Affordability of utilities’ services: extent, practice, policy

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

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 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.

Bruno Liebhaberg, CERRE Director General:

“In the wake of the economic difficulties affecting many Europeans, the significance and added value of this CERRE study stem not only from its 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”.