In an article for consultancy firm Oxera, Alan Sutherland, chief executive of the water industry commission for Scotland, and Sonia Brown, chief regulation officer for Ofwat, said competition would bring resilience to the sector.
All non-household water and sewerage customers in England will be able to switch their retail supplier from 2017, clearing the way for businesses to renegotiate their exiting arrangements.
According to Sutherland and Brown, England can hope to benefit from the “very positive experiences” seen in Scotland, where a competitive retail market has been in operation since 2008.
In the last five years Scottish water and sewerage company, Business Stream, has reduced its bad debt by nearly a full percentage point to under 0.7 per cent.
The authors also expect to see an improvement in services for customers before the market actually opens, as the water industry adapts early to future requirements.
Sutherland and Brown said in the report: “It is certain that the introduction of greater competition will bring real benefits to customers and, potentially, to investors by opening up new possibilities in water services.
“The new focus on the customer will build legitimacy and help to make the services of wholesale businesses more resilient.”