18/02/10
In a new pamphlet, 'Drain on society - what can be done about bad debt?', Ofwat makes a strong case for action by government and others to solve a growing problem.
Three stark figures indicate the size of the problem:
• In March 2009 customers owed £1.4 billion to water companies in England and Wales
• Over half the total was more than 12 months old
• Bad debt adds £12 to every household bill.
Ofwat shows how and why water debt has grown. It cites an increase in overall consumer debt, the limited sanctions available to water companies, and customers in difficulty prioritising payment for satellite TV or energy over water.
Pointing out that all companies comply with guidelines on dealing with customers in debt and have become better at managing debt, Ofwat makes a strong case for new tools to enable them to identify such customers and collect unpaid bills.
Among the measures proposed for consideration are:
• companies able to obtain better information (for example from landlords) about who is liable to pay (see below)
• greater role for government in helping water customers in financial difficulty
• use of lower tariffs that do not increase costs for other customers
• use of reduced-flow devices and pre-payment meters where appropriate.
Some measures will need careful examination in partnership with a wide range of interests before implementation, but all could help with a problem that, left unaddressed, will become an even heavier burden on water companies and the majority of their customers.
Water UK supports Ofwat's call for action which is similar to its own policy on reducing customer debt.
Drain on society - what can be done about bad debt?
For more information please contact:
Water UK Communication
020 7344 1809 (out of hours 07833 450544)
Note
Water UK has welcomed a government amendment to its own Flood and Water Management Bill applying to water charges in rented property, where there are particular difficulties in recovering outstanding revenue. When the Bill is enacted, landlords will either take responsibility for payment themselves or provide water companies with information on who is liable.
