Outstanding debt from unpaid water bills rises to £2.2bn
Ofwat is urging water companies in England and Wales to do more to prevent unpaid water bills and help customers struggling to afford their bill. The call comes as a new report by the regulator reveals that £2.2bn unpaid revenue is now outstanding, compared with £1.9bn in 2010.
The regulator’s Affordability and debt’ report reveals that between 2010 and 2015 there has been a big increase in unpaid bills while the number of customers at risk of struggling to pay their water bill has remained stable. The cost associated with unpaid bills is around £21 a year for every household (£17 in 2009/10). And the report shows that low-income households, working-age adults living alone, lone parents and single pensioners are more likely to have problems paying their bills, and are more likely to be in debt.
This rise in debt over the past five years comes despite below-inflation rises in average bills, and Ofwat’s latest price review will result in a further 5% real terms fall by 2020. The report recognises that even if water bills are being kept down, changes in income and the cost of other essential services going up has put added pressure on households’ budgets.
Ofwat has already challenged companies to do more to help those struggling to pay bills. This led in 2014 to companies committing to more than double the number of people benefiting from financial support to around 1.8 million by 2020. Yet the report shows that the availability and quality of help for customers varies significantly across companies.
Some companies have made progress in establishing more support and getting smarter at targeting customers who need help. And awareness of support is generally rising. Yet most companies have not achieved their initial targets for customers signing up for their new social tariffs, which offer cheaper bills to customers who are struggling to afford their bill.
Ofwat chief executive Cathryn Ross said:“Ofwat’s priority is to protect customers’ interests and clearly customers who struggle to pay get the help they need. This important research highlights that while three quarters of customers think their water services are good value there is a growing problem that more customers are not paying their bill.
“Some companies need to get better at collecting unpaid bills from those customers who can pay but don’t. Yet this report is clear that many households are feeling the squeeze and need support. While some companies are improving how they respond to these customers, others have to get better at identifying those at risk and helping those who are genuinely struggling.”
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