Press Releases 2009

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WICS Responds to Cave review

27 April 2009

The Water Industry Commission for Scotland (WICS) welcomes the findings of Professor Martin Cave’s ‘Independent Review of Competition and Innovation in Water Markets’ in England and Wales (22 April 2009).

The Review finds against the setting of a retail threshold for businesses to qualify for choosing water supplier, and recommends the step-by-step introduction of retail competition for all non-domestic customers.

Alan Sutherland, Chief Executive of the Water Industry Commission for Scotland, commented: “This report makes a highly valuable contribution to how customers and the environment can benefit from competition in the water industry.

“We believe this will offer best value for businesses of all sizes both north and south of the border and we now look forward to DEFRA’s consultation on the retail competition package and to seeing the final Floods and Water Management Bill, which will set out in detail how the Government intends to take forward the Review’s recommendations.”

Cave’s review and recommendations follow the example set by Scotland in April of 2008 whereby businesses in Scotland can now choose from one of four water licences as to who supplies their water and sewerage services.  Scotland was the first country in the world to introduce such a choice and one third of businesses in Scotland have changed, reviewed or renegotiated their supplier as a result of the introduction of competition.

As well as providing businesses in England and Wales with cost savings and environmental benefits, WICS believes a competitive water industry in England and Wales will have a positive impact for customers north of the border as new suppliers in England and Wales may also enter the Scottish market.  GB-wide competition will lead to a more sophisticated market for licences and as such WICS supports the step-by-step introduction of competition for businesses across Great Britain.

ENDS

To find out more about the new competitive landscape for businesses and public sector bodies visit www.scotlandontap.gov.uk

For more press information please contact:

Jeremy Hay-Campbell 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.
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