Government orders review into water affordability

CCW has issued a call for evidence after UK and Welsh governments requested the watchdog undertake an independent review of financial support available to water customers.

The consumer watchdog previously identified that around three million households struggle to pay their water bill yet awareness of available social tariffs remained low.

CCW will work within and beyond the sector to identify opportunities to offer more help to financially vulnerable households.

Eradicating water poverty over the next 10 years is one of the five public interest commitments made by the sector and coordinated by Water UK. The industry has reduced bills for more than 900,000 households and others are assisted through tariffs, schemes and payment breaks.

These measures are largely funded through other customers’ willingness to fund them, which CCW said falls short of addressing the scale of the problem and will be stretched further because of Covid-19.

Support available from different companies can vary considerably in terms of eligibility, the value of the assistance provided and the number of households that can be potentially helped each year before funding is exhausted.

“Financial help for struggling water customers was in danger of running dry even before Covid-19 so the time is ripe for us to explore how we can put in place fair and sustainable long-term support,” Robert Light, chair of CCW, said. “We will work with other organisations during the review to look at how we can build on the progress that has been made and make much deeper inroads into reducing water poverty.”

In a keynote speech at Utility Week’s Build Back Better Forum, Ofwat chief executive Rachel Fletcher spoke about affordability as a key challenge for the water sector. Fletcher praised the sector’s work to support billpayers through the pandemic but acknowledged that as furlough schemes end more household finances will be under pressure. She said in the coming months companies will be providing more help than they could have imagined or planned for 12 months ago.

She said the industry is on track to provide support to more customers than ever before over the next five years of AMP7.

Environment minister, Rebecca Pow, said: “We are proud of the legislation we introduced for water companies to assist households with their water bills. However, we recognise that some consumers may still struggle to get the help they need. In these challenging times we must support the water sector and ensure that customers, particularly those who are most vulnerable, receive reliable water services.”

Lesley Griffiths, the Welsh minister for environment, energy and rural affairs, said: “As the ongoing pandemic continues to pose economic uncertainties for many across Wales, we want to do all we can to push forward with our commitment to tackling poverty, through prioritising the needs of the poorest, and protecting those most likely to experience poverty or exclusion.

“Ensuring water affordability for vulnerable households plays a strong role in that approach, and I welcome CCW’s review as we look at how we can support households who may be struggling with paying their water bills.”

CCW is gathering views from individuals and organisations on must change to improve the support for households as part of its call for evidence until December ahead of publishing its findings and recommendations in spring 2021.