The Consumer Council for Water (CCW) has warned a House of Lords Select Committee that a change in direction by Environment Minister Therese Coffey could result in customers facing the “double whammy of unaffordable bills and an environment starved of vital investment.”

The warning comes in new evidence CCW has submitted to the House of Lords Industry and Regulators Committee current inquiry into the work of Ofwat.

The independent voice for water consumers in England and Wales said its submission of new supplementary evidence was due to a change in one aspect of the affordability briefing material CCW previously provided to the inquiry on 12 August 2022. CCW had highlighted that to remove the postcode lottery of support on water bills and close the gap between those being helped by the current range of water company social tariffs schemes and those still not receiving adequate support, a central funding pot would be required.

In its new evidence dated 9^th January 2023, CCW said that after working with Defra and the Welsh Government on developing options on what the single affordability scheme could look like, “we were delighted” when the then Secretary of State for the Environment Rt Hon George Eustice MP had stated in August 2022 that there would be a consultation on a new affordability scheme to help less well-off households. Defra’s Storm Overflows Discharge Reduction Plan published on 26^th August stated:

“The government will continue to monitor water affordability and take further action if needed, and will consult on a new affordability scheme to help less well-off households.”

According to CCW, a single water affordability scheme in the form of a central pot for England and Wales would use a customer cross-subsidy at a level which would have the potential to completely eradicate water poverty at the 5% level. Roughly 1.5 million households spend more than 5% of their income (after housing costs).

However, CCW is now warning that a change of direction from the new Secretary of State Therese Coffey has ended the prospect of a new scheme funded through a central pot, which could have lifted up to two million households out of water poverty. The consumer watchdog had told the Lords Committee in its earlier evidence that creating a single water affordability scheme would give struggling low-income households the certainty of knowing they can afford their water bill.

CCW says in its new evidence:

“The decision means customers could face the double whammy of unaffordable bills and an environment starved of vital investment.

“Pressing environmental investment, which is expected to be three times current levels, will increase water bills and impact on those struggling to pay, especially in some of the poorer regions.

“Helping people struggling to pay their water bill should be a public policy matter and not be in the gift of private water companies. It’s not fair or sustainable to leave households that cannot afford their water bill facing a postcode lottery when it comes to accessing help.”