Water is a necessity for our daily lives. It is used for everything from growing crops to ensuring hands are clean. Oh, and there is also the small matter of 60% of the average human body being made up of water, and it needs to be consumed regularly.
The world needs a lot of water. That much is clear. Yet water usage is not free – at least that is the case in the UK. So just how much have you been paying for water over the years? In addition, how has this rate differed with time?
To answer those questions, below we take a closer look at the history of UK water rates.
How Privatisation Changed the Game
In 1989, a significant change was made to water and sewerage services in England and Wales. After being publicly funded for much of the 20th century, water services were privatised. This decision has continued to be a talking point in parliament some three decades later.
In fact, in 2018, the Labour Party made direct reference to the privatisation, which was carried out under the Conservative’s watch. They noted that, since the switch from public to private in 1989, water bills had jumped up to 40%.
While this alarming figure is true, it also does not tell the entire story.
This is because a large portion of that increase took place during the early years following privatisation. For instance, the increase in water bills between 1995 and 2014/2015 was significantly smaller at 9%. This signifies how most of that 40% increase happened in the first six or so years.
An explanation for the curve smoothing out in recent years can be attributed to the fact that water services remain publicly regulated – at least to an extent. Yes, private companies run water services. However, a national regulator by the name of Ofwat oversees these water suppliers in England and Wales. The result: Ofwat can set a price cap on the amount of money a water supplier can charge its customers.
With that said, this does not mean price hikes have completely stopped. For example, 2019/2020 saw an £8 annual increase for households. This followed on from a £9 raise in 2018/2019.
Deregulation to the Benefit of Businesses
The previous section focused primarily on the change of water rates for domestic households. While the situation is not great from that point of view – prices will generally continue to rise, and regional monopolies ensure consumers have little choice than sticking with their water provider – recent changes have had a positive impact on businesses of all sizes.
In 2017, the commercial water market was deregulated. This means that, unlike households, businesses are not locked into a specific water suppler. They have the freedom to pick who provides their company with water services.
This has opened the door to several benefits – the most notable being the amount of money that can now be saved. Just like residents, most businesses had to suffer from a steady price hike caused by the privatisation of water services. Due to the freedom offered by deregulation, which is no longer a problem for businesses and organisations of all sizes.
Comparing quotes between different providers has presented the chance for a business to slash their water bill significantly. This has particularly been the case for those that have used Utility Bidder to land the best deal, as we use market insights and compare suppliers to find an ideal rate for those that use our services.
How Can Past Water Usage Predict Your Future Usage?
Of course, the more water you use, the more your business will have to pay. Yet because your general water bills can be lowered due to the above points, you can potentially use more water than before while spending approximately the same amount of money.
Other contributing factors can predict your future water usage. There is a sustained push for organisations to reduce their water consumption, for example. They can utilise various methods to improve water efficiency.
Even with these points, an audit into your previous water usage can still effectively determine the amount of water your business will use in the future. If you look back at your previous three years, for instance, this will reveal your water usage levels and how this has improved, lowered, or remained the same over a sustained period. If it has gone up over those three years, it is fair to say it will keep going up to some degree in the future.
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