Households expect major savings from retail competition

Most households in England would welcome competition in water retail but on the expectation that it would reduce bills significantly according to findings from a survey , the Consumer Council for Water (CCWater) has revealed.

The survey results – published by CC Water today (Friday) – showed that two-thirds of households would like to be able to shop around for a different retail supplier. But only a third of customers said they were likely to consider switching when they were informed that savings could be just £4 to £8 on the average annual water and sewerage bill.

It is the first time households’ views on water competition have been published since the Government asked industry regulator Ofwat to assess the costs and benefits of offering household customers in England a choice over who supplies their retail water services.

Ofwat is set to complete its review later this year, and competition could be introduced as early as 2020.

Tony Smith, Chief Executive of the Consumer Council for Water, said: “Most customers like the idea of choice, especially if it can reduce their water and sewerage bills.

“But many customers have made it clear that they will not waste their time shopping around if the savings are so small and fall well short of their expectations.”

CCWater’s research revealed the lure of lower prices – rather than better customer service – would provide the biggest motivation for customers to consider switching water retailer, or negotiate a better deal with their existing water company.

When asked how much they would need to save on their own water bills to switch, 44 per cent of households said over £40 a year – which is more than the total value of retail services on the average water and sewerage bill.

CCWater will use the research findings to help inform Ofwat’s review of household competition. The regulator’s interim findings are due to be published in July, with the final report scheduled for September.

Although household competition remains some way off, around 1.2 million eligible businesses, public bodies and charities in England will be able to choose their water retailer from April 2017.