Rising energy costs has once again brought into sharp focus the precarious high-wire act that many households face when it comes to managing their finances. For those just about managing – or perhaps recovering from the financial wounds inflicted by the pandemic – a ‘bill shock’ like this could be the tipping point.
There has long been a strong link between fuel costs and poverty but at CCW we’ve also been acutely aware of the difficulties many people face in affording water. It seems unthinkable that anyone would find themselves unable to afford this basic human need. But over the years consumers have shared with us experiences of missing meals or even rationing water use just to keep their payments affordable. These are choices no-one should have to make.
Just over a year ago we were presented with a rare opportunity to forge a new path towards ensuring no-one has to ever worry about affording their water bill. The UK and Welsh Governments asked us to lead an independent review into the existing support for households in England and Wales and how it could be strengthened.
Working in partnership with the industry and organisations boasting a wealth of experience in utilities and poverty, our review brought to life the scale of the challenge we face.
It revealed that while water companies had made some significant headway in supporting those unable to afford their water bill, the majority of those in crisis were still not getting the help they need. Huge variations in the funding and eligibility criteria of different water company social tariff schemes – which cap the bills of low-income households – had created a postcode lottery of help. A household facing the same financial hardship might receive a bill discount of up to 90 per cent, or nothing at all, depending on where they live.
Other obstacles also lay in the path of customers. These varied from mental and emotional barriers – including a reluctance for people to confront their own financial difficulties – to a lack of trust in utility companies. Poor communication from companies and the complexity of existing schemes often made these obstacles even harder to clear.
In May this year we tabled the findings of our review including a series of recommendations we believe can break down these barriers to help. The central plank of our plan is the creation of a single social tariff for England and Wales. This would replace the patchwork of schemes that companies have developed themselves. It would ensure no-one spends more than 5 percent of their household income – after housing costs – on water bills. Funded through either a bill cross subsidy or public expenditure, it would immediately lift 1.5 million people out of water poverty. It would also provide peace of mind and certainty for every household that they would be able to afford their water bill, even if their circumstances suddenly changed.
Our blueprint for change is now being considered by government, with more detailed work underway to explore how the new tariff could work and be implemented. In the meantime we’re pressing forward with a wave of other recommendations tabled by our review.
Many of these changes could be swiftly rolled out, including giving customers far greater choice and flexibility over how they manage their payments. The adoption of an industry-wide approach to crisis funds and simplifying the application process that covers all support schemes would also improve access to help.
In the longer term we want to help water companies develop ‘common branding’ for all the main support schemes to help bolster awareness and end confusion over assistance.
Water is not just the essential through which some of us might experience poverty – it’s also the medium through which most of us will feel the impact of climate change. Droughts and flooding are becoming more commonplace. Overcoming these challenges – whether that’s making sure we stave off the threat of water shortages or the increased risk of sewer flooding – will demand substantial investment from water companies. Ultimately it will be customers that foot the bill, which brings us full circle back to the importance of ending water poverty.
With a robust plan in place to keep bills affordable for those struggling to pay, the conversation with other customers about funding greater investment in protecting our services and the environment becomes easier. That’s why tackling water poverty should be seen as part of the solution – not an obstacle – to overcoming the pressures posed by climate change.
Andy White is a Senior Policy Manager at the Consumer Council for Water. You can read their full report here. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Number 10]
