Delivering affordability assistance to water customers

25 Aug 2016

Research commissioned by the Consumer Council for Water (CC Water) has identified a number of cross-sector lessons on how to deliver affordability assistance to water customers.

“Delivering Affordability Assistance to water customers: cross sector lessons”, was carried out by Sheffield Hallam University’s Centre for Regional Economic and Social Research to inform and support work being done to make sure more customers who are struggling to pay their water bills get access to the financial assistance they need.

It builds on CCWater’s Living with Water Poverty project from 2014 in seeking to drive forward measures to improve awareness of water affordability assistance, which research has shown remains low.

Data from Ofwat, the water industry regulator, suggests that over half of low income households are spending more than 3% of their available income on water charges. CCWater’s latest research has found that 1 in 8 customers feel their water charges are not affordable. In order to pay their water bills, many low income families cut back on usage or sacrifice other essentials such as food or heating to ensure the bill is paid.

CCWater has been working with the government, Ofwat, and the Water sector to address this problem. The Floods and Water Management Act 2010 enabled water companies to introduce local customer funded social tariffs, offering lower bills to consumers who would otherwise struggle to pay. Since then, 19 water companies have implemented social tariffs and additional affordability schemes are being initiated throughout the sector, but customer awareness of such schemes is very low. You can find a guide to the existing social tariffs here.

In this research, a number of good practice principles and lessons from across the water, energy and other relevant sectors were identified through an evidence review and are outlined in detail in the report. It concludes with a number of suggestions for policy and practice which emerged from the evaluation review, including:

  • More evaluation of water affordability initiatives to develop an evidence base of what works. They recommend dedicating at least 10 per cent of the budget for independent evaluation of affordability initiatives.
  • Develop a better understanding of vulnerability, and developing a more informed, flexible and dynamic understanding of vulnerability in order to more accurately target affordability assistance. They advocate for moving away from welfare-related data to identify those in need of support.
  • Link the Water sector into the “Make Every Contact Count” agenda, used in the health sector, which would treat every contact with a customer as an opportunity to gather information and target appropriate support.
  • Situate water affordability within more holistic debt advice approaches.

Read more on the CCWater website and download the report here.