Householders 'owe water companies millions'

Householders owe their water companies millions of pounds in unpaid bills as debt levels continue to rise, figures out today show.

Unpaid water bills more than a year old totalled £490 million in 2005-06 - up by £30 million on the previous year, regulator Ofwat said today.

Bills left unpaid for less than a year hit £446 million in the year to April 2006.

That figure increased from £403 million in 2004-05 and £380 million the previous year.

The Consumer Council for Water said rising debt levels followed last year's sharp increase in water rates.

Ofwat's figures show the industry spent £78 million on debt management activities in the last year.

This included sending reminders, plus 8.3 million letters warning of possible legal action for non-payment - up 43% on the previous year.

Despite this activity, water companies wrote off £103 million of household debt in 2005-06.

Around £122 million of the £446 million of unpaid for less than 12 months in 2005-06 had "only recently" been billed, Ofwat said.

The regulator today called on the water industry to nip water debt in the bud to prevent rising costs for all customers.

Ofwat's head of consumer affairs Sue Cox said: "We expect all companies to help customers in financial difficulties make suitable payment arrangements as set out in our debt guidelines."

The regulator today launched a consultation on its guidelines which aim to help water companies deal with outstanding bills.

Dame Yve Buckland, chair of the Consumer Council for Water, called on the industry to find better ways of reminding customers they owed money and how they could pay.

"Today's figures show a lower increase in debt than we feared following last year's sharp increase in bills, but the underlying problem is still huge," she said.