It has been a while since I have moaned about UK utility companies, but then I received my water bill. In the old days, i.e. before the 1990s, you paid a flat rate for water consumption based on the size of the house. This meant that large families packed into small houses benefited and single old people tended to lose out. Then with the privatisation of water companies in 1989 many of the numerous water companies began to compel tenants and new owners of houses to have water meters fitted. They generally set the tariffs far too high and in the early 1990s there was a rocketing in the number of people having their water cut off, mainly these families who had benefited under the flat rate system, many had to wash at relatives' houses and there was a disproportionate impact on the hygeine of children. The regulator set up in 1989, OFWAT, the coloquial name for what since 2006 has been Water Services Regulation Authority, reined in these extremes, and to a great extent most of us have become used to water metering. In many areas, like where I currently live, rather than water supply and sewage being handled by the same body they are now covered by two different companies. Where I used to live there was one company for both and the sewage charge was 10% of the water charge. Where I am now the sewage charge was initially set at 108% of the water charge and now that I have been here more than a year it has fallen to 95% of the water charge. Basically I am paying for all water I use, twice, even if I tip the water on to the grass or down someone else's drain.
The difference between water meters and gas and electricity meters is that as a consumer you cannot read a water meter yourself. Recently combined the charge for my gas and electricity was raised by £25 per month, and I received a statement that my consumption of both had risen. I accepted, given the snowy winter that consumption of gas had gone up but given that we had switched off one of the two refrigerators we had in the house, I found it difficult to accept that we had been using more electricity. I contacted the supplier and sent in my own readings. The revised bill showed a fall of £25 per month over what I had been paying for both fuels combined last year, so about £50 less per month than I would have been charged if I had not challenged the bill, so saving up to £600 per year. It turned out that because we had moved from a set pattern of heating during the winter and only switched it on and off when we felt cold, our consumption of gas had actually fallen, despite the snow, and our electricity consumption was down by about 20%.
We are very frugal in our house and do not flush the toilet until it smells unpleasant, two people usually use the same bath water and most of the time we shower. We now wear our clothing for many days or even weeks to reduce the amount of clothes washing we do. We no longer grow vegetables so do not water the garden any longer. We probably do not smell as nice as we once did, but it keeps water consumption down. You can imagine my surprise when I found my water bill was more than trebling from £3 per month in 2009/10 to £10 per month in 2010/11. There is no way that we are using three times as much water as last year. However, unlike with the gas and electricity I cannot see the water meter (it is buried under the concrete at the front of the house) and am reliant on whatever figures the water company sends.
A major part of the problem is that you are not actually charged on the amount of water, gas or electricity you have used, you get charge for an estimate of what you will use in the year coming. If you do not stay in a property then you gain no benefit from being economical with any of your utilities as they will not see your lower consumption of the resource until after you have left, so you might as well be profligate with your water, gas and electricity because no matter what you do you are going to get charged for it. This greedy approach from utility companies works against any 'green' steps we might take to reduce our carbon dioxide 'footprint' or use less water. They give no incentive for you to be frugal, in fact the complete opposite. As frugal consumers, we lose out.
As you can see from the examples above, the charges the utility companies demand often seem to be conjured out of the air rather than based on real consumption levels. A few years back I rented a five bedroomed-house with a woman and her infant son. Previously seven adults had lived in the house. When we received the water bill, the company felt it necessary to tell us that our consumption was 'excessive' and that we should use less water. We asked how as three people, one only a child, we were using more than seven adults had done. I accept those seven adults may have been smelly but as I have shown, we are very economical in our consumption. It seems this time the figure has been conjured out of the air. I could accept a small increase due to investment or repair costs, but a 230% increase seems mad. Naturally I have challenged the water company, but not having my own figures I am unable to base my challenge on measurable figures.
Generally at the end of the year we find we are in credit to all the utility companies, including the telephone companies. Until we move out of the house we do not receive this money back and usually it is rolled on into the next year. All the time the company is holding our money not for anything we have actually bought for them, simply on the basis of what they say we will use in the future. It gains interest (however small at the moment) while it sits in their accounts and we are deprived of that money ourselves. I certainly advise everyone to challenge their utility supplier. Privatisation was supposed to create a competitive market in utilities but in fact has simply created a cartelised one in which the deal for the average consumer is very poor. For now, however, the companies do seem to yield if you challenge them, and like me, by simply emailing them you could save yourself £600 or maybe more, per year. What needs to happen though, and is very unlikely to do so given the new government, is utility companies be compelled to have charging systems that in fact encourage frugal consumption, rather than as at present have systems that encourage not to give any thought to how much you use because you know you are stuck paying the same rate whatever you do.
Showing posts with label utilities cut off. Show all posts
Showing posts with label utilities cut off. Show all posts
Wednesday, 9 June 2010
Monday, 7 May 2007
UK Utility Companies - cash vampires of Britain
This post in some ways picks up from my earlier one 'This is the Age of the Train' which looked at the major problems anyone trying to use trains in the UK faces. I read an article yesterday about screw-ups on the computer system which mean if you have bought a card to give you discounts, say for travel in a region, you actually end up paying more!
Well, leaving trains aside for the moment, I am going to turn to utility companies. By this I mean electricity, gas, water, sewerage, telephone, broadband, cable and satellite television providers. Throughout the 1980s in line with the policy of privatisation all of these services which had been state or local monopolies were either privatised in themselves, e.g. British Telecom the state telephone provider became BT, the private company or their services were taken over by a combination of such companies and others that had been set up as private companies, for example, where I live with have Southern Electric (who also now supply gas) which was once a state-run regional electricity provider and Utility Warehouse which was established as a private company. The idea was that moving away from state monopolies would introduce competition into the system and this would reduce prices to consumers and mean that those providing the best service would win out. How wrong the theorists proved to be. Rather than any decent company taking over services we seem to have gathered together the most arrogant and avaricious people on the planet to provide us with our essentials.
If I had been writing this post 1-2 years ago I would have been even more indignant as in those years gas and electricity prices were rising two or three times per year, often at above 10%, so triple the level of inflation, and actually pushing that inflation higher because utility bills form such a part of people's monthly expenditure. All the companies, good and bad, have been making profits of millions of pounds and finally are bowing to pressure and lowering the prices, but as yet they still have a long way to go to their previous levels. In 2002 23,000 UK households had their utilities cut off. It was estimated that 1.4 million could not afford to put money in prepayment meters for their electricity and gas; 1 million homes had had their telephones disconnected and 4.7 million households were in debt to water companies (these are households not individual, so, say a family of 4 is affected in each case we could be looking at almost 20 million individuals affected because they or their parents cannot pary). Obviously a lot people appearing in these figures are the same people, but these are old figures and with prices rising since then, I imagine close to 1 in 10 of the households (many of these will be single elderly people, but many others will be families). These items are not luxury items, they are essentials for health and wellbeing. You can argue that telephone is not essential, but what happens if you are an elderly person who slips up, how do you get help? How do apply for a job when you have no number for employers to call you back on?
I am comfortably off, I have a job that pays £8000 more per year than the national average, and yet I find it tough to pay my utility bills. There are issues that are not simply about the cost, but about the whole behaviour of utility companies. The first is paying in advance. Now on my gas, electricity, water and sewerage (and for some reason in my town we have separate water and sewerage companies and whilst elsewhere my sewage removal charges have been 10% of my water bill, in this town, for some reason they are 108%) I am assessed for my likely usage and have to pay in advance. For gas I am now paying for the next three months gas that I have not even used yet and in fact given that summer is coming and we run to very ecological/economical rules in my house I doubt we will use that much. So 3 months' worth of money for supplies I am unlikely to use until the Winter, is now sitting in the gas company's bank account gathering interest. The same happens with the telephone company for 1 month in advance (I am not going to name the names of the companies as the principle applies to all of them, if someone can tell me a UK company that does not behave like this, I am happy to name them. Bascially if you live in the UK you will find your utility providers all do this, the details may vary, it might be 1 month or 3 months in advance, but the behaviour is the same).
The additional problem with all this, is that not only do they hold your money for things they have not provided you yet, they always over-assess how much you are going to use. When I lived alone I was always assessed as if I was a family. In one month the water company in Milton Keynes sent me three different paying in books with different amounts as they could not make up their mind about me. This means when I leave a town I each company has to pay me back a lot of money, e.g. £100 (€145; US$ 200) from the phone company, £134 from the gas company, when I left Milton Keynes and of course they are in no hurry to do this. What do the companies do with the money? Invest in other ventures, hotels are apparently popular investments for water companies at a time when leakages in the UK are at 25% on average compared to 14% in France and 10% in the Netherlands. You cannot stop leakages but the UK water companies are lax in tackling them and would prefer to put bans on water usage. We should be economical in our usage of water for the sake of the planet, but how can I be economical if a quarter of the water I am paying for in advance has gone before it reaches my house?
The final element which makes the utility companies such a burden on British people is their lack of customer service. Again, there have been some changes. The big uproar has been about moving telephone call centres to places like India. Much of the charges set against these have simply been on racist grounds, but that misses the entire point. It does not matter where a call centre is located if the person on the other end of the telephone cannot help you; it could be in a building in the same street as your house and still not do the job. I will just outline some of the problems. First you have contracts which tie you in for months or years. You have no choice over these, you have to take what is offered. I move house on average every 16 months, and typically I am still paying for utilities at the old house for 1-3 months after I have left it (and by then there are other occupants also paying for the services); for this cable television (compulsory in Milton Keynes, where, as a new town television aerials were banned) is the worst. Telephone companies especially ones providing mobile (a.k.a cell phones in the USA, handies in Germany) 'phones are also bad.
The next thing is if you have something wrong with your service. The new companies just supply the commodity and are not responsible for how it gets to your house; e.g. BT actually oversees all telephone cables in the UK; Transco oversees all gas pipes no matter what company actually provides your telephone or gas. So often if the fault is technical the provider cannot help. The company who provides the link, the pipe or whatever will often charge to check if it is something they are responsible for or not; BT charge £160 (€233; US$320) to do this.
Aside from all that, whenever you call a utility company as with all interaction on the telephone these days you have to wait and wait (if your employer lets you call during the day) and press a combination of buttons and then keep repeating your story to different people. Do not believe what you are told. The people in call centres do their best but are poorly trained and have to navigate a maze of rules that are often confusing to everyone. Moving to a new house, we booked two weeks in advance to have our telephone connected, but arriving there it had not been and it was not for a further six weeks, so eight weeks in total. The previous occupants had left without telling any utility company; their telephone had been paid for by their employers and in the end we had to contact those employers and tell them to stop paying for it (the occupants had gone to the USA) before we could have our phone connected. Now, this problem had been apparent to the phone company immediately and on all of the times we had phoned, we had been given conflicting advice each time ranging from 'you have no phone line running to the house', 'the phone line does not belong to us', 'you can be connected in 28 days' to 'you can be connected this afternoon'. The work to be done was lodged each time and encountered an error but no-one contacted us to tell us what was happening. Of course in all this time we were paying for a service we did not have. This is one small example, do not get me started on the gas and electricity for which two separate companies tried to bill us for our usage.
The household I live in is robust and patient and has jobs that allow you to take time out to sit on the phone for a couple of hours; many people in the UK are not so lucky as us. We are all faced by very slow service, an arrogance that we should know precisely what to do (do not ask me to explain any of the bills, they are bewildering and I spent 9 years at university), and if we do what they ask they are not obliged to provide us with a service; even one we are paying for in advance.
The UK government wanted Britain to be the leading country for broadband coverage and in the early 2000s it seemed that that was possible. Now, however, it is clear that the UK is lagging behind countries such as South Korea, not only in the percentage of the country covered but in the speed of the service provided. Why is this? It is not that there is no demand for broadband, it grows daily, it is because the companies are more concerned every last pound out of consumers and tying them into such difficult contracts that they cannot upgrade or transfer. Privatisation was supposed to promote competition and thus efficiency, instead the UK has large cartels working to the lowest common denominator. Not only is their utter greed and absolute arrogance holding Britain back from developing to meet competition, it is also haunting the lives of the bulk of the UK population and in millions of homes denying them basic supplies.
Well, leaving trains aside for the moment, I am going to turn to utility companies. By this I mean electricity, gas, water, sewerage, telephone, broadband, cable and satellite television providers. Throughout the 1980s in line with the policy of privatisation all of these services which had been state or local monopolies were either privatised in themselves, e.g. British Telecom the state telephone provider became BT, the private company or their services were taken over by a combination of such companies and others that had been set up as private companies, for example, where I live with have Southern Electric (who also now supply gas) which was once a state-run regional electricity provider and Utility Warehouse which was established as a private company. The idea was that moving away from state monopolies would introduce competition into the system and this would reduce prices to consumers and mean that those providing the best service would win out. How wrong the theorists proved to be. Rather than any decent company taking over services we seem to have gathered together the most arrogant and avaricious people on the planet to provide us with our essentials.
If I had been writing this post 1-2 years ago I would have been even more indignant as in those years gas and electricity prices were rising two or three times per year, often at above 10%, so triple the level of inflation, and actually pushing that inflation higher because utility bills form such a part of people's monthly expenditure. All the companies, good and bad, have been making profits of millions of pounds and finally are bowing to pressure and lowering the prices, but as yet they still have a long way to go to their previous levels. In 2002 23,000 UK households had their utilities cut off. It was estimated that 1.4 million could not afford to put money in prepayment meters for their electricity and gas; 1 million homes had had their telephones disconnected and 4.7 million households were in debt to water companies (these are households not individual, so, say a family of 4 is affected in each case we could be looking at almost 20 million individuals affected because they or their parents cannot pary). Obviously a lot people appearing in these figures are the same people, but these are old figures and with prices rising since then, I imagine close to 1 in 10 of the households (many of these will be single elderly people, but many others will be families). These items are not luxury items, they are essentials for health and wellbeing. You can argue that telephone is not essential, but what happens if you are an elderly person who slips up, how do you get help? How do apply for a job when you have no number for employers to call you back on?
I am comfortably off, I have a job that pays £8000 more per year than the national average, and yet I find it tough to pay my utility bills. There are issues that are not simply about the cost, but about the whole behaviour of utility companies. The first is paying in advance. Now on my gas, electricity, water and sewerage (and for some reason in my town we have separate water and sewerage companies and whilst elsewhere my sewage removal charges have been 10% of my water bill, in this town, for some reason they are 108%) I am assessed for my likely usage and have to pay in advance. For gas I am now paying for the next three months gas that I have not even used yet and in fact given that summer is coming and we run to very ecological/economical rules in my house I doubt we will use that much. So 3 months' worth of money for supplies I am unlikely to use until the Winter, is now sitting in the gas company's bank account gathering interest. The same happens with the telephone company for 1 month in advance (I am not going to name the names of the companies as the principle applies to all of them, if someone can tell me a UK company that does not behave like this, I am happy to name them. Bascially if you live in the UK you will find your utility providers all do this, the details may vary, it might be 1 month or 3 months in advance, but the behaviour is the same).
The additional problem with all this, is that not only do they hold your money for things they have not provided you yet, they always over-assess how much you are going to use. When I lived alone I was always assessed as if I was a family. In one month the water company in Milton Keynes sent me three different paying in books with different amounts as they could not make up their mind about me. This means when I leave a town I each company has to pay me back a lot of money, e.g. £100 (€145; US$ 200) from the phone company, £134 from the gas company, when I left Milton Keynes and of course they are in no hurry to do this. What do the companies do with the money? Invest in other ventures, hotels are apparently popular investments for water companies at a time when leakages in the UK are at 25% on average compared to 14% in France and 10% in the Netherlands. You cannot stop leakages but the UK water companies are lax in tackling them and would prefer to put bans on water usage. We should be economical in our usage of water for the sake of the planet, but how can I be economical if a quarter of the water I am paying for in advance has gone before it reaches my house?
The final element which makes the utility companies such a burden on British people is their lack of customer service. Again, there have been some changes. The big uproar has been about moving telephone call centres to places like India. Much of the charges set against these have simply been on racist grounds, but that misses the entire point. It does not matter where a call centre is located if the person on the other end of the telephone cannot help you; it could be in a building in the same street as your house and still not do the job. I will just outline some of the problems. First you have contracts which tie you in for months or years. You have no choice over these, you have to take what is offered. I move house on average every 16 months, and typically I am still paying for utilities at the old house for 1-3 months after I have left it (and by then there are other occupants also paying for the services); for this cable television (compulsory in Milton Keynes, where, as a new town television aerials were banned) is the worst. Telephone companies especially ones providing mobile (a.k.a cell phones in the USA, handies in Germany) 'phones are also bad.
The next thing is if you have something wrong with your service. The new companies just supply the commodity and are not responsible for how it gets to your house; e.g. BT actually oversees all telephone cables in the UK; Transco oversees all gas pipes no matter what company actually provides your telephone or gas. So often if the fault is technical the provider cannot help. The company who provides the link, the pipe or whatever will often charge to check if it is something they are responsible for or not; BT charge £160 (€233; US$320) to do this.
Aside from all that, whenever you call a utility company as with all interaction on the telephone these days you have to wait and wait (if your employer lets you call during the day) and press a combination of buttons and then keep repeating your story to different people. Do not believe what you are told. The people in call centres do their best but are poorly trained and have to navigate a maze of rules that are often confusing to everyone. Moving to a new house, we booked two weeks in advance to have our telephone connected, but arriving there it had not been and it was not for a further six weeks, so eight weeks in total. The previous occupants had left without telling any utility company; their telephone had been paid for by their employers and in the end we had to contact those employers and tell them to stop paying for it (the occupants had gone to the USA) before we could have our phone connected. Now, this problem had been apparent to the phone company immediately and on all of the times we had phoned, we had been given conflicting advice each time ranging from 'you have no phone line running to the house', 'the phone line does not belong to us', 'you can be connected in 28 days' to 'you can be connected this afternoon'. The work to be done was lodged each time and encountered an error but no-one contacted us to tell us what was happening. Of course in all this time we were paying for a service we did not have. This is one small example, do not get me started on the gas and electricity for which two separate companies tried to bill us for our usage.
The household I live in is robust and patient and has jobs that allow you to take time out to sit on the phone for a couple of hours; many people in the UK are not so lucky as us. We are all faced by very slow service, an arrogance that we should know precisely what to do (do not ask me to explain any of the bills, they are bewildering and I spent 9 years at university), and if we do what they ask they are not obliged to provide us with a service; even one we are paying for in advance.
The UK government wanted Britain to be the leading country for broadband coverage and in the early 2000s it seemed that that was possible. Now, however, it is clear that the UK is lagging behind countries such as South Korea, not only in the percentage of the country covered but in the speed of the service provided. Why is this? It is not that there is no demand for broadband, it grows daily, it is because the companies are more concerned every last pound out of consumers and tying them into such difficult contracts that they cannot upgrade or transfer. Privatisation was supposed to promote competition and thus efficiency, instead the UK has large cartels working to the lowest common denominator. Not only is their utter greed and absolute arrogance holding Britain back from developing to meet competition, it is also haunting the lives of the bulk of the UK population and in millions of homes denying them basic supplies.
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