Utility Week

16 | 13TH - 19TH MARCH 2020 | UTILITY WEEK Operations & Assets Event Utility Week Consumer Debt Conference, 27 February, Birmingham Time to help the vulnerable There were some thought-provoking debates at Utility Week's Consumer Debt Conference, sponsored by Engage Hub. Chair, Denise Chevin, picks out her five takeaways. Andrew White, senior policy manager at the Consumer Council, urged utility firms to help their customers deal with debt in a more holistic way. He said they should have arrangements with debt advice agencies in order for them to look at the full picture of the customer and help them in all areas. "This creates a more sustainable position going forward, which benefits all utilities, and the customer," he said. They also need to be more approachable, added White. "About a quarter of water cus- tomers say they wouldn't contact their water company if they were struggling to pay their bill. So, we need companies to reframe the relationship with their customers, to be seen as someone who can offer help." Wilkinson said Northumbrian Water was taking this approach: "We've seen a change in visits – we used to do lots of debt recov- ery visits, now we go out and talk to people about how we can help them." He said Northumbrian had funded a social tariff scheme itself, which has been operating successfully for five years: "We're generally having to work hard with payment arrangements because people's budgets are so tight. We're still having lots of repeat conversations, lots of renegotiations of pay- ments, payment holidays and those sorts of things. "What's changed is we used to have to chase people to talk to them about why they missed a payment. Now if we've got someone on a payment arrangement that's a massive difference to us, because we're not spending all that extra money chasing someone who hasn't paid." Wilkinson added: "We've also seen a real change in court activity. The court claim itself is becoming less effective. You only go to court if you're absolutely sure the cus- tomer can afford to pay. So those numbers are trending downwards, but the collection rates are trending up. That's a pattern we've seen over the past five or six years." Utility firms, however, need to better pro- mote the help they can offer. White remarked of water companies: "They're doing lots of good work, they've got lots of schemes to offer, but customers are not aware of them. Our research suggests only about 5 per cent of customers across England and Wales are aware of the social tariff schemes." Talking point 1. The gig economy and universal credit are driving up debt Austerity, the introduction of universal credit, the gig economy and gambling are all adding to lack of affordability in households and making it harder for people to pay their bills, speakers at speakers at Utility Week Consumer Debt Conference said. Opening speaker, Mark Wilkinson, head of income at Northumbrian Water, picked out key statistics from the recent Joseph Rowntree Foundation UK Poverty 2019/20 report, which showed that one in five – 14 million people – in the UK are living in poverty. In-work poverty is also growing. Around 56 per cent of people in poverty are in a working family, compared with 39 per cent 20 years ago, he told delegates at the event at the National Conference Centre in Birmingham. Northumbrian's Mark Wilkinson also drew on analysis by debt charity Step- Change, whose yearbook of information about its clients and their debts shows that in the past two years electricity arrears have started to grow (see graph, p18). "We're having more conversations with custom- ers about struggling to pay bills. That's one of the very first conversations we have," said Wilkinson. "Citizens Advice released a report which said 38 per cent of its clients present with a negative budget." Chris Thewlis, chief operating officer of Npower (soon to be absorbed into its new parent company, Eon), also pointed to sober- ing statistics from Citizens Advice: "8.3 mil- lion people across the UK are recognised as being in debt and 22 per cent of adults have less than £100 in savings, which makes them vulnerable to changes. If you're on a zero-hours contract and you have less than £100, that's going to be a problem. "We've definitely seen a problem with universal credit," he added. "Going from weekly to monthly benefits payments is a big hump in the road. The original levels of uni- versal credit have dropped, so even if you are receiving it you can still be in quite difficult circumstances. It's definitely had an impact on us." Thewlis continued: "The other issue is betting, which is everywhere. So, there's definitely a move into a more difficult situation, and poverty hasn't necessarily changed, but affordability has become a really big issue." The situation is unlikely to improve any time soon, according to Deven Ghelani, director and founder of Policy in Practice, who said austerity had meant benefits had fallen by 6 per cent since 2013 and house- holds are on average £40 a week worse off. The "two-child limit" means larger families will struggle as £4.4 billion in further cuts bite and Brexit will hit low-income house- holds hardest. Dennis Berg, senior manager, consumer policy at Ofgem, said about 1.3 million elec- tricity accounts are in debt, and about 1 mil- lion in gas. "We'll keep pushing suppliers to make sure they have good debt management in place , and introduce stricter rules probably to try and drive that improvement," he said. Talking point 2. Utilities need to think about debt and payment more holistically

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