Other stakeholders whose contribution is essential are likely to see themselves as off the hook. Perverse outcomes aren't just likely but probable, when too much effort is placed on a single variable (see above). And while companies obviously have a key part to play, they are not necessarily the best source of information about reducing use of water. New research by the Consumer Council for Water confirms this familiar view.

* Every drop counts - achieving greater water efficiency in households, IPPR, September 2006

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