Examination of Witnesses (Question Numbers
55-59)
MS HAYLEY
PETERS AND
MR ROSS
ARMSTRONG
3 MARCH 2010
Q55 Paddy Tipping: Welcome to Hayley
Peters and Ross Armstrong from eaga. You have heard us talk a
lot about Warm Front this morning. The NAO report says that 86
per cent of your customers are satisfied, and you have dealt with
two million households. It is a really successful scheme, but
over a period of time you have had a lot of criticism. Just explain
to me why you think that is.
Ms Peters: Interestingly, the
NAO report when it was released last year stated customer satisfaction
was at a level of 86 per cent. Latest statistics show that, actually,
customer satisfaction with Warm Front is 92 per cent, so quite
a significant increase. One of the things I wanted to put into
context, actually, is that of the latest audits 93 per cent of
our customers actually would refer Warm Front to friends and family.
I am going to set a bit of scene here because what I want you
to understand is that against the UK customer service index figures
which were released for January 2010, the public sector, in terms
of customer satisfaction with local authority initiatives and
other local level initiatives, was 72 per cent, public sector
at the national level was 69 per cent, and utility customer satisfaction
was 68 per cent. So in terms of the context of Warm Front and
where it is and where it is perceived, I am very much here to
champion the cause and say: "Well, actually, I think it is
an absolutely cracking scheme", and I probably would say
that, given that I have responsibility for it but I am very passionate
about it. I think when we talk about the fact that 92 per cent
of customers are happy, and we serve, on average, 200,000 customers
a year (over 2.1 million customers since the scheme started) is
absolutely phenomenal. What I would say, though, is that we have
a responsibility to make sure that we deliver the best service
to the customers, and that is our remit, but at the end of the
day where we do have cases, and we have five in about one thousand
customers at the moment who, possibly, do not have such good service
(and that will come down, possibly, to the quality or it will
come down to perception), that is a responsibility that we have
as the scheme manager to ensure that we put right. We do work
very proactively with Mr Kohler, in terms of Help the Aged and
Age Concern, and with the NEA to ensure that what we have in place
for our delivery advisory board, which comprises senior stakeholders
on the subject of fuel poverty, is that we take advice from our
colleagues to understand what more we could do to make Warm Front
more efficient. When we look at some of the changes that we have
made in the scheme, especially over the last 12 months, we have
very much now a programme which has the customer at the heart
of it.
Mr Armstrong: I think the important
thing, to build on that, Mr Tipping, is we talk a lot in statistics
around Warm Front because of the scale of the programme, and it
is a programme that has helped, as Hayley said, over two million
customers since it was launched, but it is important with a programme
such as this not to get lost in the statistics either. Those 200,000
homes a year are 200,000 homes a year that are saving, on average,
about £350 a year, thanks to the Warm Front improvements.
That is 200,000 families across the UK who are now not having
to worry as much about when the energy bill lands, and are able
to lead their lives in a healthier, warmer home. So it is important,
also, to recognise that every single one of those numbers represents
a family whose lives have been improved quite substantially.
Q56 Paddy Tipping: I accept that,
and I do not have a problem with that at all, but you will know,
because you have seen it, that during the course of this inquiry
a lot of people have been in touch with us. I know there are lots
of testimonials—I see them—but you have had an opportunity
to look at these letters of complaint. What do you make of them?
Ms Peters: In terms of the media
coverage that we have had recently, I would always say that, at
the end of the day, when we have looked at the analysis for the
complaints that we have received, predominantly through the BBC
(and those came from them), that related to work that was done
a couple of years ago; it was work that was undertaken in a period
where Warm Front was going through a transition period. We do
take feedback from our customers most importantly, and I do not
know any business that cannot do that. What we have, as a consequence,
done is we have worked with the Department over the last 12-18
months to ensure that we take the feedback we have had from our
customers, so incidents around quality and in terms of how seriously
we now take quality issues with our installer network. If I can
just take you through some of the changes that we have made through
this scheme and in response to some of those complaints, that
will then help to put into perspective some of the feedback that
the media has been covering. Over the last 12-18 months, as I
said, we have been putting the customer at the heart of the programme.
What we now have in place is a programme which manages the customers'
expectations, from start to finish. So from the point of applying
for Warm Front you know exactly what the next steps are going
to be. When we go into the home and we survey the customer's property,
we do not just survey the customer's home we actually look at
the customer as well, so we identify through the passport benefits,
as specified by the Department, as to whether that customer is
eligible. During the winter we also make that assessment of the
customer to understand who is in a really serious situation of
vulnerability, and colleagues from Macmillan Trust talked about
customers in cancer treatment. When we go through a survey with
customers who need a heating system, whether it is a replacement
system or a new central heating system, we actually undertake
a full computer-aided design drawing. This is where they actually
get a physical drawing of the property to show where the radiators
will go, where the boilers will go and where the pipes will go
in the house. So there is nothing there for the customer to say:
"Well, actually, I didn't know that." That was one of
the fundamental bits of feedback that came through the correspondence
that we have had with customers over the last 12 months. As a
consequence of that, the information that the installer now gets
is something that the customer has seen and they have agreed to,
and then that sets the quality standards that have been put in
place for those installers to work to. We now have an installer
performance rating system in place with our contract network of
90 installers across Warm Front. The foundations for assigning
an installer an installer performance rating score is based on
the level of complaints they have received and the nature of those
complaints. It is based on the levels of customer satisfaction.
We proactively go out and talk to 2,000 customers every month
about the performance and the quality of the work that has been
done in their home. The feedback from that is actually used to
determine the performance rating for that installer. We one hundred
per cent quality check all heating installations. That is absolutely
fundamentally key. So when you do go into a home and eaga undertakes
those quality checks, if there are issues those are taken up straight
away and those are resolved for the customer on their behalf by
ourselves or in conjunction with the installer. We also look at
the time that it takes to complete work and whether there are
any issues with health and safety. All our installers are now
required to undertake post-installation customer calls, so there
should not be any surprises from the day you finish an installation
at a customer's home. At the end of the day, you want to make
sure that somebody who has come into your home to install a heating
system is there and will treat your home in the way you want your
home to be treated. So there should be no surprises when that
installer makes that call, and that actually if there is something
wrong and they have missed it, they are back within 48 hours to
rectify that. What I am saying is that there are some significant
changes that have been made to the scheme which will address some
of the issues that have been raised in the media recently. To
put it into context for our installers, good performance and happy
customers equates to increased levels of work that we are able
to apply to them under the scheme.
Q57 Paddy Tipping: Have you ever
sacked an installer?
Ms Peters: No, we have not.
Mr Armstrong: The reason for that,
Mr Tipping, if I can come in on that, is we have, as Hayley touched
on, 90 subcontractors that are registered that have crossed all
the hurdles that we asked them to cross and have all the qualifications
that we require of them. So if we identify an installer, or a
couple of installers, whose work starts to drop off in terms of
quality or in terms where they might have one particular health
and safety issue identified, what we would do, as a better course
of action, would be to stop allocating work to that installer
completely and work with them on an improvement plan to slowly
drip-feed much lower volumes of work and make sure that they bring
their quality back up to the level required. We have found, in
our experience, that is an easier way of dealing with it than
having to suspend, remove and then recruit for new installers
and go through the process. It is better to stop, put in place
a staged improvement plan and then work with them to get them
back to the requisite level.
Q58 Paddy Tipping: One of the issues
that has been around in the past winter is that there have been
elderly people without a functioning boiler, without heat and
hot water. There is a perception—I put it like that—that
you will come along and sort them out and sort them out quickly,
but the scheme is not designed to do that, is it?
Mr Armstrong: No. That is one
of the biggest challenges that we face, particularly given that
we have had the coldest winter for 30 years. One of the biggest
challenges we have had over the last three or four months has
been trying to manage customer expectations. The scheme has not
been designed to be an emergency service; it has been designed
as a cash-limited scheme that is intended to service people as
and when they present themselves. Of course, if you are an 80-year-old
customer who has no central heating or hot water, my just saying
it is not an emergency service is not a good enough answer; you
want to have that service as soon as possible. We do get a lot
of enquiries around the length of time that people are having
to wait. Unfortunately, set against the levels of demand that
we have seen (and the levels of demand have only gone up increasingly
over the last month or two with the weather conditions), we could
do central heating installations twice as quickly as we do them
now, if we wanted to, but all that means is that we would run
out of money in half the time, and we would have to close the
scheme altogether. So we have to manage the budget available from
government against the demand that is out there, and unfortunately,
over the last two or three months we have seen demand the like
of which I do not think the scheme has seen before. So what we
are having to do in order to make sure the scheme stays open is
extend the length of time that people are having to wait. Now,
with a different hat on I would far rather that people were coming
to the scheme and knew the scheme and understood it was there
as a source of help; I would far rather that than people did not
know it was there to help them. However, the challenge that presents
is if more and more people present themselves the length of time
that people have to wait does go up to make sure that the scheme
can stay open for people that need it.
Q59 Paddy Tipping: Just remind me
about the budget situation. The Chancellor in the autumn statement
was saying there was more money available, but my impression is
that in the current year you have, as you have put it, had to
eke out the budget because you have been frightened of running
out.
Mr Armstrong: Yes. We were scheduled
to take a substantial reduction in budget next year. Thankfully,
the additional amount of money that the Chancellor announced in
the Pre-Budget Report means that the budget will only drop from
369 million this year to 345 million next year. So it is a much
more manageable transition. However, what I do not think we necessarily
understood at the time was the spike in demand we would see over
January/February and the pressure that that would place on a budget
that was already stretched. We know from the amount of customers
that present themselves to us that if we just ran the scheme unchecked
and ran waiting times as people came in and as the supply chain
could do them then natural demand for the scheme is probably of
the order of £450-£500 million a year. Obviously, we
live in a time where we have to manage with the budget available,
and the Department are very supportive in terms of making the
case for that budget.
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