Water regulator Ofwat has stated that the household water market in England and Wales should be opened up to competition. The comments from Ofwat came in a response to a government report in November 2015 that asked the regulator to investigate the costs and benefits of competition.
The findings disclose that a wider water market could bring new offers such as water efficiency services, detection of leaks and multiple service bundles for customers that could include a combination of water and energy services. Despite these perceived benefits, Ofwat is cautious in its proposals; saying that “there can be no guarantee of how successful introducing competition to the residential retail water market would be. But the evidence from our assessment suggests that a net positive outcome is more likely than not.” The assessment points to a significant level of potential benefits worth around £2.9 billion over a 30 year period. According to Ofwat, greater competition may only have a modest short term impact on bills, with an annual saving of £8 although point to greater customer service. Lower bills would possible be realised over a longer time scale as retailers achieve efficiencies and challenge wholesale prices the report said. Ofwat was keen to highlight that their proposed market would be competitive, not unregulated in order to protect customers and public health and safety.
The water market was privatised in 1989 and competition within the non-residential market introduced in 2014.
Source: Sky News