A radical rethink may be needed on how financial assistance is funded for water customers, the Consumer Council for Water (CCWater) has said.
The consumer group’s latest water for all report reviews the performance of water companies in England and Wales to support household customers who are financially vulnerable.
It found that almost 700,000 low-income customers received bill reductions through a range of assistance schemes in 2018/19 – up 28 per cent on the previous year.
However, its own research shows that 3 million customers in England and Wales still say their bills are unaffordable, with existing schemes only having the potential to help less than half of those struggling to pay.
Furthermore, almost 420,000 people have registered for extra help through priority services, up more than a fifth on the previous year.
Despite the increase, the overall percentage of households on priority services registers remains “very low” and a “long way short” of reaching the 7 per cent target Ofwat wants to see achieved by 2025.
There are substantial regional variations in the number of customers receiving assistance and the levels of support on offer, something CCWater says is unfair and a result of schemes being developed at a company rather than industry level.
Average bill reductions provided through customer-subsidised social tariffs range from as much as £271 to as little as £19. This, CCWater says, is largely because the impact of these schemes is heavily constrained by companies relying on other customers’ willingness to fund them.
According to CCWater only three companies – Welsh Water, Yorkshire Water and United Utilities – currently use some of their own profits to fund social tariffs, despite repeated calls from the group for other suppliers to follow suit.
This could mean a “radical rethink” is needed on how financial assistance is funded in the future to make better progress in eradicating water poverty.
CCWater says it has found that customers are supportive of the idea of public funding being used to help finance assistance with water bills.
As a result of the report, the consumer group is calling on the industry to work more collaboratively to raise awareness of priority services and make it easier for friends, relatives and neighbours to make companies aware of the support that someone close to them needs.
Meanwhile, companies have been urged to do more to identify and help customers in need of temporary support, for example, due to short-term illness or the birth of a child, and make sure that assistance is delivered at the right time.
Andy White, senior policy manager at CCWater, said: “Many customers still suffer in silence and sacrifice other essentials like food and heating in order to pay their water bill – no one should ever have to make that choice.
“Companies have the power to help many more struggling households by matching the generosity already being shown by other customers who are subsidising social tariffs.”
In response to the report, a spokesperson for Water UK said: “Ensuring water bills are affordable, especially for the most vulnerable, is a priority for water companies.
“Bills have remained pretty much the same since 1994 in real terms, and by 2025 there will have been a decade of real terms reductions in bills – which currently average around £1 a day.
“Almost 700,000 vulnerable customers are currently receiving help to pay their bills from their supplier – up 28 per cent – but we have plans to go even further, with companies planning to help 1.4 million customers by 2025.
“In addition, through our public interest commitment, water companies will make bills affordable for all households with water and sewerage bills which are more than 5 per cent of their disposable income by 2030, as well as developing a strategy to end water poverty.”