Non-household water competition ‘gone off the boil’

Ofwat should get the power to “force water suppliers to publish tariffs,” says Utilitywise

Only 1 per cent of businesses have switched water retailer since the non-household market opened in April, prompting broker Utilitywise to suggest market liberalisation has “gone off the boil”.

In a letter to environment secretary Michael Gove, seen by The Times, Utilitywise chief executive Brendan Flattery insisted that the regulator should be “empowered to force suppliers to publish tariffs so that businesses can compare prices”.

Since the non-household water retail market opened on 1 April, fewer than 1 per cent of businesses have switched water provider, according to the broker.

A spokesman for Ofwat said that its data shows there have been 30,000 switches since the market opened. However, this includes multi-site businesses.

There are approximately 3.5 million supply points in the non-household market, suggesting that only 0.85 per cent of the market has switched. Utilitywise claimed the figures are “actually far worse”, as around 11,000 of these switches were made before 1 April.

In his letter, Flattery said businesses were promised “lower bills and better service” but instead face an “arduous task” to work out if water competition would benefit them. He warned that market liberalisation has “gone off the boil”.

“With deliberately confusing and non-standardised pricing and Ofwat not doing enough to promote the open market, it’s near-impossible for small businesses to take advantage of the savings as they don’t have the time required to interact with approximately 20 suppliers,” he wrote. “We feel that we’ve all been taken for an April Fool.”

A spokesperson for Ofwat said: “It is just 13 weeks since the opening of the world’s largest competitive water retail market. Since then, we’ve seen new retailers enter the market and new offers, bundles and innovations emerge. And in this new market, thousands more have renegotiated a new deal with their current retailer, and we hear customers have saved hundreds of thousands of pounds.

“There is much more to do, in making sure all customers know about the market and can find all the information they want, when they want it. We have told retailers that we expect them to make this happen and we will continue to hold feet to the fire to get the right outcome for customers.”