Specification of requirement
Research into consumers’ experience of water and sewerage debt
29 January 2015
For more information contact: Robert McGeachy on 0131 550 1069
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www.cas.org.uk
Copyright: Citizens Advice Scotland
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1. Introduction
About the Citizens Advice Scotland
Citizens Advice Scotland (CAS), its 61 member bureaux, consumer helpline and Extra Help Unit form Scotland’s largest independent advice network. CAB advice services are delivered using over 250 service points throughout Scotland, from the islands to city centres, and through our helplines. Together, the Citizens Advice service in Scotland helped 300,000 people with nearly 1 million issues in 2013/14.
CAS’s twin aims are:
· To ensure that individuals do not suffer through ignorance of their rights and responsibilities or of the services available; or through an inability to express their needs; and
· To exercise a responsible influence on the development of social policies and services, both locally and nationally.
On 1 April 2014, the roles and responsibilities of Consumer Futures were transferred to the Citizens Advice service, encompassing CAS and our sister organisation Citizens Advice (England and Wales). CAS now represents the interests of citizens and consumers in essential regulated markets including energy, post and, in Scotland, water. Our aim within the water industry is to challenge and shape policy to ensure it reflects the needs of consumers.
CAS uses consumer research to provide an evidence base to challenge and shape policy to ensure it reflects the needs of consumers. CAS presents research and our policy positions to government and to other water industry stakeholders, and publishes publicly available research based on our research findings.
2. Background
CAS is the consumer representative organisation for the water industry. It represents consumer interests, and advocates for change on behalf of consumers.
Different agencies play key roles for the provision of water services to households in Scotland, and for the charging of these services. Domestic water supplies in Scotland are provided by Scottish Water, while local authorities are responsible for the billing and collection of water and sewerage charges.
Research undertaken by Consumer Futures in 2012[1], which addressed awareness of water service provision amongst consumers highlighted that consumers’ awareness of Scottish Water’s role in delivering water services is relatively high whereas consumers’ awareness of the distinction between Council Tax and water charges is much lower. The research findings also demonstrated that consumers’ awareness of Scottish Water, as the drinking water provider, was high at around 79%. However consumers’ awareness of who to contact if they experienced problems with their water supply was lower at 59%. The research study found that consumer awareness of how much, and on what basis, they pay for water is low[2].
The current water and wastewater charging scheme has the following features:
· Tariffs are based on Council Tax bands and are the same across Scotland, geography having no influence on the amount households pay for water and sewerage services.
· The number of metered households in Scotland is negligible (less than 500).
· Local authorities collect water charges together with Council Tax using the same enforcement procedures[3]. From the charges collected by local authorities, a sum is paid to Scottish Water which provides Scottish Water with a percentage to all monies collected for council taxes and water charges, irrespective of their intended destination, as if they were a single payment[4].
· Single occupancy households receive a 25% discount (as they do on their Council Tax bill).
· Recipients of Council Tax Reduction receive up to a 25% reduction (the discount for households on partial benefits is calculated on a pro-rata basis).
· Households with no occupants chargeable for Council Tax (for example, students) or void premises are exempt and pay no water charges.
Previous research suggests water bills rank as a low priority for households. This can be because of the perceived ‘low impact’ of non-payment as water supplies cannot be cut off, but also from a lack of awareness of one’s ongoing liability to pay water and sewerage charges, especially if they are in receipt of Council Tax Reduction[5].
Local Authorities need to apply fora summary warrant before they can execute diligence against debtors, in other words take enforcement action such as a bank arrestment or arrestment of earnings to recover charges due. Debtors will have had reminder letters from the local authority before they apply for summary warrant. Once the summary warrant is granted by the Sheriff Officers the debt will automatically increase by 10 per cent, and the Sheriff Officers will serve a Charge for Payment on the debtor along with a Debt and Information package advising debtors where they can apply for help. Although the debtorhas no recourse to court before the summary warrant isgranted they will be able to use the Charge for Payment to make a repayment offer via the Sheriff Officers, apply to the court for a Time to Pay or declare themselves bankrupt.
A Water Direct pilot scheme is currently being tested within Inverclyde and Fife local authorities. It allows local authorities to take separate third party deductions to cover water and sewerage debt, and an additional deduction to cover current charges if the customer is not keeping up with payments. These deductions are in addition to Council Tax deductions and other debt repayments, such as rent.
3. Definition of the problem
Water and sewerage charges debt
Households in receipt of Council Tax Reduction can receive a reduction of water and sewerage charges of up to 25%. However, water debt can be a problem for consumers who through circumstances, low income or lack of awareness of ongoing liability for water and sewerage payments, find themselves unable to pay[6]. It would appear that some people on benefits and on low income, and in receipt of 100% Council Tax reduction, will assume that they will also be exempt from paying water and sewerage charges. This is not the case. Significantly, even those in receipt of a 100% reduction for Council Tax will only receive a maximum of a 25% reduction in their water and sewerage charges. This is a key factor underpinning levels of water and sewerage charges debt”.
Previous research by Consumer Futures indicated that up to 20% of consumers are in water debt in Scotland[7].
4. Why research is necessary
Research with consumers to understand their experiences of water debt will build upon previous research published in 2014[8], which consisted of desk based research as well as interviews with local authority officials. Understanding the causes of water and sewerage debt from a consumer perspective will provide a strong evidence base that will support CAS’ debt policy work with industry stakeholders, including Scottish Water, Water Industry Commission for Scotland, the Scottish Government and local government.
In particular it will inform CAS’s position relating to issues around water and sewerage charges billing and collection, and the extent to which households in receipt of full Council Tax Reduction should be liable for ongoing water and sewerage charges.
5. Research objectives
The objectives of the research are to understand:
- Consumers’ awareness of ongoing liability for water and sewerage charges when in receipt of Council Tax Reduction.
- Consumers’ understanding of water charges.
- Consumers’ views of water charges, i.e. willingness to pay and priority given to water charges.
- The circumstances that lead to customers being in debt for water and sewerage services.
- Consumers’ views of water debt recovery practice, i.e. views on fairness and best methods of collection.
- Consumers’ personal experience of water debt recovery practices.
- The impact of water debt and recovery practices on consumers.
The research will progress these objectives by considering the following issues and areas:
· Consumers’ self-perception of money managing skills
· Consumers’ awareness of water and sewerage charges
o How aware are consumers of the distinction between Council Tax and water and sewerage charges?
o Are consumers aware of Scottish Water and its role? Is there a link between knowledge of Scottish Water and knowledge of separate water and sewerage charges?
o Are consumers aware of their continued liability for water charges even if they receive Council Tax Reduction?
· Do consumers know how much they pay for water and sewerage services (and/or council tax as they may be unaware of water charges)?
o How do consumers pay for water and sewerage services? With Direct Debit, in cash on instalments, through deductions from benefits?
· Consumers’ experiences of managing money and debt
o Do consumers have Council Tax or water and sewerage arrears?
o What other debts do consumers have?
· Why are consumers in water debt? What circumstances led them to be in debt for water and sewerage charges?
o How does their experience of managing money compare with the self-perception of their own money managing skills?
· What are consumers’ views towards debt for water and sewerage charges? Are water and sewerage services a priority debt?
· How do consumers manage multiple debts?
· How do consumers repay water debt? Through a Repayment plan?, By payment of a lump sum?, Or through direct deductions from benefit?
o (For Fife cases only[9]) Have consumers had any experience of additional deductions being taken from their benefits for water and sewerage charges and what impact has this had?
· What is the consumers’ view of Council Tax / water and sewerage debt recovery practices?
· Hypothetically, what debt recovery practices should be used?
o Would the separation of council tax and water charges for debt collection purposes be fair? Or do consumers regard it as ‘one bill’ which should only be subject to one deduction?
o How would consumers view direct deductions for water charges and arrears, separate from deductions for council tax (as is the case with Water Direct)?[10]
· What impact does debt and debt recovery have on the debtor?
o What impact does water debt have?
o For those not in Water Direct pilot, what impact would separate Water Direct deductions have?
6. Uses of information
The research will be published and will be used to inform policy development within the water industry and by other public body stakeholders. It is anticipated that the research will:
· Allow CAS to make specific recommendations to stakeholders, including Scottish Water, the Water Industry Commission for Scotland and the Scottish Government on what is needed to protect and support vulnerable consumers to mitigate the impact of water debt.
· Identify if specific water and sewerage third party deductions / debt recovery practices have been helpful to the consumer, or could be helpful to those not in the current Water Direct pilot areas.
· Form part of CAS’ ongoing policy development and advocacy work on water and sewerage debt, and on general debt.
· Be used to benefit consumers, including raising consumer awareness about water debt, including the distinction between Council Tax charges and water and sewerage charges.
· Inform industry stakeholders about consumer opinion and experience.
· Provide baseline evidence for future research into water debt.
· Help to inform CAS’ future work plan.
7. Target population
Research should focus on low income consumers, both with and without employment (in particular MRS Society Grades C2,D,E) who are more likely to face debt issues, and be in arrears for water and sewerage charges. This should include low income consumers who are in receipt of Council Tax Reduction.
It should also take note of respondents’ income status, council tax band, receipt of welfare benefits, age, employment status, disability, local authority. The sample should be broadly geographically representative.
Research participants should be the person (or one of the persons) responsible for paying water charges in the household. In particular, for the purpose of the research it is important that the research includes a focus on Inverclyde and Fife local authorities, as well as at least two other local authority areas in Scotland.
8. Anticipated approach
We anticipate that research will be qualitative. The Supplier can propose suitable methodology, including research methods and interview lengths required to elicit results within the budget specified, and an implementation plan to meet the research objectives, which will be agreed with CAS. Research methodology may include telephone, face to face interviews or focus groups, or a combination of these methods[11].
For comparison between tenders, we ask for quotes based on 30 minute telephone interviews with 30 consumers, and also for 30 minute telephone interviews with 50 consumers.
CAS will be involved in developing topic guides and interview prompts in conjunction with the Supplier.
Suppliers should provide details of the interview framework they intend to adopt, their approach to recruitment of participants and methodology for analysing results.
It is CAS’ expectation that the supplier’s activities to progress the research will include a strong focus on the Inverclyde and Fife local authority areas. It is also anticipated that at least two other local authority areas will be covered by the research.
9. Analysis required
Interviews will be transcribed and analysed. Analysis will make reference to consumer age, location, income, work status and council tax band.
We will use the findings from this research to build upon our previous water debt report and to inform our recommendations regarding tackling water debt and work with water stakeholders and local authorities.
10. Deliverables
• Draft copies of all key documents, such as the recruitment profile, topic guide and final reports. These should be submitted in sufficient time for comments to be incorporated and for our approval to be given before producing final versions.
• Top line findings (upon completion of the fieldwork) or an interim report
• A full written report (with any specific subheadings and recommendations agreed with CAS) in Microsoft Word setting out the findings with an executive summary and relevant appendices (including copies of survey questions/interview questions).
• Transcripts of qualitative research.
• A presentation of results at CAS offices in Edinburgh with accompanying PowerPoint slides.