UU and Northumbrian demonstrate commitment to affordability

Northumbrian and United Utilities – the two companies championing the Public Interest Commitment on affordability – have set out ambitious programmes to help customers struggling to pay their bills.

United Utilities has expanded its social tariffs to help 13,000 people get out of water debt and aims to increase this to more than 300,000 over the coming five years.  Meanwhile Northumbrian has formed a partnership with a debt management charity StepChange to assist customers behind with payments.

United Utilities chief executive Steve Mogford and Northumbrian’s Heidi Mottram champion the industry-wide commitment to bill affordability. As part of Water UK’s Public Interest Commitments (PICs) the sector pledged to assist households that struggle with bills and end water poverty by 2030.

Mogford told Utility Week in December that the commitment recognises the industry needs to continue and enhance its efforts to help those most in need of support.

UU committed to provide financial support of £71 million through its affordability schemes, which assist people behind on their bills as well as offering debt support.

The 13,000 people who cleared their debts since last year have been on a Payment Matching Scheme, which sees UU match customers’ commitments to pay bills and contribute towards their arrears. If the customer continues to make regular payments, any remaining debt will be cleared after two years.

For its 2020-25 business plan, UU must reduce customer bills by 13.8 per cent by 2025 to £370 – compared to the 11 per cent cut the company originally suggested and the 11.9 per cent indicated at draft determinations.

The company said this would help 250,000 customers out of water poverty and offer financial support for an additional 66,500 to assist them with payments.

Furthermore, the company will introduce a price promise for households on a water meter who fear their bills will increase.

Ofwat’s final determination for Northumbrian’s PR19 business plan included a reduction of customer bills by 25.6 per cent compared to its proposed 21.3 per cent reduction. This was the largest bill reduction Ofwat imposed, with other companies averaging a 15 per cent reduction.

The company committed to supporting households with debt management and reduction with StepChange. The partnership provides a programme of assistance to customers to reduce arrears and re-schedule payments to ease debt problems.

Mottram previously told Utility Week that as well as the work with StepChange the industry was working with National Energy Action to identify customers in need of support. The PIC group is also trialling water efficiency opportunities as an affordability measure and develop more social tariffs.

UU implemented a number of tariffs and schemes that include delaying water bills for people awaiting a Universal Credit payment; WaterSure for households that use a lot of water due to family size or illness but struggle to pay for it; a scheme for pensioners that caps the bill at an affordable amount; payment by direct debit from a person’s benefits; and providing one-off payments from the Trust Fund to help clear all debts.

Both companies highlighted January as especially problematic for people struggling with debt. UU is participating in an affordability summit for financial advice services in the north west to explore more ways it can help young people manage their debt.