BIRMINGHAM, UK, June 29, 2009 -- The UK's Consumer Council for Water today welcomed Anna Walker's interim report on charging and metering, as it highlights the increasing problem of affordability of water and sewerage services, but it is too early to say whether some of the recommendations go far enough to protect customers.
Dame Yve Buckland, Chair of the Consumer Council for Water, said: "It is encouraging that governments in England and Wales, and the independent review recognize that affordability of water is a problem, and are working to find solutions.
"There is currently little support available for those who struggle to afford their water bills, and when asked the question 'Are your water bills affordable?' one in five customers tell us no.
"We are pleased the review recognizes that government support should reflect the variations in bills from one area to another. Water affordability is an acute problem particularly in the south west of England and in Wales, but we are not sure if Walker's recommendations have the potential to address the full scope of the situation.
"Water bills have risen sharply to help pay for environmental improvements, and Walker makes a good argument that it might not be right for water customers to pay for work that benefits the wider community, especially since water bills are not based on ability to pay. This needs to be looked at in more detail. New, tighter European targets to improve water bodies in England and Wales could mean water bill increases across England and Wales for at least the next 20 years without a more appropriate way of funding the necessary work.
"We agree with the review, that more should be done to better allow companies to chase customers in debt. But it is important to remember that a significant amount of debt comes from those who can't pay. Giving companies more authority to collect bad debt is only half of the solution, and at this stage we would question whether Walker's recommendations can go far enough to help those who genuinely cannot afford their bills.
"We also question where money for any financial help would come from. Customers tell us that they do not like the idea of subsidizing others' water bills. Only 39 percent would consider a £2 cross subsidy acceptable. More importantly, passing the costs on to customers simply shifts the affordability problem from one customer to another. Government help would offer the fairest alternative, and customers see it as the UK governments' responsibility to help those struggling to afford their water bills.
"On the issue of metering, we agree with Walker's recommendation to increase metering only where it makes sense. While many people can and do save money by having a water meter installed others could find they pay more. A robust safety net needs to be in place to protect those who may face unaffordable bills before metering is considered on a wider scale.
"We are also pleased that the review notes the fact that highway drainage charges add £500 million to customers' bills each year, and we have and will continue to press for these to be removed, as it could save £20 on a household's annual water bill.1 It is also encouraging that Walker is recommending customers have more of an influence in the water regulator's price setting process, which the Consumer Council for Water has been advocating, and doing, with growing success.
"We will be taking time to go through the report, and will highlight customers' concerns to the review team. With large numbers of customers struggling to afford water bills, the situation needs to be addressed urgently."
The Consumer Council for Water is a non-departmental public body reporting to the Department of Environment, Food and Rural Affairs and the Welsh Assembly Government. It has a committee for Wales, and four committees in England.
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