When thinking about ‘poverty’, it’s unlikely the first thing to come into a person’s mind would be water. Instead, you might think about the recent fuel price hike, people queuing at foodbanks, or households facing the prospect of having to choose between heating or eating.
However, water poverty is an all-too-familiar reality for many households.
This guest article by Lia Moutselou from the Consumer Council for Water (CCW), the body representing water consumers in Wales, explores this issue further through the findings of its Independent Affordability Review report. The views are that of the authors, not Senedd Research or the Senedd.
Our research shows that some households cut back on other essentials in order to pay their water bill. Missing meals or rationing water use are just some of the decisions customers are making to stay afloat. That’s despite the fact water supply cannot be cut off for non-payment.
Independent Affordability Review on Water
In October 2020, the Welsh Government – along with Defra in England – asked us to lead an independent review of the current affordability support for financially vulnerable water customers in Wales and England.
As part of the review, we collected and analysed evidence from organisations who find themselves on the frontline helping those in hardship across Wales and England.
We also commissioned a fresh wave of research exploring a range of issues, including the effectiveness of existing support, and the best ways to engage with the most hard to reach customers.
The Independent Affordability Review report was launched in May 2021. It found that despite best efforts by the sector to keep water bills low and to support those in need, customers in Wales and England still considered their bill to be unaffordable.
There’s no single definition of water poverty - the Independent Affordability Review defines it as spending more than 5% of household income on water bills after housing costs.
Our research found that 175,000 Welsh households live in water poverty, but only 35% of those households are receiving the help they need under current arrangements.
The review also highlighted a patchwork of support, variations in funding and eligibility criteria of water company social tariff schemes creates a ‘postcode lottery’ of help. Households facing financial difficulties are receiving significantly different levels of support – or no help at all – depending on where they are.
Assistance schemes are run by Wales’s two water companies - Dŵr Cymru (Welsh Water) and Hafren Dyfrdwy – which help around 7% and 2% of their customers respectively, with support equating to approximately £28m in 2021. These schemes only lift around 61,000 customers fully out of water poverty meaning that the current system is not going far enough.
Finally, the review highlighted other obstacles that can hinder consumers’ access to help. Mental and emotional barriers, including people’s reluctance to confront their financial difficulties, were just a few of the hurdles that stand in the way of support for the hardest to reach customers.
What did the Independent Affordable Review recommend?
A single social tariff
To address water poverty, the review proposed the creation of a single social tariff for Wales and England, which UK and Welsh governments should lead the industry in designing and implementing. This would provide targeted support for those who need it, in a more cost-effective way.
The support offered by the single social tariff would set a minimum level of financial assistance, with water companies having the option to contribute more of their own funding to wider affordability support measures.
Adapting to climate change
From the outset of the review we considered the role of affordability in regards to climate change, affordability of water bills is a key concern when considering the investment needed to adapt to climate change. Providing comprehensive support for those who struggle to pay their water bills can help reduce barriers to investment in climate resilience.
While we recognise that ending water poverty will not solve climate change, there are synergies from taking a joined-up approach to both challenges. Helping customers use water wisely and efficiently as part of affordability support measures will help customers reduce carbon emissions and help address the impacts of climate change.
Clearing the obstacles to proactive support
The review also focussed on households across Wales that are only just managing to pay their water bill. By working together to adopt the report’s wider recommendations, governments and the water sector could ensure these customers get help before they fall into water poverty.
To achieve this we started work with water companies and other experts to develop common descriptions for some support schemes, aiming to improve awareness and end confusion over help available. This also means that people moving to, from and within Wales would have more clarity on what help they can receive.
The pandemic and more frequent extreme weather events have further isolated hard to reach groups. The review highlighted the need for a proactive approach to identifying customers who need support.
Improving data held about customers, and how it can be used and shared would allow water companies to understand individuals’ circumstances better. In turn, this could help identify customers who need financial support, and provide them with advice and assistance at the most important time for them. It’s critical that the most vulnerable in society are supported.
The review calls upon the Welsh and UK governments to support changes to the law that would pave the way for a single social tariff. The Welsh Government has welcomed the independent review recommendations and has committed to working with the UK Government to explore a social tariff that benefits the people of Wales.
The review has also kick-started pilot projects aiming to improve support. Dŵr Cymru (Welsh Water) is increasing the visibility of financial support on bills and envelopes. As different pilots across Wales and England come on stream we’ll assess what’s working well and share best practice across water companies and national borders.
What excites us is the prospect of not just addressing water poverty but also giving households greater peace of mind and one less thing to worry about - at a time when many of us are becoming more aware of the impacts of climate change and craving certainty.
If you would like to find out more please contact Ellen.email@example.com.
Article by Lia Moutselou, Senior Policy Manager Wales, Consumer Council for Water