A period of unprecedented change

The UK water sector is going through the biggest period of change since privatisation, driven by changing demands from customers, the expansion of competition and markets and an evolving regulatory framework.

Customers expect a friction-free relationship with their water company, they are increasingly conscious of their bills and expect any problems to be resolved quickly. Service and retail experiences from other industry sectors has raised the bar and reshaped customer expectations.
From 2017, all non-household customers are  able to choose their water retailer for the first time. Throughout development of the market, water companies have undertaken significant preparation and readiness activities to ensure compliance for market opening and these efforts will shift toward being competitive and operating efficiently.

The recent pace of change is unlikely to fade with the development of further markets. Discussions are ongoing in relation to the prospects for a household retail market and plans are in progress for new markets in water and bio-resources from 2020.
The regulatory framework went through a substantial shift in 2014. The emphasis is on flexibility to meet customer expectations, based on high-level outcomes and a total expenditure approach. This highlights the importance of thinking differently and adopting innovative solutions.

An ongoing efficiency challenge forms a backdrop for all these changes. Expectations of flat or falling revenue continue against cost uncertainty, creating a squeeze for companies. Key levers include effective business planning, operational effectiveness and supply chain management.

Innovative approaches to energy are a growing trend, with companies adopting integrated strategies across purchasing, consumption and generation. This reflects a global trend, building on reforms in energy to create a closer relationship between the two sectors.

Despite some uncertainty, water remains attractive to investors. Changes to merger conditions and the requirement to demonstrate funding efficiency through the upcoming price review signal further movements in ownership.

Baringa has developed a strong track record in the water sector and is at the centre of helping our clients respond to all of these changes.

Case Study - Baringa working with Tideway video and PDF

Please click on the above image to view our case study.

Please click on the above image to view our case study.


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