UK water market open to competition from Monday (3rd April 2017)
The UK water market is preparing to open for competition between suppliers this weekend. For the first time, more than 1.2 million businesses, charities and public sector organisations in England and Wales will be able to choose their supplier for water and waste services.
Scotland deregulated its water market for corporate customers in 2008. The UK Government believes opening the market for competition across Britain will improve customer service, reduce costs and raise innovation.
Andrea Leadsom, the environment secretary, said: “Opening the market is a historic milestone, paving the way for innovation and efficiency and giving customers the same choice over their water retailer as they currently have for their energy and other essential services.”
Billions of pounds of water contracts will be on offer to utilities, with the first major contract expected to be for the UK public sector, awarded to Crown Commercial Services, worth over £800m. High volume water users will be hopeful of securing a better price from suppliers once the market becomes competitive. Cathryn Ross, chief executive of industry regulator Ofwat, explained further, “the cost-benefit analysis which underpinned the reforms suggested a net benefit for the country of £200m from opening the water market.” “There was tale after tale of frankly below par customer service and that was probably the biggest single driver for the reforms,” Ms Ross added.
Multi-site operators will also be able to negotiate deals with just one supplier, avoiding extra unnecessary administration costs from separate regional billing.
Ms Ross is not concerned by fears awareness among small and medium sized enterprises is low, believing the benefits of competition will not just be limited to the UK’s largest firms.
“If you look at how competition progressed in Scottish market...SMEs have benefitted from competition. It did take longer but we are confidently expecting SMEs to become an attractive part of the market for some providers,” she said.
Plans to open up the market for domestic customers would, according to Ofwat calculations save households as much as £3 billion.