After investigating sexual and physical abuse of more than 250 children in care over a 16-year period, Waterhouse found the two former social services departments involved in the north Wales abuse scandal - Clwyd and Gwynedd - had "grossly defective" complaints procedures.
He said it was essential all councils in Wales appointed a specialist children's complaints officer.
The third recommendation of his report read: "Every social services authority should be required to appoint an appropriately qualified or experienced children's complaints officer."
The Welsh Assembly responded by saying they agreed to this recommendation in principle.
But three years after Waterhouse published his report 'Lost in Care' only eight of 22 councils have appointed a dedicated officer to listen to children when they find the courage to pick up a telephone. The remaining 14 councils have a designated complaints officer, but the difference is that they deal with complaints from all services, not just children.
The creation of a children's commissioner for Wales was also a recommendation of the Waterhouse report, and ironically it was the first holder of that post, Peter Clarke, who discovered the failure to respond to Waterhouse's call for specialist children's complaints officers.
In his new report 'Telling Concerns' Clarke said there were "worrying inadequacies" in Welsh services to protect vulnerable children, and he urges local authorities to comply with the recommendation.
So what are the other two thirds of Welsh councils doing instead of having a complaints officer?
In Caerphilly, south Wales, the council has not appointed a specialist children's complaints officer. In the last year 50 complaints about children's services were received by the authority, of which 11 came directly from children, with most of the remainder coming from parents.
Assistant director Derek Millington told communitycare.co.uk the authority has a customer services manager, who deals with complaints from all client groups, and a children's rights officer who may take a complaint but does not then handle it.
"Having a complaints officer for children is one way of doing it, but there may be others," he says.
"We appointed a children's rights officer and we wondered whether that person should deal with complaints, but we decided it would be better if this person provided support to children, making sure they have advocates," he says.
New enhanced contracts for independent advocacy have recently been awarded, he says, enhancing the service offered to looked after children.
Having said all that, Millington says the authority had not ruled out the possibility of appointing a children's complaints officer, and it will be looked at again in light of Peter Clarke's report.
For Jane Isaac, NCH Cymru public policy officer, it is crucial that councils do respond to Waterhouse: "The Waterhouse recommendations are very important, and complaints officers are a vital element in listening to children and we fully support their role.
"Complaints officers are in a position within local authorities to prioritise children's complaints and build up the necessary expertise in relating to children," she says.
Greta Thomas, director of the NSPCC in Wales, agrees: "The importance of actually having a dedicated complaints officer is that you are able to ensure that children and young people's complaints are dealt with in a much more proactive way."
Isaac and Thomas both stress that complaints officers are important elements of what must be wider approaches to handling children's concerns, with independent advocates also playing a key role.
Perhaps the last word should go to Waterhouse. "We called our report 'Lost in Care', because children feel isolated if they do not have access to a complaints procedure that they understand and are prepared to use, and without that, the sense of isolation will continue," he says.
Children and Young Persons Bill: Last-ditch amendments fail
10 October 2008
Children’s services
04 July 2008
Has the DCSF lived up to expectations?
30 June 2008
Children
20 April 2007
World class commissioning learning resource
28 November 2008
Baby P case in Haringey
18 November 2008
Sharon Shoesmith removed after 'devastating' inspection report
Details of government consultations
28 November 2008
Private Member Bills
21 November 2008
Government Legislation
21 November 2008