More competition in the water market could be worth billions of pounds.
Its financial benefits could be around £2.9 billion in 30 years, according to the Water Services Regulation Authority’s (OFWAT) report requested by the government.
That’s because opening England’s residential retail water market up to competition could help customers save £8 per year in their bills.
At present consumers don’t have the opportunity to choose the water supplier for their homes and businesses.
OFWAT added it competition could also prevent water customers “being left behind” and lead to innovation, improve customers service and new offers including bundling of products such as energy and telecoms.
Cathryn Ross, Chief Executive of Ofwat said: “The service offers from water companies can feel behind the curve compared to the innovation customers benefit from when buying other goods. The uncomfortable truth is that, when it comes to retail offers, water companies provide an analogue service in a digital age.Customers tell us they think they should have the freedom to choose and don’t understand why water is the only retail market in which there isn’t some form of competition.
“But, of course, this isn’t a one-way street. There are significant costs to be considered, and it will be important to ensure that customers are treated fairly in a competitive market and that vulnerable customers are protected. The decision for the government to make is whether the potential benefits outweigh the costs and risks.”