On 19th December, the water regulator Ofwat released its final determinations for the 2024 Price Review (PR24), setting price controls for water companies from 2025 to 2030. This decision will have a direct impact on business water costs, with significant price increases set to take effect from 1st April 2025. The review underpins a record £104 billion investment programme aimed at improving water quality, reducing pollution, and addressing climate change challenges.
The newly published wholesale prices confirm substantial cost increases across many regions. However, not all retailers have yet to release default retail rates (out-of-contract rates), making it difficult to determine the full impact on businesses that have not secured a contract.
Many water companies are passing a greater share of cost increases onto business customers, particularly large and multisite users, to ease the burden on domestic consumers. As a result, some regions may see business water bills rise by 90-100% dependent on their tariffs and consumption, with an overall increase of approximately 50% across the next five years. Southern Water’s region is expected to experience the sharpest rise at 53%. Additionally, annual inflationary adjustments mean that the real impact could be even higher.
The price increases support a substantial programme of investment in water infrastructure and environmental improvements. Key areas of focus include:
Who is your current water supplier? Are they delivering to your requirements?
Are you on a contract? – Many businesses assume they have an agreement in place when, in fact, they may be on default rates, which can be significantly higher.
Have you budgeted for these increases? – Understanding the financial impact now will help mitigate unexpected cost spikes in the coming years.
Do you know your current water consumption? – Awareness of your usage patterns can help identify areas for cost savings and efficiency improvements.
Have you had a water audit? – An audit can uncover inefficiencies, billing errors, and potential savings opportunities.
To navigate these changes and mitigate cost increases, businesses should proactively manage their water procurement and efficiency strategies. Our suite of water services includes:
If your organisation has not yet reviewed its water strategy, now is the time to act. Engaging in discussions about procurement, efficiency, and budgeting will help ensure that your business is prepared for the upcoming price changes.
For expert guidance on securing competitive rates, managing costs, and optimising your water usage, get in touch today.
Article by Justina Sarkanaite
Water Procurement Specialist
Justina Sarkanaite has specialised in the water industry since English deregulation in 2017, with expertise in procurement for multi-site retailers, manufacturing, and commercial real estate sectors.
She specialises in helping clients navigate the complexities of water deregulation, ensuring they maximise cost savings while improving supplier quality, billing accuracy, and service reliability. Passionate about water conservation, Justina advocates for sustainable solutions such as Automated Meter Readers (AMRs) to enhance efficiency and long-term resource management.
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