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CCW calls for a single social tariff as 40% say 2025-30 bills will be hard to afford

by Karma Loveday

The Consumer Council for Water (CCW) reiterated its urgent call for a single social tariff to be introduced as it revealed the findings of its affordability and acceptability research about Ofwat’s PR24 draft decisions. This found acceptability to be strong but affordability to be severely stretched.


The survey of 9,500 households gauged views on the prospective average bill rise of 21% before inflation, to fund £88bn of investment in improving services and the environment.


40% of households across England and Wales (48% in Wales) said they would find the hike difficult to afford – more than double the 18% who said they have difficulty paying their current bill. 54% of those who would find it difficult said they would cut back on non-essentials to pay the higher prices; 43% said they would use less water; and 38% would cut back on food shopping and other essentials.


Customers were broadly supportive of the planned spending. 75% found the overall investment package to be acceptable. There was considerable variation between companies though, with 81% of Severn Trent bill payers endorsing its draft determination, compared to 65% of Southern Water households at the other end of the spectrum.


CCW added that overall acceptability of the investment plans shrank to 58% when customers were reminded of the higher associated price tag.


Mike Keil, CCW chief executive, said: “These bill increases would put an intolerable strain on the finances of millions of households and only a single social tariff can provide the safety net that is needed to ensure water is affordable for everyone.”


CCW conducted separate research among non-household customers – deep dive interviews with 25 small to medium sized operations. Overall the draft determinations were well received; companies saw it as positive that wholesalers are investing, especially in proactive changes which will have positive knock-on effects, such as fixing leakage and replacing pipes.


Businesses which are more financially stable had more tolerance towards the proposed bill increases. Those who are less stable expressed concern. Regardless of financial status, increases higher than 50% were negatively received because of a feeling that the customer is being punished for the wholesalers' mistakes.

 

The lack of targets around measures which can help businesses be more sustainable (and help them be held accountable to their sustainability goals) was considered to be a gap in the draft determinations. The research found that businesses want to feel as if they are doing all they can to be more green and ultimately save money if possible.

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