IB 09/15 Water choice for business customers on track

Ofwat has today published on behalf of Open Water1 its response to an independent review which shows it is taking action alongside its other programme partners to ensure that work to open a new water market is on track.

The new market will allow about 1.2 million business and other non-household customers in England to choose their supplier of water and wastewater retail services from April 2017. Bringing about improvements in price, service and efficient use of water, the change is forecast to result in about £200 million of overall benefit.

Work to open the new market is being delivered by a number of organisations through an overall programme called ‘Open Water’. This includes Ofwat, the UK Government and Market Operator Services Limited – a private company run by market participants – and Open Water Markets Limited.

The independent review was commissioned to assess the progress made so far towards opening the market and to recommend potential improvements to the programme. The review concludes that successful delivery is achievable. It identifies significant issues that need to be addressed but judges these can be resolved. Open Water has accepted the review’s findings and agreed a package of work to address the issues raised. Alongside the review Ofwat has published Open Water’s response setting out how these issues are being addressed.

Ofwat has also published an update on the cost for opening the new market. With legislation now passed and the design phase of the programme almost complete, there is far greater clarity around scope and costs. The estimated set up cost is £41.8 million for the three years from 2014-15 to 2016-17.

Cathryn Ross, Ofwat Chief Executive, said:

“This will be the largest retail water market in the world, delivering significant benefits to customers. Opening it is a big challenge requiring many organisations to work well together. The review highlights that the implementation of the new arrangements is in hand. But it also identified a number of significant areas where collectively we – companies, regulators and government – need to improve the programme arrangements, so we can make sure we get things right for customers.”

Adam Cooper, Ofwat’s Director for Retail Market Opening said:

“Everyone has already begun to implement many of the review’s recommendations. The updated costs for opening the market also reflects the fact we now have more detailed information on how the market will work compared to two years ago. By building on the progress made so far, we remain confident that the market will be open for business from April 2017.”

The next independent review of the programme’s progress is due to take place in the first quarter of 2016.

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Notes to editors

1. Work to open the new market is being delivered by a number of organisations through an overall programme called ‘Open Water’ This includes Ofwat, the UK Government and Market Operator Services Limited – a private company run by market partipants – and Open Water Markets Limited. The Retail Market Opening Management Group – senior executives from key organisations, including Ofwat – has overall responsibility for the programme.

2. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.

3. The Water Act 2014 introduced changes that allow the new retail market. A copy of the Water Act 2014 can be read on legislation.gov.uk.

4. Media enquiries to Ofwat Press Office on: Simon Markall 0121 644 7696 / simon.markall@ofwat.gsi.gov.uk