Memorandum submitted by Central Council
of Physical Recreation (CCPR) (Ofwat 10)
KEY POINTS
FOR THE
COMMITTEE'S
CONSIDERATION
That the Committee urge Government to:
— Ensure that OFWAT acts upon paragraph
2.44 of DEFRA's guidance to the Water Act 1999.— Permit
water companies to develop a "social tariff" for community
buildings.
INTRODUCTION
1. CCPR is the representative body for some
270 national sport and recreation organisations, which in turn
represent some 150,000 voluntary sports clubs and 8 million participants.
CCPR welcomes this Inquiry and is pleased to submit this evidence.
2. It is estimated that as many as 40,000 voluntary
sports clubs may own some form of playing, social or changing
facility which will be connected to water and sewerage services.
This response pays particular attention to the impact of the price
review on these clubs and therefore primarily addresses the affordability
of water services.
AFFORDABILITY OF
WATER SERVICES
3. The Committee's 2003 Inquiry considered
affordability for low-income householders, and came to the conclusion
that "measures to help vulnerable customers do not appear
to have been effective". The Walker Review is further considering
means to improve affordability for those on low incomes. The Cave
review meanwhile considers affordability from the perspective
of business consumers.
4. CCPR agrees that affordability is crucial
to both domestic and business users of water and sewerage services.
However, the actions taken to date fail to address the concerns
of a significant body of customers, namely the owners and users
of non-domestic, non-commercial community buildings. This includes
churches, village and community halls, scout huts and the voluntary
sports clubs represented by CCPR.
5. The issue of affordability has been brought
into sharp focus in recent months due to OFWAT urging water companies
to move to site area charging for surface water drainage. To date
only a limited number of water companies have moved to this model,
yet the impact on water bills for those clubs affected has been
drastic, as demonstrated below:
|
| Building | Previous annual charges
| New annual charges
| Percentage increase
|
|
| Penrith RUFC | £671.42
| £4105.18 | 511%
|
| Southport Argyle Tennis Club | £740
| £2,407 | 225%
|
| Carlisle Subscription Bowling Club | £94.58
| £1233.00 | 1203%
|
|
6. In 2007 CCPR commissioned a survey of over 2,000 sports
clubs in the UK. This found that 51% of clubs were operating at
break-even or deficit level. It is clear that increases such as
those shown above will simply move more clubs into a deficit position,
and ultimately threaten the existence of community sport. For
this reason CCPR believes that the affordability debate must consider
a third group of customers, namely "community buildings".
OFWAT GUIDANCE
7. CCPR believes that OFWAT's requirement for water companies
to impose site area charging on community buildings at the same
rate as that for commercial buildings is in conflict with the
DEFRA's guidance under the Water Industry Act 1999, which states
at paragraph 2.44:
There are also many non-household users who are not businesses:
the occupiers of premises used for public and community functions,
arts, education, or health, places of worship, community sports
facilities, clubs, charities and voluntary bodies. It would be
inappropriate to charge all such customers as if they were businesses.
The guidance also provides OFWAT with a potential model for
addressing affordability as experienced by community groups, namely
a "social tariff":
The Secretary of State is keen to encourage the development
of innovative tariffs that can assist customers who may face difficulty
paying their water bills. The terms of companies licences require
them not to exercise undue discrimination between customers. However,
this does not wholly rule out the principle of social tariffs.
Where companies devise well-considered and workable proposals
for social tariffs, which do not have unacceptable impact on other
customers' bulls and do not represent `undue discrimination' the
presumption should be that such tariffs should be allowed in charges
schemes.
9. CCPR therefore believes that water companies should
be allowed to set a "social tariff" applicable to community
buildings.
CONCLUSION
10. Voluntary sports clubs and other community buildings
are currently experiencing serious affordability problems with
regard to water and sewerage services. This threatens the very
existence of the voluntary groups that bind together the fabric
of community life. CCPR would therefore request the Committee
to urge Government to:
11. CCPR would welcome the opportunity to provide oral
evidence to the Committee alongside other representatives of the
community buildings sector.
CCPR
February 2009
| 
