Scottish households benefit from cheaper water but businesses losing out


Alan Sutherland,
Chief Executive,
Stirling, Scotland — (METERING.COM) — February 26, 2009 – Scottish households are paying on average £20 less for water than their counterparts in England and Wales, thanks to Scottish Water’s improvements in performance, but businesses are losing out on collective savings of up to £5 million per year by not reviewing their water supplier, the Water Industry Commission for Scotland (WICS) has reported.

In a report evaluating Scottish Water’s costs and performances in 2007-8, WICS finds that the company’s running costs are 40 percent lower than when it was formed seven years ago. Moreover these costs are sustainable, rising by slightly less than inflation over the costs of the previous year, despite the cost pressures of higher energy prices, more extensive water and waste water treatment processes, higher local authority rates, higher fees to the Scottish Environment Protection Agency, and increased leakage detection and repair costs.

“We are pleased to report that Scottish Water has met its targets for running costs, beating our expectations by five per cent,” said Alan Sutherland, chief executive of WICS. “These savings are being passed on to Scottish households and businesses.”

Scottish Water, formed in 2002, is a public company supplying water and sanitation services to 2.3 million households across Scotland.

Looking forward, WICS projects that the average bill for a Scottish Water customer in 2009-10 will be around £28 less than those for households in England and Wales.

However, at the same time WICS has found that while many businesses are benefitting from the cost savings and environmental benefits of competition in the Scottish water industry, some two-thirds of non-domestic customers have yet to review their water and sewerage provider, leaving millions of pounds worth of savings unrealized.

In a world first, Scotland launched a competitive water and sewerage market for all business customers in April 2008. In the ensuing nine months thousands of businesses across the country have either renegotiated or switched suppliers, achieving savings of £4 million.

The benefits for non-household customers are not just financial, with bespoke environmental advice and solutions also being offered by providers, along with increased commitment to water saving measures and leakage reduction. For example, working with Business Stream, U.K. supermarket group Tesco installed smart meters at its Scottish stores, achieving savings estimated at £1 million during the past year through improved leak detection capability and efficiency in consumption.

“Competition has been introduced into Scotland’s water industry so that non-domestic customers can get the best possible deal on their water bills,” said Sutherland. “However, many businesses are being left out of pocket by failing to explore the new choices open to them.”

Non-household customers can currently choose between four water providers, who buy wholesale from Scottish Water – Business Stream, Ondeo Industrial Solutions, Osprey Water Services and Satec. However, further licences to provide water are expected to be awarded in the coming months.

WICS, established in 2005 as a non-departmental public body with statutory responsibilities, is Scotland’s water industry regulator.