One size fits all, or postcode lottery?

To maintain a fine record of improving service for customers and society, the water industry believes it must move on from one-size-fits-all regulation. Is this a realistic prospect given national expectations and a strong centralised system? Barrie Clarke investigates

If you use the key public services in Britain today, you are constantly reminded that a fearsome monster could blight your life. The Postcode Lottery – native to these shores and widely dispersed – can strike at any time.

Earn your crust providing or regulating said services and you’re in double trouble. Between national expectations and local delivery lies one dangerous terrain. In every bombed-out hovel, behind every blasted tree, the PL Monster lurks. You can run but you can’t hide. Slavering NGOs, ghastly pundits and terrifying media Munches compete for sightings. Here is a recent selection.

“The British Heart Foundation has condemned the NHS ‘postcode lottery’ for failing to care for people suffering from cardiac problems.” (1)

“Parents of children with special needs face a postcode lottery in their search for good nurseries and childminders, Ofsted warned today.” (2)

“The number of rapes reported to police that end in a conviction depends on a ‘postcode lottery’, which sees convictions fluctuating between 1% and 14% depending on where you live.” (3)

Value for money

The Audit Commission is no stranger to the threat. It covers local government, health, housing, safety, fire and rescue. Its role – similar in some ways Ofwat – is to provide information on quality, make recommendations, spread good practice and ensure value for money.

In February, the commission published its Comprehensive Performance Assessment (CPA) of local councils. The objectives are interesting. The CPA provides “a clear public rating on a local body’s performance” and “the basis for a proportionate and risk-based approach to regulation”. It “has evolved over time” and “the current framework aims to reduce the overall regulatory burden on councils. It brings together information from other inspectorates and auditors to form an overall view of the performance of councils.”

In the CPA, the Audit Commission has devised a dual system to achieve its aims (and take on the PL Monster). To feed the voracious national appetite it uses Performance Indicators. These are directly comparable and very specific; for example, the number of bins missed by waste collection. In reporting services more susceptible to local conditions it has Key Lines of Enquiry, which it says are “more fluid”. They are used for example in assessment of housing accommodation against the Decent Homes Standard.

Local preferences

In the water industry, there’s quite a debate about how the system could take more account of local differences. You may hear it called “meeting expressed needs and preferences” or “getting people more involved” or even “putting the consumer at the heart of water regulation”. There are different views, of course, but a lot of people think there would be benefits if companies had more flexibility to match investment to local interests in defined areas of service. Satisfaction ought to grow for one thing – and the effectiveness of water efficiency campaigns.

Could it happen?

For many years the unavoidable priority had to be fixing things that affect everyone – tap water quality, river pollution – rather than meeting the needs of particular groups. Big common problems were met by massive capital projects. One-size-fits-all was the natural way. If we are really moving to a new phase, companies will need a new relationship with customers in which they can respond visibly to expressed wishes.

Ofwat recognises the change taking place, and is asking companies to own their business plans at next price review; to be less dependent on ministerial guidance; to find out what particular customers want; and to define the best environmental outcomes.

This is encouraging. But it will take a serious effort by everyone involved to make a successful price regulation structure more responsive without offering red meat to the ravenous PL Monster.

The scope for targeting services in water may be less than in health but it is still necessary and still worthwhile. Consider for instance the lifestyles and needs of older people in suburban Exeter and those of students in downtown Leeds.


1, August 2006

2 The Guardian, September 2005

3 The Guardian, March 2006

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