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What’s happening in the water market?

In April 2017, we saw the biggest change to the non-domestic water sector in decades as the market opened to competition. Businesses in England now have the power to choose their water supplier for the first time.

At Inenco, our water team has been busy helping businesses to review their existing contracts and either renegotiate with their current supplier, or switch to a better supplier for their business. They have seen how the market has already evolved and they know what to look out for in 2018, so we sat down with the team to get an update on what’s happening in the water industry…

What’s happened in the market so far?

We’ve seen a consistent level of switching since April – in the first six months of the market, over 61,000 supply points switched. While it’s good to see that businesses are switching, with 27 million supply points in the market, only around 2.3% had switched by September 2017. While we expect this to have increased slightly since September, it’s clear that most businesses aren’t rushing to switch.

We’ve also found that many businesses are experiencing customer service issues. Suppliers are taking a long time to fulfil simple requests, such as a change of tenancies or basic requests for information. While teething issues are to be expected in any new market, many customers are yet to see the improvement in customer service we anticipated that suppliers would provide in order to encourage customers to switch.

Customers should also be aware that some water retailers are changing their billing process. We have seen that some suppliers are now charging in advance based on forecast usage figures, which is a first for the non-domestic water industry. This could potentially cause issues with forecasting, budgeting and any tenant for recharging practices.

Businesses that are facing issues with their water supplier can really benefit from the support of a consultancy like Inenco – our industry expertise means we’re best placed to help customers navigate the new market.

What will 2018 hold for the water sector?

It will be really interesting to see what happens in the next 12 months. So far, the majority of those businesses that have made the switch are those with large multi-site portfolios – we haven’t seen significant movement among SMEs or manufacturers. We’re keen to see whether suppliers will shift their focus to improving their added value services, such as consolidated billing, in order to entice these customers to switch.

It’s unlikely that we’ll see any significant customer discounts until PR19 takes effect in April 2020, but as Ofwat is encouraging suppliers to become more resilient, innovative and provide enhanced customer service, we’re hopeful that suppliers will spend the intervening years working on improving their customers experience.

How can businesses ensure they benefit from the new market?

While suppliers are unlikely to drop their prices in the next few years, businesses don’t have to wait for PR19 to see a reduction in their water bills. As water is increasingly falling under the remit of the energy manager, we recommend that they carry out regular water audits to ensure that they are managing their water efficiently. External support can be really useful when it comes to undertaking a fully comprehensive report – Inenco’s audit service, for example, includes a full on-site survey and we’ll also ensure that customers are fully compliant in areas like trade effluent consent.

Businesses can also benefit from switching their supplier, as while they might not be able to make big savings just by switching, finding a supplier that’s right for their business can make a real difference. Again, consultants can be particularly useful to businesses looking to switch as we have a full, unbiased view of the market and can give well-informed recommendations. We’ll also manage the entire switching process for our customers from start to finish so they can concentrate on their core business activities.

Next steps

At Inenco, our water team has been helping organisations of all sizes to manage their water costs for over 20 years. We can assist you to optimise your water strategy, making the most out of switching supplier – to speak to one of our experts, call 08451 46 36 26 or email