Water companies should fund social tariff extensions

The support provided to needy households from existing social tariffs is a "drop in the ocean" compared to what is needed, says Tony Smith

At the last Price Review back in 2014 the water industry made a commitment to help 1 million customers facing financial hardship by 2020. Almost three years on and water companies are on course to meet that ambition with around 780,000 people – or 338,764 households – receiving some form of assistance. Of course that’s positive news but does it really go far enough? Not according to our research which paints a consistent picture of around 3 million households in England and Wales who believe their water bill is unaffordable. That means financial support may only be available to about 1 in 5 households who actually need it – a drop in the ocean.

With another Price Review already looming large on the horizon, the industry has a golden opportunity to put affordable bills at the top of the agenda and show that it is serious about addressing this challenge. One of the ways water companies could do this is by dipping into their own deep pockets to extend the funding of social tariff schemes. These customer-funded schemes have helped to reduce the bills of more than 260,000 low income households. But can you imagine what impact they could have if they didn’t rely almost entirely on other customers’ willingness to fund them? Our research shows that customers would be willing to contribute more if they could see their water company was also playing its part.

Some companies are already making a contribution and we want to see others follow suit by making a commitment at the next price review to part with some of their own cash to help those who need it most. After all, the cost of not acting could end up being far greater.