A single social tariff to help the 1.5 million people in England and Wales who are currently living in water poverty would end the “postcode lottery” of support from firms, a consumer group has said.
The tariff is among measures proposed by the Consumer Council for Water (CCW) to help struggling households get help from their supplier following its independent review of affordability of water on behalf of the UK and Welsh Governments.
The review found that five out of six customers who cannot afford their water bills are not receiving the help they need despite a significant rise in company support schemes over the past decade.
It found that some of the schemes were hampered by insufficient funding and large regional variations in eligibility criteria, creating a “postcode lottery” of help.
The watchdog said a single social tariff for England and Wales capping bills at 5% of income after housing costs would ensure consistent and fair support based on need rather than postcode.
Those who are eligible would benefit from an average bill reduction of £190, with the scheme funded through public expenditure or a customer cross-subsidy.
The report also recommends water companies take steps to develop a better understanding of their customers’ needs and raise awareness of the support they can offer.
The industry would be expected to continue to help fund a wider range of measures designed to prevent at least three million more households slipping into water poverty.
These would include giving water customers greater choice and control over how they pay their water bills using the latest technologies, and providing tailored financial help.
Companies would also be asked to write off water charges while social tariff applicants are waiting for their first payment of Universal Credit and to offer long-term bill incentives for low-income households with relatively low water use to switch to a water meter.
CCW said many of the recommendations in the report could be rolled out immediately with the support of water companies.
CCW chief executive Emma Clancy said: “We have a golden opportunity to create a simpler and fairer system and end the indignity of people skipping meals or other essentials to pay their water bill.
“Many people are craving certainty in these difficult times and these proposed changes would give millions of households one less thing to worry about and greater peace of mind – whatever the future holds.”
Environment minister Rebecca Pow said: “The review sets out practical recommendations to deliver on our levelling-up agenda, exploring new ways of doing things that could help the most vulnerable customers.
“I look forward to considering these further and working with the sector to build a stronger, better and fairer water service for those who need it most.”
Water UK chief executive Christine McGourty said: “We welcome the publication of CCW’s Affordability Review, which could not come at a more important time.
“Water companies believe bills should be affordable for all customers, whatever their circumstances and wherever they live, and that a new approach to supporting people who are struggling financially is needed.
“The review’s bold and far-reaching recommendations on social tariffs will enable real progress to be made towards the shared goal of ending water poverty.”
Gillian Cooper, from Citizens Advice, said: “Water is essential, but sadly we know not everyone can easily afford it.
“As households continue to feel the impact of the pandemic, people facing financial difficulties need better support to help them pay their bills.
“CCW’s proposal to establish a single social tariff would help make water bills affordable for all households on low incomes.”