Big changes are afoot in the world of water. Legislation currently making its way through UK Parliament will change the water market in England, potentially as early as 2017, in a way which will make it easier for non-household customers get the kind of service they want from suppliers.
The Water Bill has the potential to completely change how public sector bodies, businesses and charities think about their water. Among its many components, the legislation will give local authorities, and other non-domestic properties, the freedom to choose who supplies their water and wastewater services.
Although 2017 probably feels like a long time away, local authorities have the opportunity to start thinking now about how they might exercise that choice and what they expect from water and waste water providers.
In Scotland we’ve had water competition since 2008, as the first competitive water retail market in the world. The Water Bill, which will create a new competitive market, is undoubtedly inspired by the Scottish experience and will take much of its structure from this model.
The Scottish model has achieved a lot for customers, simply by introducing choice into the market. In the five years since competition was introduced, non-domestic users have seen £35m in consumption savings and £30m in discounts, while reducing water consumed by 16bn litres and saving 28,000 tonnes of carbon. As part of our current contract, we are on track to deliver more than £36m through discounts for the public sector over four years.
To take advantage of these benefits when they become available, councils in England should think carefully about how they use water across their property portfolios. This will mean examining what they are currently paying for water, how much is used, where it is being consumed and by which services across the organisation.
This can be achieved simply with the installation of automated meter readers (AMRs) which allow water consumption to be monitored in real time across all sites. Subsequently, councils will need to think about finance: how are they going to make the potential a reality? Competition has driven financial innovation and previously untapped ways of funding water saving initiatives.
For example, Glasgow City Council, Scotland’s largest local authority, wanted to implement water efficiency measures to save money and improve environmental performance, but like many local authorities it lacked the upfront investment required.
Working in partnership with the council, Business Stream provided the necessary capital for the infrastructure and labour required, installed AMRs and deployed its leak detection and repair teams to identify bursts across the estate. We then took a share of the savings – which totalled more than £1.3m for Glasgow over the course of four years.
This kind of innovation wouldn’t have existed without customer choice, since competition has forced water companies to look at the services they provide from the customer’s perspective.
Competition has seen water companies in Scotland strive to stay ahead of the pack by delivering efficiencies, discounts, innovation in services and new products. The country’s local authorities have benefited from a market that is more responsive to their needs. The Water Bill should do the same for councils across England as well.
Mark Powles is chief executive of Business Stream.
