Excellent 5* RatingHow does water deregulation affect you?
Since the market opened, you can choose who supplies your business water. Here’s what changed, what stayed the same, and what it means for you.
Water deregulation is the change that lets your business choose who supplies its water, the same way you already choose for energy. The practical effect is simple: you no longer have to stay with the regional company by default, and you can compare retailers and move to a better deal. This guide covers what changed, what stayed the same, and what it means for how you buy water.
Quick snapshot
- Any business in England or Scotland can now choose its water retailer.
- England opened in 2017, Scotland back in 2008.
- Your water, pipes and wholesaler do not change, only the retailer you buy from.
- It means you can compare and switch for a better rate and better service.
What deregulation changed
Before deregulation, your business water came from the regional monopoly for your area, with no choice and no competition. Deregulation opened the non-household market so that licensed retailers compete for your business, while the regional company carries on delivering the water itself. In short, the billing and service were separated from the supply, and the billing was opened up to competition.
If you want the formal definition of the term, our glossary entry on water market deregulation covers it. This guide is about what it means in practice.
When it happened
Scotland led the way, opening its non-household water market in 2008, the first country in the world to do so. England followed in April 2017, extending the same choice to around 1.2 million business, charity and public sector customers south of the border.
Wales was not deregulated in the same way, so most Welsh-supplied premises still cannot switch retailer. Households cannot switch either, as the open market is for business supplies only.
What it means for you
The headline is choice. You can shop around, compare retailers and move to one offering a better rate, better billing or better service, rather than accepting whatever the incumbent provides. For a business with several sites, you can also bring them together under one retailer and one bill.
It also means the responsibility shifts to you a little. The savings are there, but only if you act on them, because no one switches you automatically.
What stays the same
This is the part that reassures most people: nothing physical changes. The same regional wholesaler still owns the network, treats and delivers the water, and maintains the pipes and the meter. Switching retailer changes the company that bills you and handles your account, nothing more.
So there is no new connection, no interruption to supply, and no change to water quality. The water arriving at your tap is identical whoever you choose to buy it from.
Why prices and service now vary
With competition came variation. Retailers set their own margins and service levels, so two businesses on the same street can pay different rates depending on who they buy from and what they agreed. The wholesale cost of the water is broadly fixed by the regional wholesaler, but the retailer element on top is where the competition, and the difference, sits.
That is exactly why comparing matters. The gap between a keen retailer and a default rate can be meaningful, especially for a higher-usage site.
What you can do now
The practical step is to compare retailers and switch if there is a better deal, which there often is if you have never moved or have drifted onto a deemed rate. Our guide on how to switch business water supplier walks through the process, and you can compare business water suppliers to see your options.
It is also worth a look at your historic charges while you are at it, since deregulation made it easier to challenge errors and overpayments. Our guide on how to lower your business water bill covers the wider ways to bring costs down.
Common misconceptions
The biggest one is that switching means a different water supply or a risk of interruption. It does not. Another is that only large businesses can switch, when in fact any non-household customer can, from a single shop upward. A third is that the incumbent rate must be the safe or cheapest option, when staying put by default is often where businesses overpay.
None of these hold up. Deregulation was designed to give every business the same right to choose.
Who benefits most
Every business can benefit, but the gains are largest for those who have never switched, those sitting on a deemed rate, and multi-site operators juggling several contracts. The more you use and the longer you have stayed put, the more there usually is to gain.
If you run sites across both England and Scotland, deregulation also lets a single retailer bill them together, which our guide on managing business water across multiple sites explains.
Frequently asked questions
What is water deregulation?
Water deregulation opened the non-household water market to competition, so businesses can choose their water retailer instead of staying with the regional monopoly. The regional wholesaler still delivers the water; only the billing and service are opened to competition.
When did water deregulation happen?
Scotland opened its business water market in 2008, the first country in the world to do so. England followed in April 2017. Wales was not deregulated in the same way.
Can my business switch water supplier?
Yes, if you are a non-household customer in England or Scotland, whatever your size. The open market is for business supplies, so households cannot switch.
Does switching change my actual water supply?
No. The same regional wholesaler still delivers the water through the same pipes and meter. Only the company that bills you changes, so there is no interruption and no change to water quality.
Do I have to switch after deregulation?
No, you can stay where you are. But no one switches you automatically, so any saving from a better retailer only happens if you choose to act on it.
Is deregulation only for large businesses?
No. Any non-household customer can switch, from a single small shop to a large multi-site operator. The benefit is often largest for businesses that have never moved.
