Not every review ends with a headline savings figure. Sometimes the value is knowing exactly what you're paying for — and which questions are worth putting to your provider.
At a Glance
Water bills are one of those business expenses that can easily become routine. The invoice arrives, the direct debit is collected, and as long as the water supply is working properly there may seem little reason to look any further.
But a business water bill can contain considerably more than simply the cost of the water being used. For non-household customers, charges can include:
In this example, a Lancashire manufacturing company had been paying its water bills routinely but had never had the account independently reviewed.
“Are we being overcharged?”
“Do all of the charges on this bill accurately reflect our premises and the services we're receiving?”
That became the starting point for the review.
Source: Ofwat guidance on non-household water charges.
The manufacturing business had occupied its premises for several years.
Water wasn't one of its largest overheads, so the bills had never received the same level of attention as expenses such as energy, staffing and materials.
The invoices appeared normal. There was no obvious billing dispute, there had been no interruption to the supply, and the monthly payments weren't large enough to immediately raise concerns.
But the owner didn't fully understand how every element of the bill was calculated. That's not unusual.
For a metered non-household customer, the water element will generally include a standing charge and a volumetric charge based on consumption. Sewerage can then involve several different services and charging methods.
So we reviewed the account in more detail.
Rather than simply looking at the total amount due, we broke the bill down into its individual components.
Checking the recorded consumption and available meter information, to understand whether the volume being billed looked consistent with how the business actually operates.
Not all water entering business premises returns to the sewer in the same way, particularly in industrial and manufacturing environments. How this element is calculated matters.
Rainwater falling on a property and draining into the public system. Depending on the company, this can be charged by standing charge, rateable value, volumetric rate or site area — so for a site with a large building, yard or car park it's worth understanding exactly how it applies.
Different from ordinary wastewater, and applies where a business discharges certain liquid waste from industrial processes. Where relevant, charges can depend on both the amount and the strength of the effluent.
Finally, the information attached to the account itself — the meter details and the way the premises and services are represented on the bill. The objective was simple: does the information being used for billing reflect the business as it operates today?
The review didn't uncover one dramatic mistake that allowed us to immediately say “your bill is wrong.”
I think that's important to be transparent about.
Instead, the review highlighted several areas that warranted further investigation. In particular, questions arose around some of the drainage-related charges, and whether the information being used for billing accurately reflected the site's circumstances.
That meant the appropriate next step wasn't to promise the business an immediate saving. It was to obtain clarification and supporting information, and raise the relevant questions with the provider.
An independent review shouldn't manufacture a saving where one hasn't yet been established.
Sometimes the value of a review is identifying the right questions to ask.
Surface water drainage can be particularly relevant for commercial premises. If rainwater from a property enters the public sewer, a charge for dealing with that water can legitimately apply.
However, Ofwat explains that where a customer can demonstrate it does not receive a particular sewerage service — apart from highway drainage — it may be entitled to lower charges. Some premises, for example, use alternative drainage arrangements for some or all of their surface water.
This doesn't mean every business with a large site is being charged incorrectly. It simply means the drainage arrangements should be understood before making that assumption.
Source: Ofwat guidance on sewerage and drainage charges.
Not a headline savings figure — a clear understanding of what the business is actually being charged for.
The owner now had a better understanding of:
Several areas were identified for further investigation before any conclusion about potential savings could responsibly be made. That's the approach I believe an independent review should take:
If there's an opportunity to save money, explain it. If something needs further investigation, explain that. And if everything appears to be correct, say that too.
The purpose isn't automatically to move a business from one water retailer to another.
Most eligible businesses in England can choose their water retailer, and they can also potentially renegotiate with an existing one. But switching isn't necessarily the answer to every problem — sometimes the first priority is simply understanding the existing bill.
A business might discover that:
The recommendation should depend on what the review actually finds.
Source: Open Water — business water retailer switching.
The main lesson isn't that every manufacturer is being overcharged for water. That's simply not the case.
Don't assume that because the total on your water bill looks reasonable, every component of that bill has been properly understood.
If you operate a manufacturing, industrial or commercial site, it may be worth understanding:
Different businesses have very different water requirements. That's why I prefer reviewing the actual bill rather than making assumptions based on the type of business.
This is just as important as finding a problem.
If I reviewed another manufacturer's water account and found the meter details appeared correct, the consumption made sense, the drainage arrangements matched the charges, and nothing obviously required further investigation, my conclusion would simply be:
Everything appears to be in order.
There's still value in that. The owner now has greater confidence that the bill has been independently checked, rather than simply assuming it's correct.
If you run a manufacturing company — or any other UK business — and you're unsure what some of the charges on your water bill mean, send me a recent bill. I'll independently review the account and explain what you're paying for.
No cost. No obligation to change retailer.
This case study is based on an example review and is illustrative. The areas identified required further investigation and clarification with the provider; no saving was established at the point of review. What any individual business finds will depend on its own premises, meter details, consumption, drainage arrangements and existing charges.
