Hundreds of thousands of Scottish consumers are in debt to their local Council for unpaid water and sewerage bills - according to a new report today by Citizens Advice
The Sink or Swim report details how Local Authority billing processes are confusing for many consumers, causing them to miss payments for water and sewerage. Many people on low income who are exempt from Council Tax are unaware that they remain liable for at least 75% of their water and sewerage charges. This lack of awareness leads to non-payment, significant debt and hardship – particularly when the Council then pursues the debt, which some Councils do aggressively.
CAS Consumer spokesperson Sarah Beattie-Smith says,
‘Our report today highlights the problems caused to vulnerable consumers by the current system of water and sewerage charges. Because Councils send out water and sewerage bills along with Council Tax bills, many people don’t realise the charges are separate. The legalistic language used on the bills also doesn’t help.
“Many people who are exempt from Council Tax believe they are exempt from water charges as well, which is not the case. They therefore build up arrears, which – like any other debt - they find difficult to pay. We have seen clients who have debts totalling thousands of pounds.
“It is a problem that can be fixed. We are keen to work with the Scottish Government, Local Authorities and Scottish Water to explore ways to help those on low income to pay their water and sewerage charges, and to avoid falling into debt.
“Billing should be clearer, so that people don’t fall into the trap in the first place. Where people have debts for water and sewerage charges, that debt recovery practice should take into account the consumer’s ability to pay, and supports those on low income to recover from debt.
“One of the issues highlighted in our report is of the deductions being made direct from vulnerable consumers’ benefits in certain Local Authority areas, often without notice. It’s not enough to claim that taking direct deductions from benefits automatically helps a person to budget. More needs to be done by Councils to find out what a person can actually afford to pay if they are to support the individuals to achieve a debt-free status.
“While it is right to expect consumers to pay for the services they use, payment should not come at the expense of personal financial security and wellbeing. We are seeing instances of individuals having to approach foodbanks for help because additional deductions from benefits are leaving them unable to pay for essential provisions such as food and energy. That’s just not right, and we need action now to fix this problem.”
Recommendations within the report support the need for additional action to be taken to support society's most vulnerable from falling into debt, and for those in debt to recover.
Notes to editors - click to expand/collapse
- One in five customers in Scotland are in debt for water and sewerage charges. This includes those that have missed payments, have agreed repayment plans with their local authority, etc.
- Consumers in Scotland receive one bill containing two invoices for council tax and water; those in receipt of 100% Council Tax Reduction will only receive a maximum of 25% reduction in water and sewerage charges
- Many people with a 100% reduction for council tax assume that the same discount applies to water, do not pay and subsequently find themselves in debt.
- Once low income consumers fall into debt for their water and sewerage charges, they often struggle to repay the debt on top of their ongoing usage; local authority debt recovery practices for water and sewerage charges only succeed in displacing other debt commitments or the means to purchase essential provisions such as food and fuel.
- Case evidence demonstrates that negative impacts of debt recovery practices are particularly apparent where additional deductions are taken for current water and sewerage charges through the Water Direct scheme.
- Debt recovery should be informed by a person’s circumstances to avoid triggering negative consequences for individuals. Earlier intervention and a debt recovery framework that recognises a person’s ability to pay are more likely to achieve a debt-free status for the debtor.
- Additional services that inform and educate, such as the provision of advice on money or debt management, could help consumers from further indebtedness or protect them from getting into debt in the first place.
- While it is right to expect consumers to pay for the services they use, payment should not take priority over personal financial security and wellbeing, and ultimately, debt recovery practices should aim to help consumers recover from indebtedness.
 ; “Keeping your head above water – A study into household water debt in Scotland”, Consumer Futures, February 2014