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Utilities & Environmental

Big drops for water?

By 29th July 2015April 4th, 2019No Comments

Scotland – a world first

For obvious reasons, UK water companies have historically been regional monopolies. That began to change in 2008 when Scotland announced a world first in deregulating water and wastewater supplies for non-domestic customers. Scottish Water spun off its retail arm into a legally separate entity (Business Stream) who initially had 100% of the market. Despite this, by 2013 Business Stream claimed the efficiencies brought by deregulation had shown the following benefits:

  • £35 million+ in water efficiency savings
  • a 26% increase in customer satisfaction
  • made available £30m+ worth of discounts
  • saved public sector customers £20m+ in three years
  • saved customers 16 billion litres of water and 28,000 tonnes of CO2

Business Stream experienced only a slow erosion of their initial 100% market share, probably because the 12% wholesale/retail margin was insufficient to fund both a healthy profit and the intensive marketing and sales expenditure a competitor would incur. Keen to stimulate healthy competition the Water Industry Commission for Scotland has negotiated lower wholesale prices.

England follows suit

From 2011 onwards, English non-domestic customers who use more than five million litres per year/per site have been allowed to choose a supplier – this only affected 27,000 customers.  April 2017 will herald a big change when all English non-domestic users (business, charity and public sector) will be allowed to select both their water and waste water supplier from the UK’s 12 water & sewerage companies and 12 water-only companies. For multi-site customers (who have previously needed to manage accounts with a multitude of different water companies) the attractions of consolidated billing from a single supplier are obvious.  For single site customers the benefits might be less dramatic, although Business Stream’s data suggests useful savings in both money and water – if busy SMEs have the time and relevant expertise to finesse yet another cost category.