Ofwat figures reveal slow start for water market

Fewer than 3 per cent of eligible business customers have switched water retailer in the first year of the open market, Ofwat research has revealed.

A survey of customers conducted at the end of last year found 35,000 have switched – just 2.9 per cent of the total 1.2 million of eligible customers in the market.

The survey found 25,000 customers have “looked at switching” but decided to stay on their current deal, 10,000 have renegotiated a new deal with their current provider, and 15,000 are “actively considering” switching now. A further 35,000 said they “plan to engage” in the market by April.

Awareness of the market appears to have risen, with 89 per cent of large businesses and 48 per cent of micro businesses now aware of the market. However, this is a figure which some market players are concerned is not high enough.

The Consumer Council for Water (CCWater) said in February that the water industry needs to “step up” its efforts to engage with customers to ensure awareness among small businesses does not “stagnate”. The call was prompted by the consumer watchdog’s latest research, which found just 38 per cent of small and medium-sized businesses in England know they can switch supplier.

Ofwat’s survey also claimed customer satisfaction with retailers “remains high”, with 77 per cent of customers expressing satisfaction with their retailer. The figure is virtually the same as the pre-market-opening figure of 76 per cent.

At the beginning of March, CCWater warned Castle Water to address “unacceptable levels” of customer complaints. Figures from the consumer group had found that 44 per cent of the 1,630 complaints it received about retailers were about Castle.

The watchdog plans to highlight “the best and worst performing retailers” when it publishes its first annual market complaints report this summer. The report will feature all customer complaints made directly to retailers, as well as those made to the watchdog.

Commenting on the results of the survey, Ofwat senior director of customers and casework Emma Kelso said: “At the end of the first year of the market, this survey gives us a flavour of the kind of engagement we are starting to see.

“Indicators that 10 per cent of customers have got involved in the market one way or another over the first year is an encouraging start and gives a base for the market to build on. But we want to see the market continue to mature to give customers deals that best suit their needs.”