The water industry is facing a massive debt collection problem. For 2010-2011 something like £1.6bn was outstanding from its customers. This is estimated to add £15 to the bills of those who do pay.

The worst offenders are tenants in rented properties and unlike the gas and electricity industries there is no requirement on the landlords to give the tenants’ names to the water companies. This means that many tenants are not pursued for unpaid water bills and the level of bad debt in the water industry is now some three times the level of the energy sector. This is despite the fact that water bills are far lower than energy bills. The average water bill is around one third of the average energy bill. Landlord insurance clients may well have been involved in situations where the tenant has absconded leaving unpaid bills behind.

The government has launched a consultation in England to explore ways of tackling the problem. One option would be to make landlords liable for the water bills if they fail to supply the tenants’ details. The other possibility would be a voluntary scheme asking landlords to supply the tenants’ details. No doubt landlords will not relish the idea of picking up the tab for tenants who disappear without leaving a forwarding address.

If you would like to find out about the consultation visit the DEFRA website www.defra.gov.uk