Customers struggling to pay their water bills are to receive financial help thanks to new ‘social tariffs’, Deputy Prime Minister Nick Clegg will announce from the Rio+20 Conference in Brazil today.
An estimated 2.4 million households have difficulties meeting the costs of their water bills. The move to support struggling families is made possible by new government guidance published today that will pave the way for water companies to introduce the new tariffs, giving them the power to reduce bills for the most vulnerable customers.
Water companies will be asked to select the customers who are most at risk of struggling to pay their bills.
At present, water companies are bound by Ofwat’s licensing conditions leaving them unable to cut bills, fearing that it would contravene the law. The government guidance, which has been developed following a consultation by the Department for Environment, Food and Rural Affairs, will free companies to make the cuts for vulnerable customers.
Speaking from the Rio+20 Summit, Deputy Prime Minister Nick Clegg said:
“We’re clearing the way for water companies to give some much needed help to the millions of people who struggle to pay their water bills. If you’re struggling to make ends meet, not paying for essential utilities isn’t an option but it can mean making tough choices elsewhere - like sacrificing healthy meals for the family or new school books.
“We’ve already announced tough new measures to see gas and electric bills fall by up to £100 a year. This will see struggling families save more.
“Water companies can now begin to consult their customers on how to ensure the most vulnerable households receive extra support.”
The average water bill in England and Wales is £376 and 11 per cent of households are spending more than five per cent of their disposable income on their bill.
Environment Secretary Caroline Spelman said:
“Many people on low incomes have been struggling to pay their water bills, and these new measures will give them much-needed help.
“Water companies now have the chance to work with their customers to find a solution that works for them - and I hope to see that solution in place as soon as possible.”
Water companies are also expected to support vulnerable customers with advice on how to use water more efficiently, guidance on whether installing a water meter could save them money and referrals to debt and benefits advice.
Further reforms to the water industry will be proposed by the Government later this summer with the publication of a draft Water Bill.
The Flood and Water Management Act 2010 enables water and sewerage companies in England and Wales to include social tariffs in their charges schemes, reducing charges for households who would otherwise have difficulty in paying their bill in full.