Customers collectively saved millions of pounds on their bills in the first year of the non-domestic water retail market but significant challenges persist, according to a review of the market’s first year.

Ofwat said customers who have switched provider or who renegotiated their deal collectively saved around £8 million on their bills and up to 540 million litres of water.

Despite the savings, the review also found smaller business customers are less aware or interested in the market and suggests many are potentially missing out on its benefits.

Several issues were identified by the regulator which it said are impeding the market from working to its “full potential” for customers.

These include poor interaction between wholesalers and retailers, a lack of complete, accurate and timely market customer data and poor performance by wholesalers to deliver good customer outcomes.

Brendan Flattery, chief executive of consultancy firm Utilitywise, labelled the process “frustrating”, saying his company warned of the inertia a year ago.

He called on environment secretary Michael Gove to empower the industry regulator with the “strength and authority” to fight for local business.

In response to the findings Tony Smith, chief executive of the Consumer Council for Water, said while the watchdog is “delighted” to see more customers benefiting from the market, more needs to be done to improve service.

“We’re delighted to see some customers benefiting from the market but it has not been an entirely positive experience for everyone and there is still much more to be done to improve service and reduce the rise in complaints among a small number of poor performing retailers.

“There also needs to be a renewed push by retailers and brokers to reach out to small and medium-sized businesses and convince them that competition has something to offer them.

“The majority of smaller businesses remain unaware they can shop around for a better deal and until that changes the market cannot realise its full potential for customers.”

Meanwhile a spokesperson for market operator MOSL said: “In the first year of the market we have collaborated with the industry to deepen our understanding of key market issues and drive forward market improvements, in line with our market improvement strategy, particularly in areas that will help improve the customer experience such as data quality.”

Ofwat added that wholesalers, retailers and MOSL all have a key role to play in addressing these challenges.

The regulator’s senior director for customers and casework, Emma Kelso, said: “While many customers are starting to save money, time and water as a result of switching or renegotiating, other customers have yet to benefit as much as they could.

“It’s clear from our report that there is still much untapped potential in this market. For instance, our survey of customers reveals that many are interested in a range of new services including around water efficiency.

“By addressing the challenges we’ve identified around data quality, the performance of wholesalers and the vital relationship between wholesalers and retailers, we will have a market delivering to its full potential with, at its heart, customers who are aware of the options available and who feel able and empowered to participate.”

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