Small businesses will only make an average one-off saving of £80 by switching water supplier after the market was deregulated this weekend, according to research by utilities consultancy Utilitywise. It says that as a result only larger companies stand to gain from the changes.
The water market in England opened for competition on Saturday, with water regulator Ofwat estimating this will provide savings of £200m to 1.2m non-domestic customers including businesses. But Utilitywise found the savings for small firms would be negligible.
Brendan Flattery, CEO of Utilitywise, called on Ofwat to reevaluate its pricing policy to give SMEs better value. He said: “The Scottish Water market deregulated in 2008 with similar low margins. The regulator then had to intervene after three years, widening the retail margin to allow savings of more than 20 per cent for all businesses. Since the intervention, around 50 per cent of businesses have switched.”
Businesses could also be missing out on the chance to cut other utilities bills too, as it emerged this week that just one in eight UK businesses (13 per cent) have ever switched energy suppliers.
The study, conducted by Make It Cheaper, found that almost half (49 per cent) of business owners spend over £1,000 on energy each month. One in five did not even know how much they spend on gas and electricity per month.
Nick Heath, head of energy insight at Make it Cheaper, said: “There is a common misconception that changing energy suppliers for your business is an arduous task, yet it couldn’t be further from the truth. Getting a quote is quick and simple, you just need your current meter reading and a few personal details.”