Water suppliers and Ofwat should unite to ensure support reaches vulnerable customers

Energy supply has been a permanent fixture in the news over the last few months. With the cost of energy having soared and the cost-of-living crisis still unfolding, headlines relating to Government price caps and prepayment meters are not going away any time soon. At this time, it’s surprising we haven’t seen the same media hubbub about what another key utility – the water industry – is doing to support vulnerable customers.

Forms, frustration and postcode lotteries

Although it’s true that a lot of support schemes exist within the water industry, they’re incredibly fragmented. When customers look for help – depending on who their supplier is – many of them will be presented with a range of options. They will need to identify which is the best fit for them, and then spend significant time completing various application forms.

If they have separate suppliers for water and wastewater, they will need to complete the process again. Of course, if they ever move and need to change water supplier, they’re back to square one. The system is such a patchwork that you get different levels of support depending on where you live, and suppliers set their own eligibility criteria dictating who can apply for help.

Injecting some fresh energy

So how can this complex web be untangled to make it easier and guarantee help gets through to those who need it? It’s not for want of trying – for instance, Ofwat has requested the submission of plans to address the cost-of-living crisis, and its current guidance also points to The Consumer Council for Water’s recent proposals that a single social tariff may be considered. The issue is that a resolution is needed now – the patchwork of different regional support schemes is not actually addressing the cost-of-living crisis in the here and now.

It doesn’t need to be this way; one only has to look across to the energy industry to see what’s possible. The energy price cap and cost-of-living support payments are both being implemented using existing systems, without the need for customers to go through convoluted and confusing application processes. In fact, in most cases, consumers have just had discounts and credits automatically applied without having to do anything at all.

Charting a path through choppy waters

What needs to happen – and fast – is a change of approach, premised on maximising data and joining the dots.

A big catalyst for this change is already in place – Ofwat’s £200 million Innovation Fund, launched in 2021, was created to drive collaborative innovation across the industry. As a case in point, Sagacity is working with Southern Water and a consortium of industry experts on Water4All. This initiative brings together a range of industry experts to create a data-driven solution enabling water suppliers to proactively offer help to customers who are struggling, rather than leaving them to suffer in silence without claiming support.

Water4All has analysed Southern Water customer data to further understand the extent of the challenge facing financially vulnerable customers. We have already uncovered a huge problem: more than a fifth of pensioners who are in severe financial difficulty are not claiming the benefits they are eligible for. These pensioners are just one of many groups of people who are suffering in silence when help is available to them – and this needs to change urgently.

Now we want to take the next step and look to solve the problem, bringing together customer and consumption data from different suppliers for the first time. If our application to Ofwat for funding to build out the full solution is successful, we’ll get to work with the consortium. The finished product will cleanse and process data, then combine it with affordability, financial, fraud and benefits data to verify details and identify signs of financial vulnerability. Those customers who appear financially vulnerable will then be targeted and offered personalised help and support, tailored to their circumstances and specific needs.

A unified approach

The answer, then, is not about systems or technology – there is no technological barrier to supporting customers via multiple data sources. But there are clearly a number of hurdles to overcome including policy, regulation and data protection – and fundamentally, we need organisations across the industry to work together to clear them all.

The industry should look to the success of energy and other sectors, which have delivered support to people struggling in a timely manner, and largely eliminated the need for people to ask for help in the first place. Increasing numbers of households are feeling the strain as the cost-of-living crisis deepens, so we need to make this fundamental shift now. Policy makers, regulators and suppliers need to work together to resign the industry’s existing patchwork of support to the history books, making sure no matter where people live, they are properly supported by their water supplier when they need help.

When it comes to water industry support, a watered-down service won’t do.

- Martin Baggs, Non-Executive Director, Sagacity

FIND OUT MORE ABOUT WATER4ALL