A new study by the Consumer Council for Water (CCWater) shows that two thirds of water customers find the price review (PR14) proposals that have been put forward by Ofwat acceptable.

Five hundred interviews were conducted with customers of each water company as part of an industry-wide survey (apart from Dee Valley Water (490) and Sutton & East Surrey (477)).

The survey used two sets of figures - informed and uninformed – which reflected the responses when customers were firstly told of the general impact on bills, followed by more specific information on figures which included the impact of inflation.

In response to an initial ‘uninformed’ question about acceptability (without bill figures) 74 per cent of “uninformed” customers found the PR14 plans acceptable. Acceptability was highest amongst customers of Anglian, Wessex, Affinity Central, Bristol, Portsmouth and Bournemouth; unacceptability was highest for customers of Northumbrian and South West.

Acceptability for the water proposals dipped to 60 per cent in response to a second ‘uninformed’ question which showed the monetary change and did take into account Ofwat’s inflation forecast, to 56%  for the sewerage proposals and 55% for the combined proposals.

Interestingly, responses to an ‘informed’ question which provided year on year figures for average bills across the five years (including inflation) and a showcard with information on the key services to be delivered (maintained or improved) rose – to 67% for water proposals,  64% for the sewerage proposals  and 59% for the combined proposals.

The survey said that most customers are aware that inflation is a normal part of household bills, even if they are initially unsure about the exact level of inflation, and thus their response to the first uninformed question was generally positive. Despite the drop in response caused by the effect of inflation on bills in the second question, respondents tended to become more positive once given a more rounded picture of the services to be maintained or improved, when set against the increase in bills.

Commenting on general customer views on inflation and the cost of living, the survey said:

“Customers are feeling financially squeezed and a significant majority feel their incomes are not keeping up with the cost of living. Customers are feeling financially squeezed; most feel that their incomes are not keeping up with the cost of living (68%) and changes in the cost of living are a concern (66%). Furthermore, just over half (53%) feel that their water bill is already too high.”

The main aims of the research were to find out how acceptable the proposals were to customers and to establish the role of affordability in unacceptability. The research is unique as 500 customers from each water company were surveyed using the same research methodology, allowing comparisons to be made both between companies and with the overall results.

The key findings are:

• Acceptability among customers is quite high when presented with a statement showing the percentage amount bills will change each year on average before inflation.
• This drops markedly when the effect of inflation is introduced.
• Acceptability rises again once customers are given more information about the services they will receive for their money.
• The research also found that customers are feeling financially squeezed and a significant majority feel their incomes are not keeping up with the cost of living.

Click here to download the research study results.