England’s water market to open to competition

More than a million English businesses will be able to choose their water supplier for the first time after new legislation was passed to bring competition to its £2bn market.
The Water Bill was granted Royal Assent on 14 May, providing English non-domestic customers with choice over their water supplier, with the aim of improving customer service and water efficiency.
In Scotland, the non-domestic water market opened to competition in April 2008, and since then customers have saved more than £36m from their water bills by reducing the volume of water they use. More than £30m of discounts have also been taken up by customers.
Mark Powles, chief executive of Business Stream – a Scottish-based water services company that already operates in England – said the legislation would force water companies to improve their services towards customers or face losing market share.
The new market in England is scheduled to open to all customers in April 2017. At the moment, only the very largest users of water – sites consuming more than 5 million litres a year – can switch supplier.
Mr Powles said: “The important point about retail competition is that what happens at a network and infrastructure level shouldn’t affect the service the customer receives at the retail end. If this market is successful then in a few years we’ll hear customers saying they’re getting a better deal than they are now, that they’re more aware of the role water plays in their businesses, and they feel more in control of the service they receive.”
Currently England’s water market is split into regional monopolies, with the existing market structure allowing very little scope for customers to exert pressure on suppliers to tailor the services they provide.
Under the competitive market, though, a business with several sites across the country could switch all of them to one supplier, benefiting from associated economies of scale across billing and administration, as well as driving significant value from services like water efficiency initiatives and trade effluent management.
Mr Powles said: “This shouldn’t be about Royal Assent and then nothing for three years. We’ve spoken to lots of customers who don’t feel as if they’re getting value from their regional suppliers, but can’t do anything about it.
“This legislation should be seen as an opportunity for customers to put themselves in the driving seat now, so that when competition does kick in, they’re in a position to know exactly what they want and expect from their water company – and that’s bound to be more than just a bill.”


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