Affordability of utilities’ services: extent, practice, policy

21.10.2015

“Keeping utilities’ services affordable: policies need local knowledge and robust evaluation”, a new CERRE study recommends.

The affordability of utilities – the costs of using energy, water, transport and telecoms – is a major issue on European policy agendas. It is increasingly clear that the economic crisis has impacted on many citizens‘ ability to pay their bills. While there is no easy fix to this challenge, a major new CERRE study on the affordability of utilities’ services moves the debate forward with in-depth findings and recommendations for tackling affordability concerns.

Drawing on the unique opportunities offered by CERRE to explore the issue and policy options across the utilities sectors and across the European Union, the study brings together for the first time a wide variety of data. It combines extensive country- and household-level data analysis with literature reviews and stakeholder interviews.

The core findings and recommendations of the study, co-authored by Professor Catherine Waddams, a Joint Academic Director of CERRE and Professor at the Centre for Competition Policy and Norwich Business School, and Dr David Deller, a Research Associate at the Centre for Competition Policy at the University of East Anglia, are:

  • Affordability issues vary widely, in type, in extent, between sectors and across Member States. Differences between ‘old’ and ‘new’ Member States are particularly stark. Consequently, policies to address these issues vary – and should continue to vary – across Member States. Local knowledge is crucial to the successful implementation of policies.
  • However, Member States could benefit from enhanced information and experience sharing, including a centralised repository of information and statistics about affordability issues in different sectors across the EU.
  • The measurement of affordability difficulties is critically important. Some commonly used metrics may lead to the pursuit of inappropriate policy options or to targeting efforts at those who are easy to help, over those who need most help.
  • To maximise results and avoid ineffective or inefficient programmes, policy choices must be based on realistic forecasts of individual behaviour and household response.

Professor Bruno Liebhaberg, Director General of CERRE, says: “In the wake of the economic difficulties affecting many Europeans, the significance and added value of this CERRE study stem not only from the latter's in-depth examination of the extent of the affordability challenges but also from its assessment of the true effectiveness of a wide variety of existing policies put in place to deal with the problem as well as from its recommendations for the future.

 
Authors: 
 
- Professor Catherine Waddams
  (CERRE and Centre for Competition Policy, Norwich Business School)
 
- Dr David Deller
  (Centre for Competition Policy, University of East Anglia)
 
 
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