08/12/09
An independent review raises important and timely questions facing the water industry, its customers and society.
The review team's final report, published today by Anna Walker, takes head-on the fact that in many parts of England and Wales water is more scarce than many people recognise. As a society, they say, we will need to value water and the water environment more highly than we do now.
The Walker Review makes many proposals for facing up to these challenges.
Meters
The review proposes a rapid increase in the number of households with water meters during the next decade. Paying for the water we use, rather than a fixed charge, helps us be more water efficient, save money, and put less pressure on the environment. But the team understands that installing meters has a cost that must be justified by the benefits. Balance is important.
Walker sees that we need good economics to reach the right answers on the pace of meter installation and impact on customers, and wisely proposes that Ofwat lead the implementation of this policy.
Affordability
The Walker review also deserves praise for raising affordability as an important issue. For example, ministers would do well to look carefully at recommendations that water customers should no longer pay in their water bills for draining highways and cleaning up pollution caused by other sectors.
Another recommendation likely to be effective in helping low-income families is that the Department of Work and Pensions consider offering budgeting support - not more cash but payment facilities - to those with outstanding bills but also those just coming out of debt. The DWP scheme is designed to help customers who want to help themselves and deserves serious consideration.
Other ideas for helping low-income families seem less well-founded however, because they depend on increasing considerably the cross-subsidy that already exists between high- and low-income customers through the old rateable value system.
Figures in the review show that if, as proposed, support is given to all low-income households, or to all those with children, the annual bills of other customers would increase by between £6 and £17. This is more than research shows most customers are prepared to pay to help other customers in addition to the usual benefits paid by government.
Debt
It is estimated that bad debt presently adds £12 to every customer bill and that this extra burden is likely to increase as the effects of the recession are felt. Walker recognises that this problem requires a multi-faceted approach - there are no single silver bullets.
Water UK has long campaigned for legislation requiring landlords to provide information on their tenants, or to be liable themselves for tenants' bills, a provision that Walker now recommends become law. Tenanted property accounts for a disproportionate amount of bad debt so proposals addressing this are very welcome.
Pamela Taylor, Chief Executive, said:
"Anna Walker's review provides fresh thinking about urgent questions facing the water industry, its regulators and the government. The answers can't be put off indefinitely without increasing risk to customers and the environment.
"Some of the Walker proposals make more sense than others, but the review sets a new and valuable direction for policy debate. It would be a pity if the report were allowed to gather dust. We hope ministers will examine the recommendations carefully and involve all sides in devising and implementing solutions."
The Independent Review of Charging for Household Water and Sewerage Services (report)
For more information please contact:
Water UK Communication
020 7344 1809 (out of hours 07833 450544)
