Cut Thames Water bill WITHOUT a meter

sardarji

Did you know that besides the old rateable-value method or a meter there is a third way of being charged for water? And that it might save you hundreds of pounds a year?

Quite likely not. But there is. It’s called an “assessed charge”. It’s meant for properties that can’t have a meter fitted (for instance, a flat that hasn't the space, or the access, or gets its hot water from a boiler that serves the whole block). It’s a set figure--depends which water company--for a one-person or two-person household, maybe with variation for the number of bedrooms.

If your flat’s rateable value is high, you could save a bomb this way. Trouble is, you have to know about it, apply for a meter, be told you can’t have one but there is this assessed charge. And not many people do know.

The Times on August 1st carried a story about a lady who was being charged £980 a year by Thames Water on the rateable-value basis. Her "assessed charge”--she lives on her own--would have been only £165. In four years she reckons she reckons she’s been overcharged some £3,200. She’d never heard of assessed charges.

Why not? Because (let’s be polite about this) Thames Water didn’t exactly ram the news down her throat. Nor do many other companies.

I’ve seen a 2008 Thames Water pamphlet--one of those things that mostly tell you what a splendid lot your utility company is. Right at the start, it cheerily mentions rateable-value and meter charging as if those were the only two alternatives. The mere existence of Thames Water’s “assessed household charge” is buried (and even then without a hint that it might be much cheaper) in an article deep inside the pamphlet, under the heading “Thinking about a water meter?”

How many sensible people who know their flat can’t have a meter spend their time doing that? So how many would ever read an article with that title--even if they do plough through things like Thames Water’s self-congratulatory flannel? Not many.

The company’s website has more information. But if you don’t know this method of charging exists you sure have to click and click and click to come upon it. And how many little old ladies--or little old men--on their own use the Web anyway?

So the very people who could gain from an assessed charge are the least likely to learn about it.

How many tens of thousands of water bills, and how many extra hundreds of pounds a year from each one, does that add up to? A nice little earner for Thames Water--most of which would come abruptly to a stop if they publicised this third method of charging properly. How odd that they don’t. Wonder why not.

Cardew

Assessed charges for properties where a meter cannot be fitted has been covered scores of times in this section of MSE.

The number of properties where meters cannot be fitted are relatively few, and as they tend to be mainly older flats, if they have a low RV many will not be advantaged by having an assessed charge.

I would certainly agree with you that more publicity should be given to the assessed charges scheme, but of course to find out if you qualify for that scheme you have to apply for a meter, and many have an irrational fear of meters. You might ask why the lady in the Times article had not applied for a meter?

However there is one major flaw in your post.

A nice little earner for Thames Water--most of which would come abruptly to a stop if they publicised this third method of charging properly. How odd that they don’t. Wonder why not.

That quote shows a fundamental flaw in your understanding of how the water industry is funded.

Your post implies that any reduction in income from more properties having assessed charges will hit Thames Water's profits; and that is why they refrain from giving the scheme publicity.

That is simply incorrect!

The Regulator -ofwat - stipulates how much revenue any of the water companies can raise each year. In essence their(ofwat) approved expenses and profit margin determine their water charges.

So if, say, Thames Water were to 'lose' £1million revenue by more properties having assessed charges, the shortfall will be made up by an increase in charges for their metered/unmetered charges.

In this respect, all the water companies are in a win/win situation. They get their agreed revenue, and agreed profit margin, regardless of how the charges are collected.

To take a silly example, if all properties where a meter could not be fitted were given their water for free, it would not affect the revenue/profit of the water companies.

This is the reason why it does not concern Water Companies if loads of their customers get a meter and pay less than for RV based charges. Their revenue stays the same - Peter pays Paul!

sardarji

Thank you. Cardew, But alas, not everyone reads MSE, let alone as regularly and over the years as you do. So:

1. Why did the lady in the Times article not apply for a meter? Her words, as quoted in The Times: "...because the building is not suitable". She plainly knew she couldn't get one. Nothing there suggests any irrational fear of meters. In conrast, it is indeed "irrational" to apply for something which you know can't be done.

Unless, of course, you can get some advantage thereby--which she didn't know she could. And, as The Times commented: "It is astonishing that no one at Thames Water told you that £980 a year is steep for anyone...nor advised you of ways to bring it down."

2. "The number of properties where meters can't be fitted is relatively few". Not in London it isn't. Nor are they all by any means of low rateable value. And even if that were so, it does not (as you agree with me) justify not publicising a charging method that would indeed save many of them large sums.

3. I question your mechanistic view of water company finances. Ofwat's controls are fixed to cover the broad numbers, overall, and in advance and over a period of years. But they are not applied automatically, nor varied every month, to take account of every variation in revenue.

stephenhj

If enough rateable-value households switch to an assessed charge to cut Thames Water's revenue by £1 million a year, no doubt Ofwat will take account of that when next it fixes the figures for the period ahead. But surely it won't fix them in a way that not just avoids a future shortfall for Thames Water but allows the company to make up accumulated shortfalls from the past? Maybe two or three million quid or more, depending just when this happens in the figure-fixing cycle? "Nice little earner" seems to me a fair description for the way Thames Water gains by leaving its (tied) 'customers' in ignorance.

Cardew is certainly right in thinking there should be more publicity for the assessed charge. But so is Sardarjee in saying there are plenty of people who don't know about it.

I was one, till I read the piece in the Times. Our London flat is in a large block with a comunal boiler. So we all know we can't have a meter. So--with maybe one or two exceptions--I don't think anybody has asked for one. I'm pretty sure few of us can ever have heard of an 'assessed charge', or we would have.

That lack of information has cost me a total of around £1,500 over the past seven years. It may have cost my upstairs neighhbour--a single occupant of a high-rated flat--around £3,000.

Why hasn't Thames Water told us about its 'assessed household charge'? When I contacted the company, I was told it was company "policy" not to inform a customer of this method of charging until it was "applicable" to their house or flat--ie until after they had asked for a meter and a survey had shown that one couldn't be fitted! Why on earth not?!

Is that fair? Is it honest? What would you think if the only garage for 20 miles around for many years let you think that the only fuel suitable for your ancient high-performance BMW was the garage's patent HyperWhizzLeadedPowerGas at hyper-high prices--and then you discovered (no thanks to the garage) that all the time you could have been using ordinary unleaded 95-octane at an ordinary price?

And when you asked the garage why it hadn't told you long ago, it blandly replied "Oh, most people with old cars think what you did, and they're wrong. But until you ask us for a special engine check it's company policy not to tell you."

I am seeking to be repaid the £1,500 that Thames Water and its policy of deliberate policy of don't-tell-the-customer have cost me. They of course are refusing. I suggest anyone who has suffered for similar reasons should (a) at once demand a meter, even though they know they can't have one; (b) demand to be repaid the total overcharge of past year; and (c) get in touch with Ofwat asking for its help, pointing out that this is a serious policy issue, not one of the odd individual grievance.

Even elephants can be shifted if they get enough pinpricks

PlutoinCapricorn

Thank you Sardarji for raising this issue, and thank you very much Stephenhj for making me feel slightly better because I am not alone in getting a bad deal. I am a few hundred pounds out of pocket because TW did not tell me exactly what I needed to know. It is really my fault for trusting them and assuming that they would look after my interests in the most efficient manner and get me the best deal.

I first heard about the Assessed Household Charge in March 2008 – from Metro newspaper not Thames Water – and immediately applied online and over the phone to go on it. I did not know that it was necessary to go through the motions of applying for a meter, and I knew that I could not have one. When the bill for 2008/09 came, I wrote to ask why I was still on the standard charge – no reply.

I am STILL not on this charge: I am back to square one and need to apply for a meter, despite sending evidence to TW that I can’t have one. I live in a mixed-use block, other residents have applied and been told there is no chance. I even have a letter from TW that says that the flats in my block cannot have individual meters.

TW’s customer service department were not at all helpful. It was only a few months ago that I suddenly realised that the only way to get onto the AHC is to apply for a meter. I thought that by telling them that I could not have one I could save them trouble, jump the queue and get on the AHC much more quickly. There was a lot of correspondence, they strung things out and kept me dangling. They asked for a copy of the letter from TW, my main ‘evidence’. They did not reply to this. I never received the letter that they wrote to me in 2007 in response to my enquiry, they eventually sent me a copy and I saw immediately that it did not have my name and address on it: they use window envelopes so no wonder I never got it.

I eventually learned that only people who applied for a meter in the past and been rejected were invited to apply for the AHC. TW completely overlooked anyone who did not apply because they know they could not have one.

I feel completely drained and defeated, but I need to start the ball rolling in time for FY 2010/11.

I am considering complaining to OFWAT, but TW have told me that I won’t get compensation because it was up to me to apply for a meter. The AHC started as from April 2008 by the way.

The following link shows that this issue is known:
http://www.theyworkforyou.com/whall/?id=2007-05-23b.484.0

Cardew

I am the very last person that should be accused of defending Water Companies. The Water privatisation Bill(thank you Maggie!) put them in a Win/Win position and their approach toward customers is a disgrace in many cases.

An even more disgraceful and widespread situation than the assessed charge, is the ‘default position’ where all properties(on RV or Meter charges) are charged for Surface Water Drainage(SWD). Many, probably millions, simply are not aware that they should not be paying this charge as none of their surface water enters the sewer. Properties built in the last 30 years were not allowed to have water enter sewers(except in very rare cases) but they are still automatically charged for SWD

Customers not only have to be aware of this unfair charge, but apply for exemption and prove that their water does not enter a sewer.

SWD, like assessed charges in lieu of meters, was a legal requirement under the Water Act so the Water companies are not to blame. However where they are completely culpable is not mounting a campaign to make householders aware of the situation.

I question your mechanistic view of water company finances. Ofwat's controls are fixed to cover the broad numbers, overall, and in advance and over a period of years. But they are not applied automatically, nor varied every month, to take account of every variation in revenue.

Whilst you are correct in this statement, it really does not detract from what I said in my first post and it is not a ‘nice little earner’. In fact if you think about it, the situation loses the water companies money in the current financial year.

i.e. We agree, I believe, that ofwat allow company x to set their charges for the year ahead based on a certain forecast revenue. Now if lots of customers apply for an assessed charge and relief from SWD charges, their charges are reduced for the whole of that financial year – (e.g. apply now and your charges are backdated to April.) This results in a shortfall for the company.

They do of course recover that shortfall in the following year’s charges; in the same way as they are penalised for exceeding any approved profits.

I suggest it is this ‘insulation’ from the financial realities faced by other commercial firms that makes them so contemptuous of their customers. They don’t lose either way, but then they don’t make a ‘nice little earner’ either which was the original thrust of the OP’s post and the reason he stated they kept quiet about the situation.

On the subject of backdating SWD and Assessed charges for previous years. This is covered in both ofwat and Consumer Council for Water publications.

Their line, in essence, is that charges for every water customer in previous years were set in accordance with the agreed expenses. For the companies to pay rebates for SWD/assessed charges that will amount to many £millions for previous years, the money will have to be found from somewhere. Where do you suggest it is found? (If you say from the Government or company profits I will know you are not being serious!!!.)

The money could only be found by a levy on all customers for previous years, or on future charges – both unfair it is argued

As indicated above, there are masses of grounds on which to criticise water companies, but if you base accusations on their 'nice little earner, they will have a valid defence.

P.S Stevenhj I believe TW have only just introduced single occupant assessed charges, so whilst the occupant has paid more that they might have done, it would be on the flat not as a single occupant.

Cardew

This is the ofwat position on backdating charges. Whilst if refers to SWD the principle applies to assessed charges.

Why can't the surface water drainage rebate be backdated?
There is no legal obligation for companies to backdate any rebate of charges beyond the current charging year. In fact the Water Industry Act of does not prevent companies from charging for surface water drainage even where customers do not receive the service. Nevertheless, following a requirement from Ofwat, all companies have provided rebates for non-connection since April 2001.

We think it’s right that companies should not pay rebates retrospectively past the current charging year. Surface water drainage costs have historically been shared between all customers. As a result of offering the rebate to those not connected, other customers must pay slightly higher charges to recover the total costs of surface water. If rebates were applied retrospectively therefore, this would mean corresponding retrospective increases in charges to connected customers, who had previously paid too little for the surface water drainage service. This would be neither practicable nor desirable. Companies must ensure that this information is included in the billing literature sent with the customer’s bill.

This is from the CCW

Why can't the Surface Water Drainage rebate be backdated?

Charges Scheme approval
The law requires sewerage companies to offer rebates for surface water drainage where customers' properties do not drain to the public sewer.
There is no legal obligation for companies to backdate any rebate of charges beyond the current charging year. The Water Industry Act of 1991 (and case law establishes) does not prevent companies from charging for surface water drainage even where the service is not received.
This change is designed not to affect a company's finances. For every customer who does not pay the charge all others have to pay slightly more. If the rebate were backdated then there would need to be a corresponding backdated increase in other bills. The administration of such a system would be complex and expensive and so not in customers' interests.

Note my bolding on the subject of company's financing - reducing charges for SWD and Assessed charges is 'income neutral' for the companies.

If every property in UK were given an assessed charge it wouldn't affect the companies profit - as said above 'robbing Peter to pay Paul'.

stephenhj

1. Forgive me, Cardew, but you really are mistaken. In finance, cash-flow timing counts. The figures that control water company charges are not fixed, as I understand it, every year "for the year ahead" but for five years ahead. So a 'shortfall' in company revenue in year A will not be allowed-for for anything up to A-plus-five years later. And even then that's for the future, the company won't recoup its past shortfalls. "Nice little earner" is just the phrase for the result of leaving some unlucky consumers in ignorance.

2. More important for the new assessed-charge consumer, he'll be lucky to get any repayment backdated even to the start of the current charging-year. Thames Water tells me that their assessed charge only starts from the time this charge becomes applicable to the individual flat, even if the flat could have been on this basis for years. Ie, after its owner has first learned that the assessed charge exists and then has gone through the entire process of applying for a meter that he knows he can't have, been surveyed, etc etc.
The fact that water companies have no legal obligation to backdate beyond the current year does not--in Thames's view--mean that they have any obligation to backdate even that little distance.
I don't know what Ofwat thinks of this. But even if it disagrees, why stop there? Why does it blithely accept this limit to backdating? Its reasoning is weird. Why on earth should other consumers be (in theory) liable to make up the money if water companies had to repay some victims for years of overcharging? If some cowboy cheated you for years, would you accept (or any court adjudge) that he should repay you for only one year?
Why should water company overcharging be different? After all, it didn't happen by accident. As I now know from Thames Water, it's that company's deliberate policy to delay telling potential beneficiaries of the very existence (let alone the details or likely benefits) of assessed charges.

3. Thank you, Cardew, for telling me about the novelty of the single-person charge. If it's really that recent, I may have overstated my neighbour's costs. But certainly not those of our two-bedroom, two-person flat--or countless others like us.

stephenhj

To PlutoinCapricorn. Go ahead--you and any other victims of Thames Water's s non-information policy. Raise Cain with Ofwat and anyone else. Ofwat are trying to shuffle me off to the powerless consumers council for water, but if enough people shout they may realise they can't do that to all of us.

PlutoinCapricorn

The issues raised in this thread have made me realise that it is useless to wish that, just as the Home Telephones thread has official BT reps, the Water Companies would have their own reps on MSE.

The BT guys seem really good, and step forward to intervene on behalf of BT customers who are at the end of their tether. They seem to get their affairs sorted out very quickly. Unfortunately, with Thames Water it is a matter of policy not mistakes made on individual accounts. If they will not back date compensation, nor take responsibility for ensuring that their customers are aware of all their options, nor make provision for people who want meters but don't apply because they know that they can't have them, then there is not much that anyone can do about it as an individual.

I really believed that if I provided TW with a lot of evidence that I am a very low user of water and that I am unable to have a meter, they would immediately put me on the AHC (followed by the recent single occupant tariff) as from the date of my first application. It took a long time before I realised that they would or could not do this.

I will certainly summarise my own experience for OFWAT: I know that everything is ultimately my responsibility but I have been fobbed off and delayed. The stupidity, waste of resources and bureaucracy is very depressing.

I was delighted to see that Andrew Smith MP had raised many of these issues in Parliament: we all seem to agree that TW do not tell people what their options are, and that the people who most need to be aware of them are the least likely to know what tariffs are available. Not everyone is able to go online and do some research.

Cardew

stephenhj wrote: »

1. Forgive me, Cardew, but you really are mistaken. In finance, cash-flow timing counts. The figures that control water company charges are not fixed, as I understand it, every year "for the year ahead" but for five years ahead. So a 'shortfall' in company revenue in year A will not be allowed-for for anything up to A-plus-five years later. And even then that's for the future, the company won't recoup its past shortfalls. "Nice little earner" is just the phrase for the result of leaving some unlucky consumers in ignorance.

2. More important for the new assessed-charge consumer, he'll be lucky to get any repayment backdated even to the start of the current charging-year. Thames Water tells me that their assessed charge only starts from the time this charge becomes applicable to the individual flat, even if the flat could have been on this basis for years. Ie, after its owner has first learned that the assessed charge exists and then has gone through the entire process of applying for a meter that he knows he can't have, been surveyed, etc etc.
The fact that water companies have no legal obligation to backdate beyond the current year does not--in Thames's view--mean that they have any obligation to backdate even that little distance.
I don't know what Ofwat thinks of this. But even if it disagrees, why stop there? Why does it blithely accept this limit to backdating? Its reasoning is weird. Why on earth should other consumers be (in theory) liable to make up the money if water companies had to repay some victims for years of overcharging? If some cowboy cheated you for years, would you accept (or any court adjudge) that he should repay you for only one year?
Why should water company overcharging be different? After all, it didn't happen by accident. As I now know from Thames Water, it's that company's deliberate policy to delay telling potential beneficiaries of the very existence (let alone the details or likely benefits) of assessed charges.

3. Thank you, Cardew, for telling me about the novelty of the single-person charge. If it's really that recent, I may have overstated my neighbour's costs. But certainly not those of our two-bedroom, two-person flat--or countless others like us.

I really don't want to be put into a position of defending water companies, who I heartily dislike; however some comments on your post.

Firstly The Companies, Ofwat and the Consumer Council for Water(and they look after consumer's interests)!, do not agree with you that there has been any overcharging; so basing arguments on that premise is futile. They are implementing policy.

Without going into chapter and verse of Water charges, IMO you are confusing the 5 year plan set by ofwat with the actual charges a company will make each year. This quote was from Ofwat on their previous(2004 -2009) 5 year review.

Framework for setting price limits
1.12 We set price limits for each company by forecasting the revenue that it
is likely to need to run its business efficiently. We compare this with the
revenue the company currently receives. We then calculate the
percentage change in revenue needed in each year, after allowing for
inflation.

You apparently think, for instance, if xx thousand additional customers qualified for a reduced social tariff, or relief from Surface water Drainage charges, or had reduced assessed charges, then the shortfall will come from the company profits?

If that were the case why do they state:

This change is designed not to affect a company's finances. For every customer who does not pay the charge all others have to pay slightly more. If the rebate were backdated then there would need to be a corresponding backdated increase in other bills.

Still believe what you wish, we are at least in agreement that the actions of the Water Companies in not giving full publicity to the possibility is disgraceful; especially(as I maintain) that it is cost neutral! Even you presumably would agree that the forcast of revenue will take into account those currently on assessed charges?

P.S.
If you have queried the backdating of the assessed charges, then it would appear I was misinformed. However they certainly backdate the charges for Surface Water Drainage to the beginning of the current financial year, so the principle still applies.

For houses, the rebate will be applied from the
beginning of the billing period or financial year in
which we receive the claim, whichever is the earlier.
For other premises the rebate will be applied from
the beginning of the financial year, i.e. 1st April
2009, for claims received in 2009/10.