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A nursery’s water bill is mostly hands. Ten to fourteen handwashes per child per day under Ofsted’s hand-hygiene expectations, multiplied by the number on roll, multiplied by 47 weeks. Add nappy disposal, on-site laundry for cot bedding and bibs, the dishwasher running through breakfast and lunch service, and the paddling pool that comes out for the third week in July. None of that is dramatic on its own. Stacked on a 40-place setting it’s a quietly substantial number, and the standing charge sits on top whether you’re full or in the third week of August with three children in.
You can switch retailer. Nurseries and childcare providers have had that right in England since 2017. Most never have.
This page covers what nursery operators actually pay for, where the bill drifts away from the way the setting actually runs, and the three procurement routes most providers use to bring a sharper contract in. It also covers Ofsted hand-hygiene volume, term-time versus holiday standing charges, and the awkward question of vacant-room billing when a baby room is mothballed for a quarter.
- England’s non-household water market opened to competition on 1 April 2017 under the Water Act 2014.
- Around 20 retailers are licensed by Ofwat to supply nurseries, pre-schools and childcare settings.
- Wholesale supply still comes from regional water companies (Thames Water, Severn Trent, Yorkshire Water, and others).
- A 40-place day nursery typically uses 200–350m³ a year — small in absolute terms but heavily weighted toward standing charges and wastewater margin.
- Hand-hygiene volume rose around 15–25% post-pandemic and never came back down. Most nursery tariffs were last priced before this shift.
- The three biggest savings levers: term-time standing charge realignment, getting on-site laundry off the default commercial passthrough, and stripping retailer margin off long-default tariffs.
Why nurseries pay more for water than they should
A busy nursery cycles water through handwash basins, dishwashers, ice makers and back-of-house prep at a far higher rate per square metre than most commercial sites. That alone is fine — what isn’t fine is paying daily standing charges on a tariff that hasn’t been touched since the contract was signed, drainage charges on a forecourt that drains to a soakaway, and meter estimates that have been creeping up for two years.
Nurseries and childcare settings also tend to sit on tenanted commercial leases — the landlord is often named on the bill, but the operator is the one bleeding money. The retailer doesn’t volunteer corrections, and most nursery owners haven’t been told the market is competitive.
The five places nurseries overpay
| What’s going wrong | Why it costs you money |
|---|---|
| On-site laundry on a commercial passthrough rate | Cot bedding, bibs and wipes go through small commercial machines billed at the same per-cubic-metre rate as a bigger operation. The volume tier almost never gets adjusted to match a 40-place setting. |
| Dishwasher cycles in food prep | Three meal services a day plus snack rounds means a small commercial dishwasher cycles 8–12 times. The water volume on prep is typically more than half the kitchen total. |
| Hand-hygiene volume rising post-pandemic | Ofsted hand-washing expectations went up in 2020 and stayed up. Most nursery bills haven’t been re-tariffed since, so the new volume is being billed on a tariff written for the old volume. |
| Outdoor water play and sandpit refill not separately metered | Garden play uses real volume in summer terms, but folds into the main meter. A simple seasonal annotation often unlocks a wholesale credit. |
| Vacant-unit billing on closed-down rooms or sites | If a baby room or one of two settings has been mothballed, the SPID and standing charge usually keep going. Notifying the wholesaler stops the meter clock until reopening. |
Can nursery groups and independent operators switch water supplier?
Yes, and the mechanism is different depending on who’s signing the contract.
An nursery is its own legal entity, so it can enter a water contract directly — no council approval needed. Multi-academy trusts can contract centrally for every nursery in the chain, which usually unlocks better volume pricing. Independent operators sign for their own site, with the contract in the trading entity’s name.
The 12 retailers below are all licensed by Ofwat to supply non-household water in England. Pricing, service, and hospitality-sector experience vary — most trusts shortlist three and go to a simple comparison exercise.
Routes to procurement
Three ways operators in this sector typically bring a new water contract in. Each comes with its own trade-off between control, effort and how sharp the price lands.
The National Day Nurseries Association and PACEY both operate group-purchasing schemes that pre-tender utilities across member settings. The unit rate is competitive on volume. The trade-off: the deal is written for a generic small-setting profile, so a 60-place setting with an in-house laundry or a converted property with shared meters often does better on a tendered contract.
Nursery water FAQs
Does Ofsted hand hygiene actually move the bill that much?
On a small setting, no — it’s measured in pence per child per day. On a 40-place nursery running 47 weeks a year, the cumulative volume is meaningful, and the tariff was almost certainly priced before the 2020 step change in handwashing frequency. The fix is a tariff review against actual current consumption, not a change in practice.
What happens to standing charges in the holidays?
They keep running. Standing charges are a daily fee for being connected to the network, and they don’t pause when the setting closes for two weeks at Christmas. What you can do is check whether the standing charge is appropriate for your meter size and load profile in the first place.
We’ve closed our baby room. Should we still be billed for it?
If the room shares a single supply with the rest of the building, yes — there’s only one meter to read. If the room or wing has its own SPID, you can apply for a vacant-unit status which strips the volumetric charge but usually keeps a reduced standing charge. Crucially, the retailer doesn’t know the room is closed unless you tell them.
Are nappies billed as trade effluent?
No. Disposable nappies go to general waste, not the foul sewer, so they don’t trigger trade effluent. The only water cost they create is the rinse-and-handwash cycle around each change, which is captured in the broader hand-hygiene volume.
Do we have to pay surface drainage on the outdoor play area?
Only if the rainwater from that area drains to the public foul sewer. Most outdoor nursery play areas drain to soakaway, garden, or a watercourse — in which case you can apply for a surface drainage rebate. The rebate can be backdated up to six years.
What does a free audit actually look at?
Three things at the same time. We compare the unit rate against the live market across all 12 retailers. We audit surface drainage, trade effluent and standing charges for historic billing errors that can be backdated up to six years. And we check whether the contract structure fits your actual usage profile better than the default. If we don’t recover anything, you don’t pay a fee.
How do I get a quote without committing?
Send a recent water bill. The SPID, annual cubic-metre volume and current retailer are all on it. We come back within two working days with a like-for-like alternative quote and a flag if anything looks worth auditing for historic refunds.
