Do business water bills offer good value?

Since the privatisation of UK water companies at the end of the 1980s, information pills our domestic and business water bills have risen significantly above the rate of inflation. As businesses and households are facing increasing financial challenges, we are all looking at every opportunity to make cuts and our water bills are one area facing scrutiny.

After the high profile banking and tax avoidance scandals, it is understandable that when we see our bills continue to rise, it raises suspicion about how the providers of these services are regulated. We wonder whether we are getting value for money or if we are all just paying our water company’s huge profits and management bonuses.

In a recent Unison report it states that almost a third of an average household water bill goes on profit, compared with 9% in the energy sector. The report demands greater regulation and monitoring and blames a lack of competition for inflated water bills.

Ofwat are the regulating body for the water industry and argue that the pricing is fair. They are supporting the current five year investment programme that the water companies are working on in order to not just supply our homes and business with water, but also maintain and improve services for the future. Ofwat set price limits for water companies and no water company can change their prices without Ofwat approval.

The current water industry programme involves £25 billion of investment to improve or replace water mains, improve water and sewage treatment works for higher quality drinking water and improving the cleanliness of UK rivers. They also invest in issues such as reducing the discolouration of water, which may not impact on quality, but enables the water supplied to meet customer expectations.

The water companies state that they provide customers with high quality drinking water, and sewage services 365 days a year. The exacting standards that have to be met mean that the UK water supply are amongst the best in the world and these are provided to households for around £1 per day. Prices to business are more variable and depend on demand. Certain industrial processes rely on high quantities of water for the production of products, so their bills will be significantly higher than an office.

Water is a finite resource, which has to be carefully managed to ensure we have a reliable supply in the future. Ofwat works with the Environment Agency to set strict targets that the water companies have to meet each year, along with demonstrating improved efficiency in the processes they use.

The environmental issues surrounding water use are becoming more of a global concern. Governments are being encouraged to put more pressure on businesses and water companies to better manage and significantly reduce water use. With attention focused on lowering their business water bills, there is likely to be improvements to reduce water waste and put systems in place to increase efficient water use.

From an environmental perspective, the current concerns, around affording to pay the water bill is a benefit, as it encourages beneficial change. One such example is an increase in the demand for business water bill audits that recommend options for reducing water use, as well as checking that a business is on the correct tariff for the water used.

In the most recent Queens Speech, a Water Bill was announced to tackle the issue of competition in the industry. The Bill will allow all business, charity and public-sector customers to switch their water supplier. This bill will not only increase competition, but also make it easier for new companies to enter the water market. Another aim is to better manage drought situations by making it easier for water companies to trade water with each other.

Whilst our business water bills are increasing above the level of inflation, these charges could be justified if significant investment is being put into ensuring we can continue to rely on a long term quality water supply. Time will tell whether the new water bill announced in the Queens Speech increases competition and has an impact on prices. Meanwhile we can all address our water usage for both environmental and financial benefit.

If you are interested in how your business could reduce water use, you can contact us today to arrange a Business Water Bill Audit on 01442 832034. If we can’t save you money, you don’t pay for our services, so there is nothing to lose.

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