Ofwat, water industry regulator for England and Wales, is calling for strong action by government and others to address the growing problem of bad debt by water customers.
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 says that water debt has grown for a number of reasons, including 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
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.
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