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UTILITY WEEK | 31ST MARCH - 6TH APRIL 2017 | 25 Customer service & bad debt "If you know the exact location of bad debtors, you can start to analyse property risk factors in the same way that credit risk is done against the account holder." C an location data help tackle the multi-billion pound bad debt problem? For years, utility companies have reported losing millions of pounds through non-payment of bills. Latest figures from Ofgem, Ofwat and the Consumer Council for Water reveal that the cost of this debt in the UK is now over £2 billion. The problem doesn't seem to be improving, but location data has the potential to help utility companies tackle it. Accurate and up-to-date location data is helping to build a "digital twin" of Great Britain. Within the digital twin you can start to integrate other information about demographics, property type, economics and other local factors that could be important to customer management. By adding the spatial element to what you already know about your bad debtors, you can start to analyse patterns and identify correlating con- tributing factors. A customer address is more use- ful when given an X-Y co-ordinate, or a geospatial location. This could help identify locations where risk may be building – such as areas where coun- cil tax is going up, and where there are challenges to the health of the local economy such as reductions in employment opportunities. Location data can also help identify areas of deprivation. If you know the exact location of bad debtors, you can start to analyse property risk factors in the same way that credit risk is done against the account holder. For example, you could see if there are trends linked to housing stock. Detailed property-level data can tell you a property's type, size, age and construction materials. These may be predictors of energy use that, when coupled with other data, may be pre- dictors of bad debt risk. Then you could start targeted meas- ures, perhaps sending field staff out to read meters in the areas where the risk of bad debt increasing is higher (and with location data you can optimise your route plan to send them out). Or you could look at treating the problem not the symptoms. For exam- ple, you could install a smart meter to help highlight energy use within the household, or insulate the property to increase energy efficiency. Internal data on bad debt and accu- rate addressing will help customer onboarding. And when changing utili- ties, not only can you check credit his- tory on a person, but you can see if the premises they're moving into may be in an "at-risk" area for bad debts. The information is at address level and it does not identify individuals, so privacy and data security aren't compromised. For many decades Ordnance Survey has been providing detailed location data and services to utilities to help manage assets, customers and other stakeholders. As a government organi- sation our data underpins significant levels of economic activity across mul- tiple sectors. To find out how location data can help improve your business, contact commercialenquiries@os.uk Expert view Ben Nduva, Head of energy and infrastructure, Ordnance Survey IN NUMBERS 10% The amount of income a household must spend on all fuel use and to heat its home to be considered fuel poor. £640m Bad debt across energy utilities rose from £400 million in 2011 to £640 million in 2015. £379m Bad debt for UK water firms rose from £263 million to £379 million in 2015. 63% of UK adults have experienced debt recovery procedures. 16% have paid late because a bill was higher than expected. 430,000 Data from the RFI suggests that between two and three times as many customers are allowed to switch with a debt (typically 430,000 a year) than are prevented through debt objection (typically 170,000 a year). £418 The average debt of customers who are prevented from switching rose from £268 in 2013 to £418 in 2015. One in five households across England and Wales now say that they feel their bills are unaffordable. 4% According to Ofwat, water sector bad debt has risen by four per cent in four years. £21 a year This effectively adds "a hypothetical £21 a year" to the bills of customers in England and Wales.