Welsh Water Social Tariff Research Quantitative Findings Accent is registered to the market, opinion and social research International Standard ISO 20252 March 2014 Accent 2014 Rachel Risely Tel +44 (0)20 8742 2211 [email protected] AGENDA Research background including qualitative summary refresher Methodology & sample Customer views on current charges Acceptability of the Social Tariff Summary of quantitative results slide 2
Research Background & Qualitative Summary Refresher slide 3 Research Objectives Overarching objective is to assess customer attitudes to the introduction of Social Tariffs and willingness to pay for them Understand the degree of support for a Social Tariff Assess response to idea of cross subsidies Explore design of Social Tariff Assess levels of willingness to pay Core quantitative objective: to measure support and willingness to pay for proposed Social Tariff slide 4 Qualitative Summary
Low awareness or consideration of existing cross subsidies in the water industry or other service sectors Spectrum of support for DCWW cross subsidy Strong supporters and strong opposors are in the minority Majority demonstrate a high degree of conflict and present as persuadable Commitment to support or oppose the cross subsidy are based on 4 core factors Potential gain or loss Personal economics Social perspective Knowledge and understanding of DCWW Issues are related to the principle, practical and personal This is Welsh Government territory Not even DCWW responsibility so definitely not mine Concerns over controls based on potential recipients e.g. time of qualification, usage
restrictions Concerns over accurate identification of recipients Need for costs to be managed carefully and not spiral Impact on personal financial situation Figures presented were surprising and added to increased support Amount of proposed increase was lower than anticipated Amount of bill reduction was higher 20-25% feels like a good reduction 6-12 a year acceptable for supporters slide 5 Summary Half agreed that their current water and sewerage bill charges are affordable although this was lower among SEG DE (25% disagree compared with 15% overall) and those on benefits (23% disagree compared with 10% of those not on benefits)
Following information, 82% felt it acceptable for DCWW to introduce a new scheme to help customers genuinely struggling to pay Acceptance of the scheme remained high (81%) when the banded scheme was explained Part-funding of the scheme by DCWW and an acceptance of water efficiency measures by participants are crucial 75% of customers accept the introduction of the proposed social tariff at an additional charge of 15 pa slide 6 Methodology & Sample
slide 7 Research Methodology Integrated research programme combining qualitative and quantitative methodologies Inception workshop PrePlacement Exercise Qualitative: Deliberative groups Quantitative: Measurement and financials This debrief will focus on results from the quantitative element of slide 8
this project Research Sample 400 CATI interviews and 40 face-to-face interviews with Welsh Water customers responsible for paying the water bill SEG AGE AB C1 C2 DE 18 34 12 19
16 12 35 49 33 19 25 30 50 64 30 29 22 35
65 74 36 12 21 23 75+ 18 12 13 23 Table shows actual numbers of respondents by age and SEG CATI average interview length: 24 minutes
Research was conducted by Accents Telephone Unit in Edinburgh Pilot: 45 interviews (14th 16th January 2014) slide 9 Main stage: 355 interviews (17th 27th January 2014) Classification Questions 41% of all respondents receive some kind of benefit. 51% of all respondents have an annual household income of less than 24,000 42% of all respondents have a long-term illness,
disability or infirmity. Of those, 84% said it limits their activities in some way. 28% of all respondents had children in their households (aged under 16). Customer Views on Current Charges slide 11 VFM perceptions Two thirds feel water bill represents good value for money Those aged 75+ and metered customers were
significantly more likely to feel it was very good value for money. Q10: How do you rate the service you receive form Welsh Water in terms of value for money? Please respond on a scale of 1 to 5 where 1 represents very poor value for money and 5 represents very good value for money. Base: All respondents (n=440) slide 12 Half agree their current water and sewerage bill charges are affordable Metered customers were significantly more likely than those without meters to strongly agree. Those on benefits were significantly more likely to disagree
Q17: On the following scale, how much do you agree or disagree that your water and sewerage/water/ sewerage (AS APPROPRIATE) charges are affordable to you? Base: All respondents (n=440) slide 13 Nearly two thirds rated their water bill better value for money compared to their electricity and gas bill and council tax Q18: How much do you agree or disagree with the following statements My water and sewerage bill is better value than my electricity and gas bill My water and sewerage bill is better value than my council tax My water and sewerage bill is better value than my telephone and/or broadband bill Base: All respondents (n=440) slide 14 16% were aware of any schemes that Welsh Water offers to help their customers Spontaneous Awareness Payment Plans
Of those who were aware of any schemes, one third spontaneously mentioned Payment Plans 32 Weekly Direct Debits 19 Welsh Water Assist Of those who were not aware of any schemes, the majority, 75%, had not heard of any when prompted. 15% were aware of Payment Plans and 14% Weekly Direct Debits when prompted 18
Water Direct 3 Customer Assistance Fund 3 Other 54 0 10 20 30 40 50
60 70 80 90 100 % Respondents Q20: What schemes are you aware of that Welsh Water already have to help people pay their bill? (SPONTANEOUS) Base: All respondents aware of schemes offered by Welsh Water to help customers pay their water/sewerage bills (n=72) slide 15 Acceptability of the Social Tariff slide 16 Three quarters found a reduced tariff for customers on low incomes acceptable
C1C2s were significantly more likely to say dont mind than DEs. Customers on the lowest incomes were significantly more likely than those on middling incomes to find it perfectly acceptable. slide 17 Base: All respondents (n=440) Respondents were shown background information on DCWW 45% were aware that DCWW has no shareholders and uses its profits to improve services
to customers and keeps bills as low as possible Following further information, 82% felt it was acceptable for DCWW to consider introducing a new scheme to help customers who are genuinely struggling to pay X Base: All respondents (n=440) slide 18 13% are aware of other schemes in other areas of life where some customers pay more than those on lowest incomes Whether the DCWW scheme would be similar to Base: All respondents (n=440) slide 19
One third felt that the 160,000 DCWW calculates are struggling to pay is about the number they expected Q28: Please now look at Showcard C which sets out the number of customers within Welsh Waters area who are estimated to be genuinely struggling to pay their water bill. Do you think this number is Base: All respondents (n=440) 160,000 slide 20 81% felt the banded schemes, with customers on the lowest incomes receiving the most help, were acceptable Those claiming benefits were significantly more likely to feel it was perfectly acceptable
than nonclaimants. Q30. Please now look at Showcard D. This outlines how Welsh Water could structure assistance for different customers. How acceptable to you is this approach (ie a banded scheme, with customer on the lowest incomes getting the most help)? Base: All respondents (n=440) slide 21 Six in ten felt it very important that DCWW funds part of the scheme Q31. If introduced, Welsh Water would part fund the scheme. How important is it for you that Welsh Water funds part of this scheme from its profits? Base: All respondents (n=440) slide 22 Eight in ten felt it is important that participants have to accept water efficiency measures Q32a. If introduced, it could be a requirement that customers who qualify for the scheme have to accept
some water efficiency measures. How important is this for you? Base: All respondents (n=440) slide 23 Willingness to pay 75% of customers accept the introduction of the proposed social tariff at an additional charge of 15 pa Perfectly acceptable Acceptable Don't mind Don't know Not acceptable Completely unacceptable 100 90
0 20.00 35 20 17.50 15.00 12.50 Annual increase 10.00 Q32Q37. Customers who contribute to the scheme would pay an additional amount on their annual water bill from April 2015. Customers will not pay any more than a fixed amount per year towards the scheme. This value will not change by more than inflation. Welsh Water is committed to ensuring that all eligible customers will be accepted onto the scheme. It will bear all administration costs and is willing to make a substantial contribution to help reduce the costs incurred by other customers. If Welsh Water increased other customers bills by slide 24 7.50/10/12.50/15/17.50/20 a year, how acceptable would that be to you? Base: All respondents (n=440)
7.50 Acceptability summary Majority support for introduction of Social Tariff at all points Support consistent once scheme explained Only declines marginally at WtP 15pa *Acceptable includes dont mind ** Unacceptable includes dont know slide 25 Base: All respondents (n=440) Summary of Quantitative Results slide 26 Summary of current rates Two thirds felt their water bill represents good value for money Half agreed that their current water and sewerage bill charges are affordable
although this was lower among SEG DE (25% disagree compared with 15% overall) and those on benefits (23% disagree compared with 10% of those not on benefits) Nearly two thirds rated their water bill better value for money compared to their electricity and gas bill and council tax Only one in six were aware of any schemes that Welsh Water offers to help their customers and awareness remained low, even when prompted with the scheme names Summary of the proposed tariff Three quarters found it acceptable (or didnt mind) a reduced tariff for customers on low incomes Following further information, 82% felt it acceptable for DCWW to introduce a new scheme to help customers genuinely struggling to pay Around seven in ten could liken the DCWW scheme to cheaper gas and electricity for the elderly, cheaper travel for pensioners etc and free school meals for low income families Acceptance of the scheme remained high (81%) when the banded scheme was explained Part-funding of the scheme by DCWW and an acceptance of water
efficiency measures by participants are crucial 75% of customers accept the introduction of the proposed social tariff at an additional charge of 15 pa slide 29 Showcards slide 30 Show Card A - Background Dwr Cymru Welsh Water provides water and sewerage services to over 1.2 million homes in Wales and some bordering areas of England. Welsh Water is responsible for providing three million people with: a continuous, high quality supply of drinking water, collecting wastewater, Treating and properly disposing of the wastewater that is produced.
Welsh Water does not have any shareholders and all profits are reinvested to improving the service and keeping bills as low as possible. It is proud to have been one of the top three Water companies in England and Wales for quality and service for the last three years It has just been awarded the Wales Responsible Large Business of The Year. Show Card B Helping customers who are struggling Welsh Water knows that utility bills can be a burden on households, particularly during tough economic times. It aims to make water bills more affordable for all customers, particularly those in genuine financial difficulties. Welsh Water has already introduced schemes to help some of these customers including Welsh Water Assist , helps over 25,000 vulnerable customers. However, research shows that many more customers struggle to pay their water bill and Welsh Water can only provide support to more customers who help needed, if other customers are prepared to pay a little bit more. It is important for Welsh Water that the introduction of any new scheme is balanced by keeping bills affordable to all customers.
Show Card C Number of customers in need of assistance Welsh Water is looking to help those households with the lowest incomes because they are the most likely to be genuinely struggling to pay their water bill. The average household income of Welsh Waters customer is 32,600 a year. Welsh Water wants to help households whose total income is less than 13,000. That is 250 a week. This would help about 160,000 customers. Welsh Waters average household water and sewerage bill is 434 a year, which is 8.35 a week. A proposed average saving of 100 a year would be almost a quarter of the bill, which will make a meaningful difference for households on low income Show Card D Structure of Assistance Welsh Water would look at the total income of the entire household to decide whether they qualify for the scheme. There will be four bands of charges based on the level of total household income (as shown in the table below) Band
Household Income From A Average Saving The most they will pay each year % average saving To 5,600 250 184
58% B 5,601 6,700 180 254 42% C 6,701 8,600 115
319 27% D 8,601 12,500 55 379 13% Those in the lowest band will receive the highest level of support. Eligible customers will receive help in how to use water more wisely. Welsh Water will bear all administration costs and is willing to make a substantial contribution to help reduce the costs incurred by other customers.
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