Photo source: HM Government
In a report published today and commissioned by CCWater SME’s are luke warm towards the benefit of competition in the water sector. The main reason for switching would, not surprisingly, be financial considerations. However savings would need to be over 10% to persuade over 50% to switch.
General awareness in SME’s about water competition is very low and most are satisfied with their current supplier. The Cave review made a number of recommendations about how competition could be developed in ten water industry, including the suggestion that the threshold at which business users are able to switch supplier should be reduced from 50ML to 5 ML a year.
The appetite for competition appears to have diminished significantly. The new Government in their Programme for Government have said: “We will examine the conclusions of the Cave and Walker Reviews, and reform the water industry to ensure more efficient use of water and the protection of poorer households”. That combined with all the negative comment on the benefits of competition in the electricity sector has taken away the incentive to change. The water sector should stop worrying about competition and instead focus on delivering the best possible service at the lowest cost.
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