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Open water -
How your business can leverage the water market

In 2017, the UK water supply and wastewater markets opened, allowing organisations to switch service suppliers further afield. The opening marked the largest opportunity for free trade since the markets were first privatised. Despite this, many businesses are still defaulting to their local suppliers. We explore why this is and the benefits switching can offer.

7 December 2020

Breaking new ground

Water is a primary need for every business, as is its disposal. The 2017 deregulation of these markets offered a universal opportunity for savings. Since they no longer hold geographic monopoly, suppliers must provide a more competitive service to retain their customers.

The deregulation meant a flip in the power balance between consumer and supplier.

However, studies conducted a year after the initial deregulation revealed only 38% of businesses were aware that they had the option to switch. In 2019, the Consumer Council for Water (CCW) found that satisfaction with water services was falling – especially for commercial users.

At the time of its study, satisfaction had dropped to 87% in England, with only 7 in 10 businesses content with the service they were receiving.

Compared to 2016, two years before deregulation, the figures are a stark contrast, with commercial trust in water companies falling to just over a quarter since then.

Despite this decline in consumer experience, at the time only 1 in 5 businesses that were aware of deregulation had actually switched their supply.

Outsourcing your savings potential​

The procurement and negotiation of utilities contracts is a complex process at the best of times. Electricity, gas, and telecoms have been open for years and are familiar to those used to negotiating with would-be suppliers. The water market is still relatively fresh ground, when it comes to a change in supply.

The fear is often that the complexity of the process might bog down whoever attempts it. This could result in restricting their involvement in day to day operations.

Fortunately, as with other utility negotiations, this task can be delegated.

Appointing a team that specialise in such analysis, means that your business can reap the benefits of a competitive water market. Moreover, you can focus on regular operations without having to babysit the process.

It may be tempting to maintain the simplicity of a known supplier but the lost savings potential can be significant. Bear in mind that in the first year of water deregulation, 40% of business consumers who had switched reported either financial savings or other indirect benefits.

Smith Bellerby provides a comprehensive procurement service. We obtain a thorough understanding of your water needs and track tariff changes in real time to secure you get the best prices possible. To find out how you can benefit from the deregulated water market, get in touch.

Josh Ellison
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