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Interview S outh East Water's Customer Challenge Group (CCG) was set up to challenge its host water company to produce a business plan for 2015-20 that reflected customer priorities and budgets. It has done that, and upped the ante by providing challenge to regulator Ofwat as well. After nearly two years of chairing the group, veteran consumer champion Roger Darlington remains full square behind the CCG principle. He commends Ofwat for taking the bold, innovative move of essentially using customers as partners in regulation. Moreover, he believes the approach has proved its value. His CCG's report, which went to Ofwat on 2 December alongside South East Water's business plan, concludes: "The effective embedding of the CCG within the company's business planning process has enabled a level of challenge that would not have been possible in the past." Darlington says the positive impact his CCG has had is clear if you compare earlier drafts of South East's business plan with the version finally submitted in December. In fact, his support of the model is such that he believes it could well have value outside of water. He mulls: "There's no reason why BT or Sky or the BBC might not say 'this model is interesting, why don't we set up a group of people who can really get to know us to challenge us?'." Darlington has also raised the model for review by the Essential Services Access Network, which looks out for consumer interests across must-have services including water, energy, finance and communications. Given his level of enthusiasm, it is unsurprising to find that Darlington's CCG was able to commend South East Water's business plan to Ofwat in December. Darlington praises the company's willingness to embrace the group and to be flexible and responsive to its concerns. His group also found South East Water's customer engagement programme (which featured 13 pieces of research, seven of which fed directly into the business plan) "impressive". He stresses, though, that it wasn't all plain sailing: "We had some tough conversations at board level, especially over the early drafts of our report." The CCG was particularly critical of South East's track record on complaints (per 10,000 customers, two years ago it had the highest number of complaints in the sector and last year the second highest). While programmes to address the issue have been implemented and progress made, the CCG "felt it right to highlight the issue both because of its centrality to the customer experience and because of a marked reluctance by the company to acknowledge the matter publicly as fully and frankly as we would have wished". Although pushing its terms of reference, the CCG also drew attention to South East Water's relatively high gearing ratio and "somewhat opaque" corporate structure. The latter includes entities in Luxembourg and the Cayman Islands. "We're not challenging its legality," Darlington explains, "but how customers might perceive a company located wholly in one part of one country with legal entities overseas and not in countries where investors are from" is relevant in terms of customer trust and reputational risk. Back to the day job, and after various interactions the CCG found South East Water's business plan ticked all the boxes: it meets statutory obligations, is based on sound customer engagement, is evidence-based, promotes outcomes that matter most to customers, and is affordable. UTILITY WEEK | 17th - 23rd January 2014 | 9