Consumer duty for public bodies: consultation

3. Introduction

In recognition of the importance of consumers, the Consumer Scotland Bill was introduced to the Scottish Parliament in June 2019. The Bill primarily seeks to establish a consumer body – Consumer Scotland – to represent the needs of consumers.

Consumers have a strong and growing influence on national economic productivity and business profitability through their purchasing decisions. In 2017 alone, consumer spending in Scotland was £104.1 billion and contributed two thirds of total GDP. The Scottish Government wants to encourage businesses to grow, and supporting and protecting consumers helps to do this. It is particularly important at this time when the Covid-19 pandemic has had a huge impact on the ways in which we as a society shop and consume. The consumer will play a critical role in shaping and supporting a green economic recovery.

Following stakeholder feedback in response to our initial consultation on a consumer body for Scotland, the Act imposes a duty on relevant public authorities, when making decisions of a strategic nature, to consider the impact of, and have regard to, those decisions on consumers in Scotland and the desirability of reducing harm to consumers in Scotland.

The public authorities the duty should apply to have not been specified in the Act. This has been done deliberately to allow this considered period of consultation so that the duty is targeted where it will have the most impact.

Competition and Markets Authority (CMA) market studies have identified that consumers are often unable to access market benefits, for example energy consumers with certain meter types cannot access the same tariffs or switch providers as easily, costing them more to heat their homes. In addition, there are issues that affect Scotland more than the rest of the UK, such as parcel deliveries, where consumers living in more remote areas of Scotland find that couriers will not deliver to them, or will but only at a significantly increased cost.

Many public policies impact on the consumer or require consumer support; for example the carrier bag levy was introduced as part of the Scottish Government's Zero Waste and Climate Change policies and led to significant changes in how some consumers shopped.

Work has already been undertaken whereby specific policy areas within Scottish Government were invited to take part in pilot interviews, and asked how they currently consider consumers and how they could be supported to do this in future. Building on these interviews, and in collaboration with colleagues, a set of case studies were developed, which is hoped will support colleagues to understand the value of considering consumers in policy making. Examples of the case studies developed include:

• Introduction of the Deposit Return Scheme (DRS)
• The Big Climate Conversation
• Scottish Water – Strategic Review of Charges (SRC) 2021-2027
• The UK Government's Green Deal Scheme 2012-2015

Consumer Approach Case Study Strategic Review of Charges (SRC) 2021-27

Background

Scottish Water is a publically owned company and Ministers are required to set its objectives for investment and principles for charging consumers. The Scottish Government is in the process of defining objectives and principles of charging for the next regulatory period of 2021 to 2027. The objective and principles of charging are available at the following links:

https://www.gov.scot/publications/principles-of-charging-2021-2027/

https://www.gov.scot/publications/scottish-water-directions-2020/

As this process involves all consumers in Scotland, Scottish Water seeks to have as wide a view as possible from all involved and it works with partner organisations such as Water Industry Commission for Scotland (WICS), Citizens Advice Scotland (CAS) and the Customer Forum (CF) to reach consumers. An Early Community Engagement Group (ECEG) was formed to seek feedback and consider pilot projects identified by Scottish Water where community engagement methods could be tested and evaluated.

Additionally they have developed a new engagement process using the ECEG, and as a result, promoted alternative solutions for projects which may have greater benefits for consumers.

The inclusion of a wide range of views from partners and consumers when making such changes ultimately has a positive impact on consumers. If Scottish Water were to proceed without undertaking prior consultation, the outcomes may have a detrimental effect on certain groups of consumers. It is acknowledged that early engagement with consumers and communities creates opportunities to better take into account the factors that are important to them when designing projects. The main benefit of engaging at an early stage with communities is to build-in community and consumer input into both what is to be delivered and how it will be delivered.

Establishment of Consumer Scotland and the introduction of the Consumer Duty will assist policymakers to consider consumer concerns. This greater focus on how policies affect consumers could lead to a better understanding of the consequences of policies or decisions on consumers; thereby identifying unintended consequences and making the most of opportunities to deliver better policy outcomes, building both consumer support for policies and consumer confidence along the way.