DWP are allowing water companies to target poorest communities

The results are in – and surprise, surprise Northern communities are bearing the brunt of water companies capitalising on the Department for Work and Pensions (DWP) Universal Credit deductions scheme.

As the Canary previously revealed, across 18 months, water firms robbed welfare claimants of £32.4m in Universal Credit.

However, the scale of individual water firms milking this punitive DWP debt clawback mechanism has been a mystery – until now.

Using a combination of publicly available data and Freedom of Information (FOI) requests, the Canary has been able to calculate ballpark figures revealing the likely biggest culprits snatching millions in welfare from some of the poorest households.

And among privatised providers engaged in routine sewage dumping, rampant profiteering, and opportunistic bill hikes, certain companies stood out as clear exploiters of this DWP deductions regime.

DWP Universal Credit deductions: the water companies cashing in

Unlike other services, monopoly suppliers dominate by location. What this means is that water companies serve fixed regional areas. Thanks to this, the Canary was able to estimate how much each company might have taken in UC deductions. However, there are a number of significant caveats to the following data, explained here.

Through an FOI, the Canary acquired UC deductions data for every parliamentary constituency in England and Wales. The data spans the 18 months between March 2024 – August 2025.

However, water company coverage does not exactly match up with regional boundaries. This meant we had to use water company parliamentary constituency data to collate the FOI information into our own dataset. Once we had this, we could make estimates for each water company:

So in total, constituencies that the regional water monopolies cover accounted for approximately £28.7m. However, it’s important to note that this will include significant double-counting, since suppliers will crossover in some constituencies.

Together, these regional companies supply water services to 30,099,891 postcodes. Small new entrant companies account for the remaining 159,524.

The most reliable data we have

Then, if we estimate deductions for the joint water and sewerage suppliers only, excluding parliamentary constituencies where the water company was different to the sewerage company, we get the following:

The above data was complicated by the fact that companies wouldn’t always cover the same number of postcodes for water services versus sewerage in any one given constituency.

As such, we only used data wherever sewerage postcodes were within 10% of the number of water postcodes.

The bottom line all this speculative data underscores is that it’s hard to know with any certainty how much each of the major water companies is extracting in Universal Credit deductions.

The key culprits

Nevertheless, the tentative estimates still provide a general idea of which companies are cashing in at welfare claimant’s expense.

United Utilities appears the most prolific user of the deductions regime by some margin. For a start, the company seems to make up the largest chunk of the £32.4m in deductions. Under all calculations, United Utilities nabbed somewhere north of £9m in Universal Credit. Moreover, even proportional to the number of postcodes it covers, the company is the clear forerunner.

In January 2025, regulator Ofwat greenlit United Utilities hiking customer bills by 32% over the next five years. Since it began raising bills in April, it has seen a 131% profit surge.

Meanwhile, Yorkshire Water and Northumbrian Water extracted the next largest sums from customer’s Universal Credit. At more than £2.95m and £2.65m respectively, the two northern utility giants also ranked high as a proportion of the postcodes they covered. For Yorkshire Water, it came in fourth behind United Utilities, Northumbrian in second place, and Dwr Cymru in third place as a ratio of deductions to the postcodes they supply services to.

In October 2025, Northumbrian Water was among five companies that lobbied the Competition and Markets Authority (CMA) for further bill hikes. The company had already secured permission in January to increase bills by 21%.

And of course, Ofwat slapped both United Utilities and Yorkshire Water with boss’s bonus bans in November. These were due to category 1 pollution incidents in 2024. In Yorkshire Water’s case, it was also down to its “serious failures” over sewage, which had resulted in “excessive spills”.

So as these companies provided atrocious services and mass polluted watercourses, they were also running roughshod over some of their poorest customers.

Northern water utilities running roughshod over welfare claimants

What’s immediately noticeable here is that, with the exception of Dwr Cymru, the biggest culprits are the companies administering water and sewerage in the North.

It tallies with broader statistics on Universal Credit deductions. During the same 12-month period, the North East had the highest number of Universal Credit households where the government or third parties had made one or more deductions. Specifically, it stood at 53%.The North West followed this, at 50%.

The North East (21.5%) and North West (20.2%) also has the highest number of highly deprived neighbourhoods in England. On the one hand, the high levels of deprivation offer an explanation for the significant scale of water debt. This is because, it logically follows that more people would be experiencing debt thanks to state-sanctioned poverty. However, on the other, it points to water companies and their extortionate bill hikes exacerbating the problem. And of course, eating into customer’s social security will also only compound this deprivation further.

Ultimately, the key point is that going after some of the poorest customers for outstanding payments is a choice. Water companies reporting mega-profits aren’t strapped for cash – and could easily take the hit. These unscrupulous firms are robbing welfare claimants of their social security to fund eye-watering shareholder dividends and executive pay packages. This needs to be recognised for the absolute scandal it is.

As ever, the most marginalised – particularly Northern – communities are bearing the brunt of this egregious cost of greed crisis fuelled by the DWP. This data shows clearly that it’s one in which the privatised water racket is undoubtedly playing a significant part.

Featured image via the Canary