Water poverty – the hidden issue
Did you know that around 3 million households are unable to pay their water bills? Or that a whopping 1 in 8 households think their bills are unaffordable? Known as being in ‘water poverty,’ the term to covers those who simply cannot afford the cost of their water services.
While many of us may have heard the term fuel poverty, water poverty is actually a bigger issue, with half a million more households effected compared to those who struggle to pay their heating bills. This is because under UK law, Water Companies are not allowed to switch off the water supply to domestic residences. Debt can therefore continue to rack up, with Water Companies able to take all the usual enforcement actions leading to further stress and additional costs.
In the UK, water bills average out at £415 a year, or £34.58 a month. Water companies charge in two different ways:
- Unmetered bills are calculated on a fixed charge and an additional charge decided upon by your home’s ‘rateable’ value. Your home’s rateable value is worked out based on how much your local authority deemed the rental value of your home to be in 1990.
- Metered bills are calculated by a fixed charge and an additional charge based upon the amount of water you actually use.
So, if you are on an unmetered supply you could be charged for more water than you actually use.
Those who have read the CIPHE’s manifesto will have noted the recommendation to ‘Tackle issues associated with poverty at source. Promote schemes to help the water poor, increase water efficiency in domestic properties and help the public cut down on water waste.’
The good news is that Ofwat - The economic regulator of the water sector in England and Wales – has announced massive investment programme to transform the water sector.
The body has revealed a spending package of £51bn for the next five years. A quarter of this, (around £13bn), will be dedicated to providing resilient services and a better environment in the face of a growing population and climate change.
Customers will also see a reduction in average bills of around £50 before inflation. The regulator has secured this by demanding greater efficiency from the Water Companies, passing through lower financing costs and promoting more innovation.
Ofwat has set new levels of service so water companies transform their performance over the next five years. These include:
- Cutting leakage by 16% – saving enough water to meet the needs of everyone in Birmingham, Bristol, Cardiff, Leeds, Liverpool and Sheffield.
- Identifying and helping an additional two million customers who need extra support.
- Investing over £1 billion to protect communities at risk of flooding.
- Reducing pollution into rivers and streams by almost a third.
- Preparing for drier weather by providing £450 million to explore new water resources such as reservoirs or moving water from where there is lots to places with less.
- The £13bn of additional investment – equivalent to £6m every day for five years – will, among other things, see a new reservoir built in Hampshire and the construction of a pipeline connecting water supplies from North Lincolnshire to Essex.
- Allowing Thames Water to bid for up to an additional £480m to deliver improved service resilience. To access this, they will need to pass a series of tests and Thames’ investors will also need to provide substantial additional funding.
If you are falling into water poverty and need help paying your water bills there are several steps you can take.
- Talk to your Water Company and explain you are having trouble paying your bills. They have schemes in place to help financially vulnerable customers, with almost 700,000 receiving reductions on their water bills in 2019.
- If you are on a metered supply, you can cut water wastage to help lower your bills.
- If you are on an unmetered supply you can switch to a metered supply or appeal if you think your rateable value is too high.
- If you swap to a metered supply and your bills go up, you can ask to swap back to an unmetered supply within the first 12 months.