The countdown towards the deregulation of the English Water market is finally over. In this blog article, we will have a look at the benefits and opportunities the so-called ‘Open Water’ programme brings to businesses of all shapes and sizes in England – and Scotland.
The Scottish Case
The deregulation of the water market has already been field-tested and proven successful in Scotland. 9 years after the deregulation took place, businesses across Scotland are spending £65 million less on water consumption; £125 million of savings could be realised by 2021. Approximately 50% of Scottish businesses have switched suppliers since the opening of the market, typically with savings of 10-20%.
From an environmental perspective, the move has also been a success with deregulation leading to more than 28,000 tonnes of carbon savings.
Profile of the Scottish Water Market:
- 22 licensed providers (more than 20 applications in England)
- 130,000 non-domestic customers (1.2 million in England)
- £330 million market value (£2.5 billion in England)
Empowering Business Owners
The first and most pertinent benefit of deregulation is that it will empower business owners by giving them complete freedom to negotiate their own water package and find the best value for money on the open market. Over 1.2 million non-domestic customers across England will be free to choose their water and waste supplier. So far, there have already been more than 20 license applications from suppliers.
The competitive environment and the negotiation power of the end-user should ultimately lead to significantly lower costs.
“Competition has made water a much more mainstream business issue, which has had clear financial and operational benefits for many customers. The money customers save on water bills can be reinvested, making it a very sustainable way to reduce costs.” Mark Powles – Former CEO of Business Stream
While industry experts are somewhat cautious about the cost savings smaller English businesses can expect in the short to medium term, the move is still an important step forward and will bring real benefits to English businesses in the long run. The industry has projected £750 million of savings for non-domestic English water customers.
Increasing customer service
Secondly, by opening the market and breaking down the monopoly on water, customer service should see positive changes as suppliers need to better cater to their customers’ needs to ensure repeat business. Over time this should lead to increased innovation, benchmarking of the best practices and new entrants to ensure the industry leaders are kept on their toes and push the customer experience forward. Indeed, since deregulation took place in Scotland surveys have shown a 26% increase in customer satisfaction – pushing competition in the English market should lead to similar improvements for the customer.
For the larger businesses with multi-site operations there will be a welcome reduction of their billing headaches – instead of having separate bills and accounts for each property there will be a singular billing for all sites.
“The advantages are not just about lower bills. We think there is genuine potential for rivalry to enhance client benefit, create new offers and advancements and make clients’ lives somewhat less demanding” – Cathryn Ross, Ofwat
Business owners in England should not just wait and see where the deregulated market is going – now is the time to take action. An experienced consultant can help you renegotiate with your supplier or find the right deal for your business needs elsewhere.
If you are a Scottish business and have not taken advantage of the competitive market in Scotland yet, it is your time to act, too! Many suppliers to the Scottish market will now be competing south of the border, and new market entrants are expected to compete both in England and Scotland. This is also expected to benefit Scottish customers with more competitive rates and service.
Having been in the deregulated Scottish market since the very beginning, eyebright have gained extensive experience and knowledge of the water market and achieved significant savings for businesses across Scotland. Our service includes an analysis to determine if you are being billed correctly and ensure that you get the best rates on the market. We can do the running to initiate and complete any necessary switchover – you will not have to change physical equipment or the pipes or drainage system on site.