The Water Industry Commission for Scotland (WICS) has welcomed Ofwat’s announcement that it will be recommending the phased opening up to competition of contestable water and sewerage markets.

Unlike the experience in England and Wales to date, Scotland has had a positive response to the opening up of the market from 1 April this year.  The new structure was the biggest single change to the water industry in the UK in the last 20 years, with business customers already changing supplier and feeling the positive effects of competition – both from the offerings of new suppliers and the incumbent supplier raising their level of service to meet the demands of competition.

Alan Sutherland, CEO of the Water Industry Commission for Scotland says: ‘In Scotland we have introduced a competitive market that is all about our customers.  Competition was long overdue and we are leading the world by being the first country to introduce competition to its water sector.  For us, the launch on 1 April meant the end of ‘one size fits all’ water provision.  Customers will benefit from lower prices, better customer service and more tailored, sustainable solutions to their water and waste water needs.  Now businesses and public sector bodies of all sizes, from the smallest cornershop to the largest oil refinery, can choose their water supplier.  Competition is good the customers and good for the environment.’

The Consumer Council for Water in England and Wales also agrees that there is room to improve competition in the water industry, and that competition needs to work for business customers first, before being extended to domestic customers.

Sir James Perowne, Chair of the Consumer Council for Water Central and Eastern, said: "We have been pushing for Ofwat and the government to widen competition and are pleased that they are now looking at making changes to the system.

"Competition to date has not served business customers well. Business customers have told us that they want to be able to choose their water supplier, but are frustrated at the lack of progress.

"At the moment, competition for business customers is only open to those that use a lot of water. The high threshold of using at least 50 megalitres of water per year means that only about 2,200 business customers in England and Wales are eligible to switch suppliers, and there is no real incentive for those who are able to change their supplier because they are unlikely to save money by doing so.

"Ofwat is looking at domestic competition, but we would like to see competition working for business customers first. Our initial research has shown that roughly one quarter of domestic customers would switch if given the option, but the figures vary by area, with most customers wanting to switch in the south west of England, where water bills are the highest.

"We are working with Ofwat to carry out more detailed research on domestic consumers' views of competition to make sure that we know what consumers want from competition in the water industry.

"We look forward to working alongside Ofwat and government on their reviews of competition, so that the views of consumers, business and domestic, are made clear and taken in to account."