Thames Water is to transfer all its retail activities for its business customers to a different utility.

Castle Water will provide billing, cash collection and associated services for Thames Water’s non-domestic customers when the retail water market opens up to 1.2 million businesses and public sector organisations in England in April next year.

Operational water and wastewater services to households and businesses however will remain unchanged.

Thames Water said the decision allows it to concentrate on its core regional household business, allowing Castle Water to handle the retail operations for around 250,000 non-domestic customers, including those in Scotland.

Martin Baggs, CEO of Thames Water said: “Billing and cash collection for business customers is a highly specialised area and we expect it to become more so as the competitive market develops.

“Transferring this discrete element of our operations to Castle Water will allow us to focus all our energy on delivering excellent operational water and wastewater services to all our customers and retail services to household customers, who continue to see improvements in the service we deliver. In turn, it allows Castle Water to play to their greatest strength, which is in providing retail services tailored for business customers on a national platform.”

Earlier this year Severn Trent and United Utilities were given the green light by the competition watchdog to form a joint venture targeting the business water retail market.