Firms told to act on vulnerability and affordability ahead of April price rises

Ahead of inflation-driven water bill rises in April, Ofwat has issued new guidance setting out minimum standards for water companies to ensure vulnerable customers are well looked after.

The standards cover service provision, support and inclusivity, and expect firms to identify customers who need extra help, to record their needs and to implement vulnerability strategies.

Alongside the guidance, Ofwat published its latest affordability research findings. The Cost of living report found half of bill payers have struggled fairly frequently over the last year with household bills, rising to 65% for those with a long term health condition. Awareness of the help available remained low.

Lynn Parker, senior director for casework, customers and enforcement, said: “With customer bills likely to rise, it is vital that companies redouble their efforts to improve the service they offer, especially to those who are most vulnerable… If they do not do so, we will take action and hold them to account.”

The regulator will introduce a new customer-focused licence condition in early 2024, and said it will take companies’ consideration of the new vulnerability guidance into account when assessing compliance with the condition.

CCW data showed water companies in England and Wales provided support to more than 1.3m households through their social tariff schemes in 2022-23 – up 19 per cent. Recipients got an average discount of £151. In addition, more than 220,000 people saw their bills capped through the WaterSure scheme, producing an average saving of £307 a year. However, CCW said 2m customers may not be getting the help they are entitled to due to low awareness and other barriers.

Chief executive and co-founder of data specialist Sagacity, Anita Dougall, commented: “Ofwat’s new rules are a welcome change that shifts the onus onto suppliers to find vulnerable customers, rather than waiting for them to come forward. People are not always forthcoming when it comes to asking for help, so it’s important that those who need support are proactively approached…For example, our research found that only 6% of UK billpayers have considered asking their supplier for help when struggling to pay their utilities bills.

“However, the task is complex. Water companies have millions of customer records, so establishing who is occupying a property presents a huge challenge. This is especially true for rentals, which are more likely to house vulnerable people. Even where systems are in place for flagging accounts, people’s situations are fluid – today's stable customer might face hardship tomorrow.”

Dougall advised suppliers to tackle data quality as a priority. She recommended: “Firstly, cleaning up any ‘dirty data’ and ensure they have all the correct details for their customers. Next, they going beyond their own books to enrich their data using third party capabilities – for example, cross checking electoral records, or even bank or phone account registrations. It’s no mean feat and it will take time – and the clock is ticking, with the new rules set to come into force in early 2024, so water companies need to act now.”