Public anger grows over proposed seasonal water tariffs, as utility companies look for ways to save the UK's supply
The race to provide Britain with a sustainable water supply is already generating the first of what is likely to be a long list of controversies.
As the UK basks in temperatures that put Athens in the shade and with rivers already running low, utility companies are under increasing pressure to preserve water. But the most comprehensive study of its kind suggests the leading option for ensuring the UK enjoys a sustainable water supply ? metering ? is hitting the poorest hardest and is viewed with suspicion by consumers who believe it is a ruse by utility companies to increase their profits. The study by Wessex Water, which supplies water to more than one million households in the west country, found the introduction of meters reduced customer demand by 17%, higher than previous estimates.
The reduction was even greater if the meters were tied to a tariff system that saw the price of water rise in the summer, an increasingly popular option being considered by the utility companies, but one which has caused widespread anger among consumers.
The Wessex study, the largest since metering was introduced 20 years ago, found 15% of customers saw their annual bills rise by more than �100 after flat-rate metered systems were installed. A quarter of the poorest customers saw their bills increase by more than �50. Phil Wickens, tariffs manager at Wessex Water, acknowledged his company had one of the highest water rates in the UK, but said that it was vital the industry introduced a new charging system if the UK was to have a sustainable supply.
"We want a charging system that gives us the ability to meet future challenges in the long term," Wickens said. "Climate change and population growth are going to place pressure on the need for increased investment. In order for us to secure that investment we really need all of our customers to be willing and able to pay their bills. There is a commercial incentive for raising these issues now."
Household water bills have increased by more than 50% in real terms since 1989, partly due to investment costs. But the financial burden on customers is becoming a key issue, with an increasing number refusing to pay their bills. Wessex estimates its underlying bad debt has doubled over the past decade, with the figure expected to rise further given economic conditions.
It is estimated that the average customer now pays an extra �12 a year to cover unpaid water bills. Experts suggest establishing a fair charging system is vital if more schemes, such as the new �270m Thames Water desalination plant that filters salt from water in the Thames estuary, are to get the go-ahead. A failure to address water sustainability could have serious repercussions for the UK. The current spell of hot weather has already triggered warnings that farmers in some regions will have to limit their use of water. Several rivers in England and Wales are reportedly at "exceptionally low" levels, raising fears there will be a need for hosepipe bans. The Environment Agency said two months of unusually dry weather has left 11 rivers at extremely low levels of the kind seen only once every 20 years.
The government is currently consulting on water sustainability, and environment minister Caroline Spelman is reportedly in favour of metering as a key part of its response. All new homes built since 1989 have had to be fitted with water meters, and an increasing number of people opt for them. Just under half of all UK customers now have a water meter, and it is predicted that all households will have one fitted in the future.
But the shift to metering has prompted concern among charities. The Fairness on Tap (FoT) coalition ? made up of 12 leading environmental organisations, including the WWF and the National Trust ? is calling for a national switch to water metering. The coalition claims the current system of water charging is outdated, unfair and encourages wastage, with many households paying a flat "all you can use" charge, giving them no incentive to be water-efficient. However, the previous charging system, with water bills linked to the rateable values of homes, protected the poorest in society from excessively high bills.
"The industry has been moving from a system based on rateable values that were set as part of local authority charging back in the late 80s," Wickens said. "Lower income customers were paying less than higher income customers, but as we are gradually moving towards metered charging that social protection is winding out." Creating a fairer charging system has seen some water companies experiment with higher charges in the summer. The option, being tested in more than 1,000 homes by Wessex, has resulted in a "step change" in consumer behaviour, says the company. Wickens said: "Higher income customers with bigger gardens end up paying a fairer chunk than lower income customers."
The new form of charging is likely to trigger animosity among households in the "squeezed middle", who may fear they will be hit disproportionately. However, the Wessex study found almost all customers opposed to seasonal tariffs.
"Customers are cynical about companies changing the way they are charged; they assume it's about making money, like travel companies charging more on holidays, but in our case it isn't," Wickens said. "Even if we had a dry summer and generated more income, the regulator takes that money off us."
Source: http://www.guardian.co.uk/environment/2011/apr/24/seasonal-water-metering-con-study
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