Severn Trent has allocated another £30 million of funding to its Big Difference Scheme, which allows low-income households to reduce their water bills by up to 90%.
The company said the extra funding will enable support to be extended to another 100,000 customers who are struggling to pay their bills in the face of a cost of living crisis.
The scheme, which is open to households with an annual income of less £16,385 in its licence areas in the Midlands, already provides financial assistance to 215,000 customers.
“As cost of living pressures continue to rise, we’re acting now to support people struggling to pay their bills,” said Severn Trent chief executive Liv Garfield.
“Our customers have the second lowest bill in the UK, at around £1 per day, but we know that for some, paying this remains a challenge. I’m pleased to announce a commitment today to help thousands more people on low incomes to reduce their water bill by up to 90%.”
According to the Consumer Council for Water (CCW), 6% of people in the Midlands spend more than 5% of their total income after household costs on water bills and are therefore classed as being in water poverty.
CCW chief executive Emma Clancy said: “No one should have to worry about being to afford their water bill so we’re delighted to see Severn Trent putting its hand in its own pocket to help thousands more low-income households at a time of real crisis for many people.
“Our independent review of water affordability set out a clear path to ending people’s worries over water bills and with the support of companies like Severn Trent and the wider water sector we can ensure people struggling to pay always get the help they need, when they need it most.”
Severn Trent noted that support is also available through its WaterSure scheme, which caps customers’ bills at the average yearly charge, and the Severn Trent Trust Fund, which has so far provided direct financial assistance to 627,500 customers.
The move was welcomed by Ofwat chief executive David Black, who said: “We’re pleased to see Severn Trent recognising the increased pressure facing customers and acting now to help those struggling in water poverty.
“Other companies should look to do more to respond to the cost of living worries and we will be issuing new guidelines to signal the increased expectations of Ofwat and the public.”
The new guidance for water companies on helping customers to pay their bills, access support and repay debts was released by the regulator on Wednesday (25 May) following a consultation.
In its response to the feedback it received, Ofwat stated: “We want our guidelines to encourage companies to improve outcomes for all customers, but we particularly want to see the treatment of customers in financial difficulty or vulnerable circumstances improve.
“We think that companies can do more to get the basics right and comply with not only the letter but spirit of our guidelines. We see too many examples of cases where a company claims to be delivering good services overall to customers, complying with our guidelines – but the experience of individual customers falls short.”
Nevertheless, the regulator said it has concluded that it is “too early to move to a solely principles-based approach now, particularly in the context of costs of living challenges. But we recognise, that a principles-based approach has potential to motivate and focus companies on what is best for their customers.”
Ofwat said it would revisit this work as part of its plans to develop, consult on and introduce a customer-focused condition in water companies’ licences, which it said may incorporate principles from the new guidelines.