APPENDIX 2
Letter to the Chairman of the Committee from Mr Nick Coates, together with correspondence between Mr Coates and the Director General of OfWat (PAC 00-01/116)
I understand the Public Accounts Committee is considering this subject next week and that this has been prompted by NAO's report on the subject which, in turn, was carried out as a result of OfWat's own annual report on the matter.
I hope, therefore, that you will forgive my boldness in writing to you and your fellow members on this subject.
My concern comes from my personal experience in dealing with Thames Water over a matter of leakage both in public road and on private (Council and Housing Association) land which has caused our garden to be under water for most of the last four years. I enclose a copy of a letter sent to the Director General of OfWat today which is self-explanatory, although I have not included all the correspondence.
I draw your attention to Thames Water because the company was highlighted as not following best practice in monitoring leakage and OfWat had concerns about the accuracy of its reporting leakage.
I would go further than that. It is my view that the management culture of Thames Water has the following traits:
— they are in denial about the scale of leakage and are not prepared to designate a senior champion to investigate this;
— they massage their leakage figures so that the figures show a year on year improvement; and
— they are unresponsive internally and externally to attempts to diagnose and resolve the problems.
I suspect this might be attributable to some or all of the following:
— when they launched Thames Water promised, in their prospectus, to minimise leakage—other companies recognised the scale of the problem and asked for funds, via higher prices, to tackle it;
— the pipes in London are very old—over 100 years old in most places—but the clay hides or absorbs some of the leakage causing less (environmental) concerns;
— other water companies have not replaced a significant chunk of their old cast-iron mains. Thames Water has replaced none;
— Thames Water has the smallest bills but the largest leakage; and
— the take over/merger with RWE of Germany will have added pressure to cut costs and reduce any investment.
I hope this helps you as you consider this important subject.
Nick Coates
Letter from Nick and Karen Coates to the Director General, Office of Water Services
I note that you are a witness next week when the Public Accounts Committee consider "Leakage and water efficiency". I assume this must relate to your report last year on this subject and the NAO's subsequent examination of the issue.
I do not know whether it is of direct relevance to the enquiry but would like to draw your attention to our experience of Thames Water's approach and handling over the last four years of serious local leakage in our area.
For almost all of the past four years we (a private home-owner) have had between one third and two thirds of our rear garden (which is about 100 ft long) under water for most of the year bar the end of long hot spells in the summer (excluding 2000 when it was never dry). We have spent an inordinate amount of time writing and on the phone to Thames Water. Not only have they not responded promptly, but also have been most ineffective when they have done something, mostly ignoring our local knowledge and observations. To illustrate the extent of the problem there is currently over one foot of water in about one third of our rear garden where there was no problem four years ago.
Some responsibility for the leaks lies with neighbouring social housing landlords. However, our experience is that there is no impetus within Thames Water to solve problems or enforce repairs on such landlords, despite their powers and, I believe, their obligation to do so. We have had to do the chasing. We have had to link different bits of Thames Water together. Despite this we have had not the remotest indication that they are sympathetic to our situation or are willing to partially accept blame for the delays. They have refused to countenance any compensation apart from about £20 for some of the missed appointments (if an appointment is not on their computer system they do not acknowledge it as being missed).
I have enclosed some correspondence which I hope you might have time to skim through. They illustrate the following defects we have observed and pointed out to them:
— Thames Water are unresponsive—regarding the latest incident: we reported to Thames a new leak in February 2000 and said where we thought it was coming from (we could guess because it followed a pattern of another similar leak about 18 months earlier). We persisted but they refused to investigate it until they had eliminated another possibility. They acknowledged its existence, said they could not locate it (despite, they claim, sending in the night team) and claimed to have served a notice on the Council (the landlord). We chased Thames Water over the progress with the Council. The replies varied—yes, we've done it; we're waiting a bit longer, nothing on the system; not our responsibility and so on—from the same company, same phone number. This week my wife managed to find the right person in the Council to speak to—they had done the work and told Thames Water. When we told Thames Water, they arranged a meeting with the Council, the local engineer, a person from their leakage division (who did not turn up) and my wife. The Brent Council surveyor located the source of the leak within half an hour. As a result, it will be sorted within another 24 hours. No-one in Thames Water knew the whole story, no-one had told any other person outside their team what they had done or had happened. And they did not pursue it. If it had not been for my wife we and our neighbours would still have been under water for months to come;
— unresponsiveness—on one occasion my wife needed to ring the Chief Executive's office to get some action;
— poor customer service—phone calls and promises of action are not followed through most of the time. In one instance recently my wife was treated very poorly by a customer service operative who thought she must be Council tenant; when she found out my wife was a home-owner, the operative's tone changed completely;
— poor information recording—not all reports of leakage (or seapage) are recorded on the computer system;
— poor information—staff have not even been able to trace the estate/street or property address to which our long running leakage saga has been attached;
— poor internal communication—different parts of Thames Water do not communicate, do not share information, do not even appear to have access to common data—in one recent situation one key person admitted he did not know who was the right person to ask for information or action;
— poor co-ordination of action—there is no person linking together all the different teams within a locality;
— failure to take the blame—indeed different parts of Thames Water will try and pass on responsibility to another part, normally because of budgetary restrictions—the consequence of this is, of course, a failure of the whole organisation to ever take the blame for anything;
— artificial financial constraints—the local engineer (who, I am sure, would rather not be traced) said to my wife—they (Thames Water management) say there is no money for leakage repairs and cut our people and repairs budgets year on year. When the recent heavy rainfall came, which apparently has caused a large increase in pipe bursts, then "money suddenly appeared as if from nowhere"; and
— Secrecy—Thames Water will often cite confidentiality as the reason for not telling us anything, both in writing and over the phone. I thought the Freedom of Information Act was supposed to deal with this.
Your report alluded to some concerns about leakage reporting/monitoring and investing in repairs. I believe you were right to be concerned. We have got to know quite well some of the Thames Water staff over the years and I also now people further up the chain. So, I know a lot more than what I am writing out of personal experience. Those people would be too frightened to come out into the open.
But the pressure to cover up what is going on and the lack of strategic decision making within Thames Water will eventually cause a more serious problem. Although I do not think there is a direct parallel the case study of the Railtrack cultural attitude and behaviour in the face of managing certain targets and balancing that within safety and investment bears some comparison. In water's case the parallels are with the environment and investment in replacing all those 100 year old pipes.
You may be interested to know that your own CSC (Thames) have not exactly been the proactive or supportive people on earth when we wrote about a year ago on this matter.
Nevertheless, I hope this is useful.
Nick Coates
1 February 2001
