Vacants Management

Context
 
When the Scottish water market opened up to competition, Business Stream was created to act as the retailer on day 1, inheriting the entire retail customer base from Scottish Water, including thousands of vacants.
To incentive all licensed providers to manage their vacant properties effectively, the regulator introduced an incentive scheme, and then added a penalty scheme where Licensed Providers would incur a charge if Scottish Water found that any commercial property was incorrectly marked vacant. At the time the penalty scheme was introduced, Business Stream had over 40,000 properties marked vacant, so the potential risk was significant.

At the time the contract commenced, many properties had never been billed since the market had opened. Some businesses were not aware of the need to pay for their water services separately to business rates (Scottish domestic properties pay water charges together with their council tax); meanwhile, thousands of properties had entered the market as gap sites following large-scale projects undertaken by the wholesaler.

When the penalty scheme was introduced, Business Stream had over 40,000 properties marked vacant, around a fifth of all properties in the market. As such, it needed trustworthy customer-focused partners to undertake vacants management on its behalf.

Hydrosave as trusted partner
 
In early 2012, following a competitive tendering process, Hydrosave was selected as one of two suppliers to undertake this important service on behalf of the client. Over the course of the initial framework period, Hydrosave outperformed the second supplier to the extent it was awarded a greater number of properties in each call off period.

Hydrosave was then appointed sole supplier on two separate occasions when the contract was extended.
 
Our results
 
In FY2014-15 and 2015-16, we billed nearly 10,000 occupiers for our client, generating estimated billing income of nearly £12,000,000 and an additional c£600,000 in incentive income. In the first two years of the contract, the volumes were even higher, but as the contract has progressed, more and more occupiers have become aware of the need to contact their licensed provider when they move premises. The volume of properties registered marked vacant has now almost halved, and of course the majority of these properties are actually vacant. The vast majority of properties switched to occupied have done so without incurring a penalty charge from the wholesaler, in fact such was the level of billing activity, the wholesaler drastically reduced its trace activity under the penalty scheme.

Since we began working for Business Stream on vacants management, we have also removed thousands of properties from the commercial water market by liaising with the wholesaler to deregister duplicate, domestic and demolished properties, or properties not in receipt of services. Together with the thousands of properties where we have had to correct services, our activity has been a key driver in cleansing the market data in Scotland.

Read on to find out more about how we’ve become the vacants management supplier of choice for the leading licensed provider in Scotland.
 

We developed a range of desktop and field trace processes designed to determine the correct occupancy status as quickly and cost-effectively as possible, whilst ensuring the correct occupier and legal entity were identified. Getting the correct legal entity is crucial in any default situation, as failure to do so can make it much more difficult and costly to recover unpaid sums.

Our dedicated outbound and inbound contact centre agents have built detailed knowledge and experience of water and waste services, and this allows them to discuss each properties billed services with the occupier at the point of contact, thus ensuring bills are accurate and don’t come as a surprise. This approach means that our trace and billing activity has very little adverse impact on our clients day-to-day operation, minimising unwanted contact and failure demand whilst mitigating against unpaid bills.

For those circumstances where it is not possible to engage with the occupier, we designed processes (in collaboration with the client) aimed at expediting the billing process whilst minimising erroneous or inaccurate bills.

Where services are found to be incorrect, we liaise directly the wholesaler on our clients behalf to take corrective action, without delaying the correct recording of occupancy status.

When you have an end-to-end process like Hydrosave’s, there can be various routes a property takes between an occupier being identified and that occupier receiving an accurate bill reflecting the services being received. Usually we follow the happy path of “contact occupier, collate details, confirm services, send bill”, but in some cases there needs to be an interaction with a customer head office, a specific specialist team within the client’s business, or (where services need validated) with the wholesaler. Add to this time-bound incentive claims submitted to the wholesaler, and there is a need for a robust workflow management system.

At the outset of the contract, we worked with the client to develop a detailed set of business requirements, so the system we put in place met both their needs and our own. The system was built at our cost and within a matter of weeks, and has evolved over time to meet both our own and our clients changing demands.

The system facilitates daily, weekly and monthly reporting requirements, and also shows the full trace and billing history of every property, invaluable should there be a subsequent query or challenge from the occupier.