Utility Industries Need To Step Up Efforts To Help Uk Businesses And Households Navigate The 'cost-of-living' Crisis

Issue 80

At present, UK households face the sharpest annual rise in the cost of living in decades, driven predominantly by rising inflation - currently at 7% - including across utilities such as water, gas, and electricity. Inflationary pressures have prompted an overwhelming majority (96%) of UK businesses to call for greater government intervention to tackle the costof-living crisis.

Given the precarious financial position many UK businesses and households find themselves in, significant efforts need to be made to support these groups in lowering costs wherever possible.

With Ofgem’s announcement that the energy cap could be reviewed every three months, consumer backlash is indicative of the reputational standing of energy companies in this present crisis; with many fearful regular reviews will be taken advantage of to pass higher costs onto consumers, even if wholesale prices do eventually fall. Clearly, there is an opportunity for utility companies to become better consumer advocates and to take a lead on promoting costsaving measures.

Raising Wider Awareness

Many groups fail to identify cost-saving opportunities within their water bills due to a lack of information about their water usage levels, in part, the result of a lack of smart meters. Only having access to the industry-standard monthly or six-monthly meter reads limits people’s ability to identify inefficiency in their water usage. By working with industry bodies and the regulator to make smart metering more accessible and affordable, users can be better positioned to reduce water usage and cut costs.

In addition to raising awareness through smart meters, Everflow recently launched the UK’s first free Business Water Efficiency certifications scheme to encourage businesses to reduce their water consumption. Participating business will receive reports showing fully costed and personalised water efficiency recommendations, with calculations of how much water each business could save and its impact on water bills. This has the potential to save between 30-70% for customers, offering businesses crucial financial support.

Ultimately, providers who profit from increased usage are often disincentivised to support their customers to eliminate waste and make savings. Everflow is set up in a way which ensures we do not profit from increased usage. As an independent retailer, we pass on wholesale charges without mark-up and cover our service with fixed, transparent fees. This gives us the freedom to focus on delivering initiatives to reduce the amount of water entering the wastewater network, improve infrastructure and offer all SME customers practical guides to improve water efficiency.

Supporting Engagement in the Water Retail Market

The deregulation of the water industry in 2017 empowered businesses to switch providers and renegotiate their contracts via utility brokers when they were dissatisfied with the services provided. A driving factor behind creating an open water retail market was to help businesses secure savings on water rates, both by allowing them to switch from default contracts to fixed contracts and by incentivising retailers through competition to offer increasingly attractive rates.

The Consumer Insight Survey (CIS) 2021 showed that nearly two-thirds (62%) of those who switched experienced lower prices, higher quality service or better customer service as a result of switching water providers. The vast majority (86%) indicated they had received benefits that exceeded expectations. Despite these clear advantages, a general lack of awareness of the retail water market means that engagement is far below other utility markets with only 9% of all customers in the water market had been active in the prior 12-months.

The benefits of this open market – including cost-saving innovation, improvement to services and lower prices – are likely to increase with greater customer engagement. Therefore, greater business engagement with this market is highly recommended to improve the ecosystem and cut costs.

The Overlooked Water Utility Bill

The rising costs of essential utilities have highlighted the need to identify all opportunities to cut business costs, improve efficiency and reduce costly waste. However, the public’s focus on the cost-saving options around electricity and gas leaves many overlooking the chances to cut costs on their water utility bills.

By improving wider awareness of their consumption habits and by incentivising their engagement in the water market by providing brokers with the tools to make switching customers as straightforward as possible, the industry has an opportunity to help UK businesses to take the vital steps forward toward saving money and navigating the choppy economic waters ahead.

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