Press Releases 2009

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WICS publishes its Annual Report for 2008-09

10 June 2009

ANOTHER GOOD YEAR FOR SCOTLAND’S WATER INDUSTRY:

  • Scotland’s pioneering retail water market now likely to be extended south of the border
  • Scottish Water continues to improve its levels of service but worries remain on its investment delivery
  • Commission recruitment of top talent has strengthened its ability to regulate effectively

The Water Industry Commission for Scotland (WICS) today launches its Annual Report for 2008-09 which summarises the regulator’s main activities and achievements of the last year.

Customers are already benefiting from competition

The report demonstrates that the introduction of competition into the Scottish water and sewerage market in April 2008 has resulted in better value for Scottish businesses.  The report highlights that around one third of businesses and public sector customers in Scotland have renegotiated their existing retail package or switched supplier since the introduction of competition to the market. Customers can currently choose between a range of suppliers and WICS expects more new players, both large and small, to enter the market. Each new entrant brings more choice and more innovative solutions to customers.

The competitive market has already resulted in overall savings of £4 million. But customers should continue to challenge their current or alternative suppliers to offer them a better deal.

Our environment is benefiting from competition

The annual report explains that the benefits of competition are not only financial.  Bespoke environmental advice and solutions are being offered by suppliers, along with an increased commitment to water-saving measures such as toilets flushed with rainwater and automatic taps.  Solutions such as these are already helping businesses – from supermarkets to fish farms – to reduce their water consumption.  For example, the introduction of Business Stream’s ‘Smart Meters’, which record meter readings and flow rates remotely, significantly supported supermarket giant Tesco in meeting its water consumption targets and improving efficiency.

Our draft conclusions on charges will be published shortly

At the end of this month, WICS will announce draft charge caps on water and sewerage bills for the next several years. Charges will benefit from the progress that Scottish Water has made in reducing its operating costs. 2007-08 was the fifth year in a row that costs had fallen. They are now around 40 per cent lower since Scottish Water was established in 2002, resulting in a saving of more than £3 million a week for customers.   Household customers will also benefit from the additional cost savings identified during the introduction and operation of the new competitive market – even if they cannot choose supplier.

WICS also confirms that Scottish Water has made significant improvements to the service provided to its customers.  Using a points-based performance scoring system (the OPA), WICS set Scottish Water a target of a 40 per cent improvement to its customer service for the period 2006-10.  It appears that Scottish Water will have exceeded the level of service performance that it was challenged with by the end of next year.

Sir Ian Byatt, Chairman of the Water Industry Commission for Scotland, said; “I am pleased to report that Scottish Water has continued to respond well to regulatory and other challenges.  It is a public sector success story that may have lessons for other parts of the Scottish public sector.

"It is just over a year since the retail market was opened up to competition for business and public sector customers.  Competition has also been good for the environment.  Today, suppliers are offering bespoke environmental advice and solutions, along with an increased commitment to water saving measures and leakage reduction."

Alan Sutherland, Chief Executive of the Water Industry Commission for Scotland, said; “When we first put forward our proposals for competition, many could not imagine them coming to fruition.  Developments in Scotland – and now proposed for south of the border – have brought those seemingly pioneering ideas into the mainstream, and Scottish businesses are the first to enjoy the results."

Strengthening the team

From our small office in Stirling we are responsible for regulating an industry with an annual turnover of more than £1 billion that provides a vital service to the Scottish people. This year we stepped up our recruitment in order to attract a much wider pool of suitably qualified candidates. We are employing a number of new analysts who will bring their expertise and new approaches in the areas of market frameworks, business strategy and financing.

ENDS

To download a copy of the report please visit www.watercommission.co.uk or email [email protected]

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

For more press information please contact:

Julie Fourcade or Emma Ap-Thomas, 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 overall 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.  To find out more about the Strategic Review of Charges 2010-14, visit the ‘Future prices’ section of our website www.watercommission.co.uk

2. Since 1 April 2008, all business customers and public bodies, such as local authorities, hospitals and schools are eligible to switch water supplier. The framework for competition is set out in the Water Services etc. (Scotland) Act 2005. The 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.

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