Water Bill passing set to bring competition to England’s £2bn water market

Businesses across the country will be able to choose their supplier of water and waste water services for the first time, with the long-awaited Water Bill granted Royal Assent last night (14 May).

The Bill, which spawned from the Water For Life paper published by Defra in 2011, will come into force in April 2017, bringing competition to the £2bn water market. Over one million English firms will have a choice over their water supplier, with the aim of improving customer service and water efficiency.

It’s a step-change from the existing market in England, whereby only the very largest users of water – around 27,000 businesses consuming more than five million litres a year – can switch supplier.

But the Bill’s passing takes much of its experience from Scotland’s market, which was the first of its kind in the world. The non-domestic Scottish water market opened to competition in April 2008, and since then customers have saved more than £36m from water bills by reducing the volume of water they use.

Mark Powles, chief executive of Business Stream, a major supplier of water and waste water services, believes the replication of this new legislation in England will force more water companies to improve their services towards business customers or face losing market share.

“Competition delivers tangible benefits and the market in Scotland can point to plenty of notable success stories,” said Powles. “There’s every reason to expect customers in England will be able to use the choice they’ll have to drive the same kind of benefits.

“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.” 

Act now

Under the new competitive market, 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.

Mark Powles says businesses should now examine the water services they receive and consider what efficiency savings could be made. “This shouldn’t be about Royal Assent and then nothing for three years,” he added. “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 because they don’t use enough water to switch right now.

“The passing of 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.”

Last month, edie featured an article from Powles’ colleague, Ian Hewson, who explained how the Water Bill can make businesses more sustainable. Read that feature here.

Luke Nicholls

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