Content Coms Explains: UK Water Market Reforms
UK Water Market Reforms (WMR) will open up water markets, changing how water services are run and sold.
What are UK Water Market Reforms?
UK Water Market Reforms are a Government work programme, which will create a new, open marketplace for commercial water services. In future, businesses, public sector, charitable and not-for-profit organisations will be able to choose who sells them water and sewerage services.
What are the business benefits?
Under the changes, businesses will be able to switch their water and sewerage service supplier freely. Firms will therefore be able to negotiate the best package for their needs. Companies will be able to procure services based on price, sustainability, or other measures they consider important.
The changes hope to deliver more efficient customer service and better-tailored water services, improving water efficiency while creating more competition.
Like most competitive marketplaces, a more open UK water market should build opportunities for new firms to provide services within the water sector too.
When are the changes due?
From April 2017, businesses will be free to choose who sells them water and sewerage services.
How will the new water markets work?
The new market will operate similarly to other existing utility services. In future, various water suppliers will compete for customers by offering them the best deal.
New water suppliers can buy wholesale services from the former monopoly suppliers. They can package them with other value adding services; offering more competitive prices.
What is the scale of the changes?
From April 2017, some 1.2 million businesses will be able to freely choose who supplies their water and waste water services. The new market will be the largest retail water market in the world, delivering an estimated £200 million of overall benefit to customers and the UK economy.
Who is managing the changes?
The process of changing the UK water market is called Open Water. The stakeholders running the Open Water Programme are:
- The Department for Environment, Food and Rural Affairs (Defra)
- Market Operator Services Ltd (MOSL)
MOSL has a central role in developing and delivering the core systems and processes that will enable customers to switch between suppliers.
What is the legislation behind the process?
Plans for the new competitive market were first set out in the government Water White Paper, ‘Water for Life’, in 2011.
Then, the Water Act 2014 established the legal framework to create the new market. Open Water is the designated work programme to design and deliver the new market for April 2017.
What are the key changes within the Water Act 2014?
The Water Act 2014 includes measures which mean:
- All business, charity and public sector customers in England can switch their water and sewerage supplier from 2017
- New businesses can enter the water sector and provide new sources of water or sewerage treatment services
- A national water supply network will be established to make it easier for water companies to buy and sell water from each other
- Owners of small scale water storage can sell excess water into the public supply
How might the changes catalyse sustainability?
(And what about more useful contracts and services between suppliers and customers?)
Water Performance Contracts (WPCs) represent one potential new way of working that might become commonplace. WPCs could encourage companies to implement sustainable technologies to reduce water consumption.
The resulting savings from reduced water bills could be shared between the customer and supplier over the duration of the WPC. The supplier might help with upfront funding to get the new tech in place.
This type of tailored contracting illustrates how more unique water packages, featuring elements like WPCs, could become an important part of the new, open markets. When a market is opened up, all sorts of new players and products tend to appear, offering choice, competition and benefits.