As households struggle to afford their water bills, social tariffs have a crucial role to play in ensuring that water is affordable for everyone who needs it. While social tariffs are in place already, their design and eligibility is largely left to companies to decide – resulting in worrying postcode lotteries and poor targeting. This briefing lays out some options for unified social tariff design.
KEY POINTS
- Social tariffs help 1.6 million households to afford their water bills, but inconsistent design means support is highly varied across the country.
- Affordability challenges around water bills are still acute and are likely to remain so over the next price review period.
- Social tariffs are also poorly targeted with some households not receiving sufficient support, and many thousand potentially eligible customers not even receiving social tariffs
- Introducing a single social tariff, where the level of support is consistent across all companies would eliminate this postcode lottery
- Options for a social tariff include:
- A ‘bill cap’
- Set percentage discounts depending on income
- A fixed percentage discount across the board
- A lower unit price for water.
- However, whichever option chosen will rely on households having a water meter installed and need greater data sharing between government departments and water companies, for better targeting.
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