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'Water poverty' set to increase

By Bob Howard
BBC Radio 4's Money Box

Ofwat logo (credit: Ofwat website)
Ofwat says water meters could be a solution to help cut costs

The number of people in "water poverty" will rise, says the water consumer watchdog for England and Wales.

The Consumer Council for Water uses the term for people whose water bills cost more than 3% of their income after tax.

It estimates a third of people living in the South West will fit this criteria by 2010.

Water bills in England and Wales will rise by an average of 5.8% from 1 April, but in Scotland increases have been capped below inflation.

Yve Buckland, national chair for the Consumer Council for Water, says the government must do more and should look at targeting benefits at those most in need:

"What we are worried about is, one by one, poorer families falling into this poverty trap around their water bill."

The challenge is for companies to think of innovative new tariffs and ways to help their customers
Regina Finn, chief executive, Ofwat

People in the South West are likely to be especially hard hit by this year's price increases, as they already have the highest average bills in the country.

Bob Doy is a pensioner living in Exmouth with his wife and daughter.

The latest increase means his bill has risen by 54% since 2004:

"Four years ago our bill was 339, last year it was 534 - our costs are going up and up and our incomes aren't."

There is no equivalent of the "winter fuel payment" for people struggling to pay their water bills.

Where to get assistance

Some help is available, but it is strictly limited.

People on some benefits living in England and Wales can apply for "WaterSure."

Under this scheme, their water bill is capped at the average rate for the area.

But it is only available to people with three children of school age, or for those who have a medical condition which requires them to use large amounts of water.

Some companies also offer help.

It is better to address the issue by bearing down on the costs rather than creating new benefits
Phil Woolas, Environment Minister

Wessex Water has introduced a special low tariff to reduce bills for customers struggling to pay, but customers must be in receipt of benefits and have been referred by a debt advice agency.

And South West Water offers a scheme called WaterCare, which offers free help in saving water for people behind with their bills alongside advice with claiming benefits.

Future measures

Regina Finn, chief executive of the water regulator Ofwat, thinks water companies could do more:

"The challenge is for companies to think of innovative new tariffs and ways to help their customers, including encouraging them to take up a free meter."

The government is conducting a study into how people should pay for the water they use in the future.

That is likely to include the wider introduction of water meters to allow companies to charge different tariffs.

In the meantime, Environment Minister Phil Woolas says there is help available to people struggling to pay their bills:

"We have worked with the water companies and Ofwat to put into place a number of short term measures to ensure there is help, either by budgeting or by benefits checks.

"I think it is better to address the issue by bearing down on the costs rather than creating new benefits."

BBC Radio 4's Money Box was broadcast on Saturday,
29 March 2008 at 1204 GMT.

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