Do more on debt, Ofwat tells companies

Ofwat last week told water companies to do more to help customers in debt, or at risk of being in debt, to pay their bills. In particular it recommended they:

  • send out bills more frequently

  • encourage customers to pay in bite-size instalments

  • know who is moving in and out of properties

  • understand what will help different types of customers to pay

  • make sure customers who are eligible for help receive it

  • provide “real consequences” for won’t pays.

The recommendations followed an industry event on Thursday on dealing with bad debt, at which the regulator launched a report commissioned from PwC, Retail services efficiency benchmarking.

Ofwat found:

  • Water companies have improved their performance on bad debt in recent years but they are consistently out-performed by other sectors – even the best performing water companies.

  • Bad debt is worse in areas of high deprivation, but some companies do better at managing bad debt even though they have significant deprivation.

  • Water companies could be doing much more to enable customers in debt, or at risk of being in debt, to pay their bills because they do not all use best practice in debt management.