The levels of bad debt recorded by United Utilities (UU) and Anglian Water have both recently increased, and the level of recognised bad debt is predicted to increase from £1,635 million – which adds £15 to each household water bill – when a review is conducted in the autumn.
CCWater head of policy and research Deryck Hall told Utility Week that the level of bad debt and the pressure faced by the industry is growing due to a lack of customer awareness of the support available and more bills going unpaid.
He added: “Growing levels of bad debt suggest too many customers that are struggling to pay their water bill are not seeking or getting the support they need – something which was reflected in our own research last year.”
A total of 15 of the 18 water companies currently offer social tariff schemes to their customers, but Hall stated that take up is still “too low”.
CCWater senior policy manager Andy White added: “We know from speaking to water customers on low incomes that many are reluctant to ask for assistance or are simply unaware that help exists.”
UU posted an increase of bad debt of £16 million in its full year results for 2014/15, bringing it up to 3.1 per cent of regulated revenue – up from 2.2 per cent in the previous year.
The company highlighted last year that the issue of bad debt was set to become more “challenging”, in particular due to the “high levels of income deprivation” suffered in its region.
The water company expects this level to fall slightly next year to 2.5 per cent of regulated revenue in 2015/16 but for it to “continue to be challenging”.
Anglian Water also recorded a “modest increase” in its bad debt for 2014/15, with it increasing from £32.4 million in the previous year to £33.1 million.