Water costs set to drop as business market is opened up

14 March 2017

Businesses in England and Wales will soon be given a choice of water supplier in a move the government hopes will cut costs and improve efficiency. 

The opening up of the water market for business customers on 1 April will give an additional 1.2m businesses, charities and public sector organisations choice over their suppliers. The extra competition in the market is expected to bring £200m of benefit to the UK economy, the water regulator Ofwat said. 

Business will be able to save money by choosing suppliers that can consolidated billing or improved metering and water efficiency, said Helen Robinson, a spokeswoman for Ofwat.

Under the current system a firm with multiple sites across a region will pay a separate bill for each. “Under the new system you could pick one retailer, and that one retailer would make sure you have only one bill… You’re going to save time and effort and money,” said Robinson. 

Other water retailers are already positioning themselves as specialists in water efficiency and recycling, she added.

The new market will work in a similar way to other utilities. Regional water providers will act as wholesalers, with prices regulated by Ofwat, and continue to provide water treatment and maintaining pipes and infrastructure. Retailers will buy these services and sell them onto business customers, competing over metering, billing and other customer services.

The changes are part of the Water Act 2014 and apply only to England and Wales. While most businesses will be eligible to pick their provider, firms have been advised by Ofwat to check with their current supplier if in doubt.

Under the system that is being replaced only businesses buying more than 50m litres of water a year at a single site were able to choose their water supplier. This limited the choice to a few firms mostly operating large manufacturing sites.

Scotland already has a market for water suppliers to business.

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