Press Releases 2009

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Scottish businesses pouring money down the drain

02 February 2009

  • Many businesses already benefitting from competition in Scottish water industry
  • Five million pounds of water bill savings are yet to be claimed

Scotland’s businesses are losing out on collective savings of up to five million pounds every year by not reviewing their water supplier, according to a report launched today by the Water Industry Commission for Scotland (WICS). 

In a world first, Scotland launched a competitive water and sewerage market for business customers in April 2008, and thousands of businesses across the country are already benefitting from the cost savings and environmental benefits of competition. 

However, today’s report shows that, nine months on, two-thirds of non-domestic customers have yet to review their water and sewerage provider, leaving millions of pounds worth of savings unrealised.

WICS is now urging businesses to make the most of the savings available to them. Alan Sutherland, Chief Executive of WICS, says:

“Competition has been introduced into Scotland’s water industry so that non-domestic customers can get the best possible deal on their water bills. We’re pleased to see that in only nine months, around one-third of Scotland’s businesses have already benefitted. 

“However, many more businesses are being left out of pocket by failing to explore the new choices open to them. Switching supplier or renegotiating your business’ existing package is a straightforward way to reduce your water bills, and given the economic circumstances, there’s never been a better time to explore the options.”

Since the introduction of competition, businesses of all sizes have been able to choose a water and sewerage supplier that best meets their needs.

By ‘shopping around’ and considering a number of different packages, businesses - from family-run corner stores to conglomerates - have been able to negotiate better deals and tailored service for their water and sewerage provision.

The market operates in much the same way as in other utility services, where suppliers compete for consumers by offering them the best deal. In Scotland, providers can also reduce prices for their customers by finding ways to cut the costs of the wholesaler, Scottish Water.

Non-household customers can currently choose between four water providers, who buy wholesale from Scottish Water; Business Stream, Ondeo Industrial Solutions, Osprey Water Services and Satec. These providers are closely regulated by WICS to ensure that consumers benefit from the scheme. Further licences to provide water are expected to be awarded in the coming months, opening up even more choice to customers.

The benefits for non-household customers are not just financial - bespoke environmental advice and solutions are being offered by providers, along with increased commitment to water saving measures and leakage reduction. Environmental benefits have also been an attraction for businesses that have considered switching supplier.

In addition to competitive pricing, the new system has seen other advantages such as easier billing, improved quality and consistency of service, and fast reaction response.

Those looking to find out more about water competition or to download the report ‘Competition in the Scottish Water Industry’ should log on to www.scotlandontap.gov.uk.

Ends

For more press information:
- Claire Methven, Helen Prowse or Julie Fourcade, 3 Monkeys Communications, 020 7009 3100 ([email protected])
- Katherine Russell, WICS’ Director of Corporate Affairs, 01786 430 200

Notes to editors:

1. The Water Industry Commission for Scotland is the economic regulator of the Scottish water industry. It has a statutory duty to determine price limits for Scottish Water based on the lowest reasonable cost of achieving ministerial objectives for the water industry. In November 2005, the Commission determined price limits for water and sewerage services for the regulatory control period 2006-10. A document setting out WICS’ full determination is available at www.watercommission.co.uk.

2. Since 1 April 2008, all business customers and public bodies, such as local authorities, hospitals, schools etc are eligible to switch water supplier. The framework for competition is set out in the Water Services etc. (Scotland) Act 2005. The 2005 Act required WICS to establish a regime to license new entrants into the market, and facilitate the orderly opening of the market. It also required Scottish Water to establish a separate retail entity (now Business Stream) to serve non-household customers in Scotland.

3. End customer charges continue to be protected. All the water supply companies are obliged to offer customers a basic default level of service, for a default tariff determined by WICS. The default tariff is no more than the maximum charge customers would have paid to Scottish Water if competition had not been introduced. The increase in the default tariff will be, on average, less than the rate of retail price inflation until 2010.

4. The introduction of competition into the Scottish water industry has resulted in overall savings of £4 million in 2008, which was passed onto water providers and their customers.

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