Action required to protect low income water consumers from debt

A blog post by Consumer Scotland Head of Water Gail Walker

As the cost of living crisis continues, it is important all businesses and providers of services consider how effectively they help consumers manage issues of affordability and debt.

Previous research on household water debt found around one in five Scottish consumers were in debt for their water and sewerage services[i]. Consumer Scotland will look to update data to provide a current picture of water debt.

To improve protections for low income consumers, Consumer Scotland is  recommending two changes to the system for notification of water and sewerage charges and the collection of debt in relation to these charges.

Improved information for consumers

A range of factors can contribute to debt being accrued by water consumers in Scotland. This can include pressures on household incomes, which are particularly acute for those on low incomes, or who experience sudden or gradual changes to household finances. For some consumers a lack of clarity about how water and sewerage charges in Scotland are billed and paid for can also be a cause of debt.

This final point highlights a specific issue with how consumers receive the information about the water and sewerage charges they are liable for.

The vast majority of households in Scotland are charged for their water and waste water collection services as part of their annual Council Tax Notification from their local authority. While this system works effectively in most situations, confusion arises for some lower income households who are exempt from paying Council Tax due to their financial circumstances. These consumers are still required to pay a proportion of the water and waste water charges – and they receive their bill for these charges through the same, standard Council Tax Notification from their local authority[ii].

Not surprisingly, some of these consumers who are not required to pay Council Tax assume that they are also exempt from water and sewerage charges. They can then ignore the Council Tax Notification, miss payments on these charges and fall into debt – sometimes significant debt. According to research in 2015, some clients not required to pay Council Tax had debts ranging from over £200 to over £6000[iii].

We recommend action to improve the information that consumers who are exempt from Council Tax due to their financial circumstances receive about the water and sewage charges they are liable for.

We note that only one local authority issues Scottish Water’s information leaflet to households along with the Council Tax Notification. As a result, a significant proportion of households in Scotland do not receive a detailed breakdown of water and sewerage charges, nor a clear understanding that a proportion of their Council Tax Notification payment goes towards paying for such services. While the Council Tax notification does include a breakdown of gross and net amounts for water and sewerage charges, we feel that this is not sufficient.

All households should receive clearer and simpler information on water and sewerage charges. To help achieve this, and in particular to better protect low income consumers, we have asked Scottish Government to consider options for placing a clearer requirement on local authorities to engage with householders in a way that highlights their ongoing liability to pay. This may be, for example, through improved distribution of Scottish Water information leaflets, or through clearer information on the face of Council Tax Notifications to highlight that where households are exempt from Council Tax due to their financial circumstances, they are still liable for water and sewerage charges. Other alternative or innovative methods may also be appropriate and Consumer Scotland is willing to work with government and others to explore options that would be most effective for consumers. 

Assessing affordability

Further action is also required to support low income water consumers in Scotland who may be at risk of falling into debt.

Under current regulations, where a household misses one payment instalment on their water and sewerage charges, local authorities can demand that the rest of the charges for that financial year be paid immediately. There is no obligation on local authorities to undertake an affordability assessment with householders before initiating such action.

We are concerned that, given the significant wider pressures households are experiencing on their cost of living, an increasing number of low income consumers in Scotland would not be able to meet this requirement, leading to further problems of unmanageable debt. Considering the issues described above in relation to how these consumers are informed of their requirement to pay, our view is that there is a clear case for offering better protection to these households in terms of their debt liability.

As such, Consumer Scotland has asked Scottish Government to consider requiring local authorities to carry out ‘ability to pay’ assessments for those households missing one water and sewerage payment, to avoid exacerbating existing affordability issues.

Next steps

As part of the routine administration of the billing and collection of water and sewerage charges by local authorities on behalf of Scottish Water, Scottish Government is currently proposing updated arrangements for 2023-2024.

As part of the consultation process on these arrangements, Consumer Scotland has asked the Scottish Government to consider implementing the above recommendations relating to improved information for consumers and the introduction of affordability assessments.

We look forward to working with the government, local authorities and other stakeholders in the water sector to help address these issues and improve protections for low income consumers in Scotland, as they continue to deal with the cost of living crisis.


[i] Consumer Futures (2014) ‘Keeping your head above water’ (Figure 12)

[ii] Unmetered Charges 2021 - 2022 - Scottish Water

[iii] Sink or Swim: Consumers' experiences of water and sewerage debt