I have been asked to reply.
The “Cross-Government Review of Water Affordability Report” was published in December 2004. It concluded that:
(i) that the Vulnerable Group’s Regulations should be extended to increase eligibility, with measures put in place to increase take-up;
(ii) a local scale pilot scheme should be set up to target water affordability assistance to lower income households;
(iii) and that companies, Government and Ofwat should investigate the likely distributional consequences of costs for water consumers and the case for suitable tariff changes.
Work is continuing on these recommendations.
The Vulnerable Groups Regulations are intended to offer targeted protection to customers with particularly low incomes, who have water meters and who use large amounts of water for essential purposes. This includes families with three or more children, and people with specified medical conditions who are on income-related benefits. Following a review and consultation, the criteria for eligibility were amended from 1 April 2005. The criteria now include a more inclusive list of qualifying medical conditions and families with three or more children in full time education under the age of 19. In July, DEFRA held a workshop, attended by water companies and other interested stakeholders, to promote good practice in administrating the tariff.
A pilot study is currently under way in the South West which is looking at the combined impacts of several measures on water affordability, including benefit entitlement checks, meter installation and water efficiency measures. We expect the results of the pilot study in summer 2007.
DEFRA is also working with water companies and Ofwat to look at the distributional impact of tariffs on low income households. We expect the results of this work towards the end of 2006.