Water minister vows to tackle bad debt in the water industry
Water minister Richard Benyon has launched a consultation in a bid to tackle bad debt in the water industry, which cost water suppliers more than £1.6bn last year.
The Department for Environment Food and Rural Affairs (Defra) consultation will look at the financial impact bad debt has on water bills, with the aim of implementing measures to lower bills. This follows on from the Government's Water White Paper, which was released last month (December 8).
Water industry figures show that the level of outstanding revenue from domestic water customers in the UK was more than £1.6bn in 2010-2011, forcing the industry to write-off about £328m of household debt.
According to Mr Benyon, failure by some customers to pay their water bills adds an average of £15 each year to other customers' water bills, which he said the Government is determined to see reduced.
Mr Benyon said: "I want to tackle the problem of bad debt in the water industry as people not paying their bills cost those that do £15 a year. It is just not right that responsible people have to pick up the bills of those who are not paying.
"However, mindful of the burden that regulation may impose, I want to explore whether we can take action through a voluntary approach. We will consider the consultation responses before making a final decision but we must find a way to fill the information gap which is at the heart of this problem."
As a result, the consultation will consider two options, which include the introduction of a regulatory measure which would make landlords liable for the water charges in tenants' properties if they fail to supply water companies with tenants' details. It will also consider a voluntary alternative which would ask landlords and other data holders to share this information with water companies.
In addition, the Government, as part of the Water White Paper, recently announced measures to enable water companies to introduce new social tariffs for people struggling to pay their bills.