Scotland's businesses reap the rewards of five years of water competition

Posted: Wednesday 1st May 2013

England in line to create full competition following Scottish success.

Businesses in Scotland are spending £65 million less on water than they were five years ago, according to Business Stream, Scotland’s largest provider of non-domestic water and waste water services – and England is poised to follow suit with market deregulation expected there within a few years.

This month marks the fifth anniversary of Scotland becoming the world’s first competitive non-domestic water market, which has achieved:

Since competition began, Business Stream has introduced more than 60 new services to help its customers improve the efficiency and cost effectiveness of their water supply.

Scotland was the first country in the world to introduce competition to the non-domestic water market in April 2008, clearing the way for Scottish businesses and public sector bodies to choose their water and waste water service providers.

In anticipation of the new market structure Business Stream was established as a stand-alone business from Scottish Water to serve the water needs of Scotland’s business community. The company has its own independent management team and board, representing the needs of customers when negotiating with wholesaler Scottish Water.

Mark Powles, chief executive of Business Stream, said: “Competition was set up to benefit customers and it’s our view that this has been successful in what is still an immature market. Customers across the market are benefiting from keener pricing, better service and greater innovation, and Scotland should be proud of what has been achieved.

“Competition is effective motivation for water retailers to work with customers to achieve efficiencies, through driving down costs and water use. The first five years of the market has been a learning experience for everyone, and we’re looking forward to working with customers to continually refine and improve the service we provide.”

Scotland’s success in pioneering the competitive model for the non-domestic water market has provided an example for other countries to follow. In England, currently only the largest water users are free to switch suppliers, but full competition is expected to be introduced as early as 2017.

Following a Draft Water Bill in July 2012, the Department for Environment, Food and Rural Affairs (Defra) has organised a high-level steering group to evaluate how the market should be structured and governed.

It is hoped tha the full Water Bill is announced in the Queen’s Speech, which could set the wheels in motion for full market opening in England.

Business Stream recently welcomed its first major English customer, Bernard Matthews. The turkey producer, which has 56 farms throughout East Anglia, in Norfolk, Suffolk and Lincolnshire, switched water supply at its Suffolk site to Business Stream on January 23 of this year. Mark Powles said the deal was not only significant commercially but also as an indication of English customers’ willingness to switch provider.

Mark Powles said: "Bernard Matthews is a significant customer win for us, signalling our intention and capacity to compete fully when competition is introduced in England.

“Scotland has shown England the benefits and choice that the competitive market model opens up to businesses, and there is a genuine demand for this to be introduced in England. With more than £35 million in consumption savings already realised in Scotland, the possibilities in a market as large as England’s are huge.”

Mark outlined five key components which would allow the creation of a customer-focused English market:

He added: “Five years after competition was introduced in Scotland, we are still hungry to increase efficiencies, deliver better value, and build strong relationships with our customers.

“We are hugely excited by the prospect of taking the lessons we have learned in Scotland and competing in a competitive English market, and we’re very much looking forward to what the next five years will bring.”

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