SUPERVIVENCIA SEGÚN LA DENSIDAD DE MICROVASOS

11.4.1 The assistance available in water contrasts with the help given to fuel customers, some of which is funded by government (i.e. the taxpayer) and some through supplier obligations, which are passed onto energy customers through their bills. In energy this includes grants and supplier investment in heating and energy efficiency measures for priority households (such as Warm Front, the Carbon Emissions Reduction Target and the Home Energy Efficiency Scheme in Wales) and direct payments when there are spells of particularly cold weather. he esult of s y fficult ability er bills s and ncome from search found e was These a low but a these icting likely more s with differs need ncing on to elp to given r help t they ue of value vel of t time

11.6.2 11.6.3 11.6.4

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benefits and programmes to tackle fuel poverty. In 2008 the Government negotiated a voluntary agreement with energy suppliers under which they agreed to offer assistance through social programmes to vulnerable customers. The combined spending by suppliers will be at least £100m in 2008/09, £125m in 2009/10 and £150m in 2010/11. The government has decided to build on the success of these programmes by introducing legislation to mandate a system of social price support when the voluntary agreement comes to an end in 2011. As part of this new statutory framework, the government will ensure there is an increase in resources available and give suppliers greater guidance and direction on the types of households eligible for future support, and how that support should be offered. The government hopes to announce the size of the final package around the time that primary legislation is introduced and is hoping to include this as part of the fifth session Energy Bill. 11.4.2 In telecommunications, BT and KCom apply special tariffs to certain groups of customers,

and the government is intending to subsidise the availability of some new services in areas

not attractive for commercial investment. The Digital Britain White Paper58 _{has set out the}

government’s intention to introduce a £6 per annum supplement on fixed lines for most households and businesses, to fund greater availability of next-generation broadband.

What Help Should be Provided?

11.5.1 As discussed in Chapter 4, it is essential that incentives in the system as a whole are designed to minimise the total costs of providing water and sewerage services so that all customers receive the lowest bills possible. This will do more than anything else to help with affordability for those on low incomes.

11.5.2 However, the review team considers that there are certain adjustments that should be made to the system now, aimed at helping customers who are struggling to pay their current water bills. These changes should continue into the future, anticipating much higher levels of metering. Given that either the taxpayer or the water customer will have to pay for this, help will inevitably be constrained and needs to be very carefully targeted to ensure bills remain reasonable. 11.5.3 The review team believes that responsibility should primarily rest with government to tackle

the underlying problems of general poverty and to mandate any new schemes involving cross-subsidies between customers. However, Ofwat and the water companies are best positioned to understand who needs help in any particular area and they should play a significant role in providing and targeting assistance.

Responses to the Interim Report

11.6.1 The interim report proposed two approaches to providing help. The first was a regional benefit to reflect higher water prices in some areas of the country. Responses to the interim report showed strong support for this. However, the Department for Work and Pensions (DWP) has been clear that there is not a basket of goods which informs benefit levels, but instead, rates of means-tested benefits are intended to cover all normal day-to-day living expenses. DWP is also strongly opposed to introducing new benefits into an already complex benefits system. With the exception of Housing Benefit, benefits paid in different regions are not differentiated to take into account regional variations in prices of goods and services. DWP is committed to simplifying the benefits system, and, they argue, additional regional benefits would only add to its existing complexity.

11.6.2 The wider policy objectives surrounding the design of the benefits system as a whole are clearly important. However, set against that is the clear possibility that because of regional variations in costs for essentials, the benefits system will create significant regional inequalities. If alternatives are then needed to address these inequalities, the costs of these other measures should also be taken into account. Within this wider framework, the review team believes that regional benefits to address significant differences in the cost of essentials – in this case water – would have the advantage of addressing the root cause of the problem. However, the review team recognises that the introduction of a regional benefit to address the variation in water prices does not look feasible at present. But this recognition does not make the problem go away, and it will need to be addressed by other means, described below. As the South West Water region remains the outlier for high prices, potential solutions to the particular issues of the South West are discussed in Chapter 14.

11.6.3 The second proposal for payment was a cross-subsidy between water customers nationally, to provide a package of help for certain groups of low-income customers. The package was designed to give more help to those in higher cost areas. However, responses were clear that it would be unacceptable for low income customers in low cost areas to subsidise low- income customers in high cost areas. The review team has recognised the strength of feeling on this point.

11.6.4 The following paragraphs explore a potential package of help and then look at who should pay for it.