Delivering change: two-year progress report for business water customers

• Enhanced transparency and consistency in leak allowances, achieved through successful collaboration with wholesalers.
• Major steps forward in smart metering, with water companies’ commitment to install 800,000 smart meters for businesses by 2030, helping to improve billing accuracy and supporting water conservation.
• Input to the Business Customer Measure of Satisfaction (BR-MEX) implementation, which provides financial incentives for wholesalers to deliver improved service and resolve issues promptly.
• Helped to shape the development of stronger incentives for retailers to drive accurate meter readings and address billing issues, directly tackling a key driver of customer complaints.
• Creation of a clear and comprehensive flow chart to support consistent and transparent market eligibility decisions, ensuring businesses can easily understand their status and access the appropriate services.
• The report also identifies areas where further action is needed, such as ensuring wholesalers are part of binding dispute resolution.

Recommendation

Changes to be made to water company licences to make wholesalers accountable under the Alternative Dispute Resolution (ADR) process for business customer complaints.

CCW action

In September 2023, Ofwat published a Call for Inputs on a proposal for wholesalers to sign up to CCW’s ADR scheme. We supported this but wanted it to be achieved by a change to wholesalers’ licences, so they are compelled to be part of the scheme. To ensure these schemes are fully effective, we also recommended that wholesalers should be part of one that includes an adjudication service so business customers can request a final binding decision on their complaint.

The Independent Water Commission’s recommendation that CCW becomes the water ombudsman could mean there is a new route to ensure wholesalers are accountable under the business customer complaints process. If all wholesalers and retailers are part of one scheme, it will ensure that all business customers have access to a binding decision in respect of complaints that are caused by either retailer or wholesaler.

Ongoing action and next steps

We are awaiting the publication of the government’s white paper containing the proposals for CCW’s ombudsman function. We will work closely with UK and Welsh governments to progress a mandatory scheme, so business customers are provided with the same level of protection as households.

Recommendation

Develop and implement strong incentives for both retailers and wholesalers to improve their service for businesses through:

• implementing a measure of customer satisfaction in wholesaler services (BR-Mex) performance commitments
• new Market Performance Framework (MPF) launched by 2024

CCW action

We helped shape the BR-MEX incentive that was implemented on 1 April 2025 based on the design set out in Ofwat’s Final Determinations for the 2025-2030 (pdf) price review period, published in December 2024. We strongly supported the introduction of the business customer experience measure and are pleased to see that this will account for 50% of the financial incentive. Wholesalers being more accountable to business customers should result in them providing a higher level of service.

We have input to the design of the new MPF, which is due to be in place by 1 December 2025. This meets all our key asks for how the performance framework should deliver improvements in services, as well as including a range of incentives on retailers and wholesalers to deliver these to a high standard.

Ongoing action and next steps

The performance standards under the new MPF will not be set in stone. If it becomes clear that they aren’t ambitious enough for retailers and wholesalers, we’ll push for change. Through our membership as the customer representative of the Performance Assurance Committee¹, we will also continue to work with MOSL on the design of future performance metrics, ensuring they drive meaningful improvements for customers.

^{1An industry led committee responsible for monitoring performance in the business retail market and holding water companies to account to achieve successful customer outcomes.}

Recommendation

All wholesalers to offer a customer-focused policy on leakage allowance to ensure that businesses get:

• at least one allowance on their water charges
• advice and assistance with leakage repairs, where needed

CCW action

We have worked closely with wholesalers and retailers to ensure business customers are being offered leakage advice and assistance, and that wholesalers are offering at least one water allowance. We looked at ease of use and understanding of wholesalers’ websites and whether their policy was in line with our request. Our work in this area can be viewed on our five-year review page.

All wholesalers now offer leakage advice and guidance to business customers on their website, with a clear explanation on how they work with retailers to deliver this. The vast majority also now offer a leak allowance on their water charges.

In addition, we developed a ‘self-help leak test’ with a subgroup of wholesalers and retailers, to provide a simple accessible guide to customers should they experience a leak.

Recommendation

Ofwat to provide greater clarity and consistency on premises eligibility for the market and work with CCW to improve the transition process where a premises leaves or enters the retail market.

CCW action

We have continued to work with MOSL and the Retailer Wholesaler Group (RWG) on proposed changes to the eligibility guidance. Firstly, we developed a flowchart which makes it clearer what trading parties need to take into account when assessing the eligibility of a mixed-use premises, including what the customer’s preference might be. This is currently with Ofwat to decide whether or not it will be incorporated into the eligibility guidance.

Secondly, we are working with the industry to improve the process for a premises being removed from the business water retail market, particularly how any re-billing of the customer is handled. It is important all trading parties are doing this consistently, so customers have clear expectations of what happens when transferring from a retailer to a water company.

Ongoing action and next steps

For the recommendation to be completed, Ofwat need to amend the eligibility guidance. We will continue to urge them to do this by adopting the mixed-use premises flowchart and continue to work with the industry on ensuring customers transition smoothly from retailer to water company once their premises is de-registered, minimising disruption and confusion.

Recommendation

CCW to submit a change request to the Customer Protection Code of Practice in 2023 to ensure business customers receive at least two bills based on an actual meter reading each year.

CCW action

After consulting with the industry, Ofwat rejected our change request as they believed the increased administrative burden on retailers to produce more bills based on actual reads would largely outweigh any benefits for customers. We strongly opposed their decision as the benefits of more accurate billing are clear, and a requirement to bill twice based on actual meter reads aligns with the existing code requirement on retailers to read meters twice a year.

Ongoing action and next steps

Where retailers are over relying on estimated meter reads to bill customers, we will use complaints and research evidence to urge them to improve their standards. We also support the introduction of the new MPF which will better incentivise retailers to read meters at least twice a year, leading to improved billing accuracy.

Recommendation

Retailers and wholesalers to be incentivised to address meters left unread for 12 months or longer, through the new Market Performance Framework, so no meters remain unread.

CCW action

Improving meter reading standards has been a key focus of the new MPF, which is due to be delivered in December 2025. Through our membership of industry working groups, we have helped develop a framework that will increase the financial incentives on retailers and wholesalers to read all meters at least twice a year. This should continue to reduce the number of meters left unread for 12 months or longer.

Ongoing action and next steps

The percentage of meters that are long unread has continued to reduce since the publication of our Five-Year review. However, almost 10% of meters are without a read for at least 12 months, as of 1 September 2025. This shows more can be done to reduce this further. We will continue to work with MOSL and the industry to ensure retailers are fully incentivised to read all meters, and that any problems that are preventing this are identified and resolved quickly.

Recommendation

Wholesalers to commit to work with retailers to implement water efficiency services in their Water Resources Management Plans and PR24 business plans.

Since our recommendation, wholesalers are now required under the Final Determinations of their business plans to reduce business customer consumption. To measure this, Ofwat will look at the average amount of water businesses use over three years and check what percentage it has gone down. In other words, if businesses previously used 100 million litres and now they only use 95 million litres on average, that’s a 5% reduction.

As part of this commitment, they are also required to show they have explored water efficiency options with retailers. Wholesalers have made commitments in their ‘Water Resources Management Plans’ that they intend to invest in water efficiency services for business customers, particularly those using large amounts of water.

This is positive as it aligns with our original recommendation that wholesalers and retailers need to work together to achieve this. The oversight that comes with a performance commitment should help to ensure the focus remains on this important area.

CCW action

We have facilitated a number of retailer and wholesaler forums where retailers were encouraged to share their strategies for engaging with customers on water efficiency, and to share any best practice.

We have been part of the RWG water efficiency group which has developed a guide for how retailers and wholesalers can work together to promote water efficiency to customers, which includes when and where wholesalers can directly engage with customers. This guide should help ensure customers are benefiting from the experience and expertise of both retailers and wholesalers in terms of water saving advice and any services on offer.

Ongoing action and next steps

It is positive that wholesalers have made the commitment that we recommended. To ensure that customers benefit from water efficiency advice, we will continue to work with retailers and wholesalers to advise and guide on how best to offer and communicate these services to customers.

Recommendation

Retailers to offer tailored water efficiency advice to customers to help them better manage their water use, as part of their competitive services for customers.

CCW action

Given the challenges created by climate change, it is important that everyone is striving to be as water efficient as possible. We continue to make sure this is a key area of focus in our biennial Testing the Waters business customer research. The insight on what customers are doing in this space provides vital insight for retailers in how they can tailor and improve their water efficiency advice and services. After the latest round of research was completed in 2024, we hosted industry workshops to share and discuss the findings, which also allowed retailers to share best practice with others.

Ongoing action and next steps

Our Testing the Waters research in 2024 showed that just 43% of business customers are engaging in water saving activity. This shows that more could be done to educate customers on their options, which we play a key role with retailers in helping to achieve. As part of our regular retailer forums, we will continue to facilitate discussions and sharing of ideas of how to provide quality water efficiency advice to customers. We will ask retailers to regularly update us with their plans so we can provide advice on how to communicate with customers, as well as helping them overcome any barriers to collaborating with wholesalers.

Recommendation

Wholesalers to have a clear plan for smart metering for business customers in their Water Resources Management Plans and PR24 business plans, and accelerate those plans where possible. These should include a targeted approach, prioritising the following areas:

• meters left unread for 12 months or longer
• water stressed areas
• high water users

CCW action

Since our recommendation, it is positive that all wholesalers have committed to a plan for smart metering in both their Water Resources Management Plans and PR24 business plans. This includes the commitment to install approximately 800,000 smart meters for business customers by 2030. Since making our recommendation, we have hosted forums with wholesalers to understand more about their plans for smart metering and overcoming the challenges associated with this. As part of these discussions, we have drawn on complaints data and research evidence to highlight the benefits that a wider rollout of smart meters would bring to business customers.

Ongoing action and next steps

While the commitments to smart metering are positive, we will continue to work with wholesalers, both through our regular company engagement and also in our forums, to urge them to target their smart meter rollouts to the priority groups included in our recommendation. Focusing on replacing long unread meters will ensure those customers are billed more accurately. Targeting meters in water stressed areas may produce wider benefits as a result of these customers being more aware of what they are using and taking steps to reduce their usage where necessary.

Recommendation

Wholesalers to ensure that data from smart meters is made available, understandable, presented in a consistent format and usable for retailers and customers.

CCW action

There is limited value for customers in having a smart meter if they don’t have full access to the data it provides and benefit from accurate bills based on smart meter readings. As part of our role on the Metering Committee, and the industry led advisory group, we are helping to develop the Smart Meter Read Hub, which will allow smart meter reads to be shared more easily and consistently between wholesalers and retailers. Retailers will be able to access this data and then share it with customers. This is a positive step forward and should ensure that customers are getting ready access to their data, as well as benefiting from more accurate bills.

As part of the RWG’s work, we were also involved in the development of an industry best practice guide on the minimum amount of communication that customers should receive before their smart meter is installed, and what happens after. This should help increase customers awareness of the benefits of smart metering.

Ongoing action and next steps

Through our membership of the Metering Committee and the industry advisory group, we will be part of the ongoing effort to make sure the Smart Meter Read Hub is fulfilling its purpose. If our complaints and research evidence show that customers with smart meters are not happy with the level of service, we will investigate whether this is due to the quality of data being shared with them and then push for this to be resolved. It is important that measures are put in place to ensure wholesalers can share smart meter readings with retailers in an effective and efficient way.

Alongside the RWG, we will monitor the effectiveness of the good practice guide. If our complaints and research evidence shows customer communication could be improved, or customers are struggling to access the data, we will push for improvements. We are about to undertake qualitative research with business customers on their expectations and experiences of smart meters installed at their premises. This will provide vital insight into what communication improvements could be made.

Recommendation

Improvements to be made to the code change process, following a review, from April 2023 so that it works better for businesses by:

• prioritising changes that have the greatest benefit for customers
• making the change process more transparent and accessible for wholesalers, retailers, market committees and key market stakeholders
• improving the end-to-end process by tailoring it to respond to each change request in a timely manner

CCW action

The new code change process was implemented in December 2023, which has helped to improve the end-to-end process and has a greater focus on changes that will benefit customers. CCW played an integral part of the new process development. We will continue to monitor this to ensure it is genuinely prioritising changes that will benefit customers.

Recommendation

Give  CCW the ability to raise a proposed change to the market rules, as part of an improved code change process.

CCW Action

As part of our involvement in developing the new code change process, we recommended that CCW be given the ability to raise code changes. This was agreed and anyone can now raise a change to the market codes, as part of the new process.

Recommendation

Wholesalers and retailers must work together with MOSL to complete a one-off data cleanse.

Develop and implement strong incentives for both wholesalers and retailers to ensure all new customer and market data is accurate through the new Market Performance Framework.

CCW action

We are playing a key role on the industry led working group that is overseeing the data cleanse completion. Led by MOSL, work is on course to be completed by the end of the year to correct customer address data, and remove ineligible premises from the retail market.

We have played a key role in the development of the new MPF to help develop strong incentives in this area. Accurate premises and customer address data is vital for customers as it allows their retailer to more easily identify the correct person for billing purposes and complete meter reading activities. Wholesalers (as the ones responsible for providing accurate address data) will now be strongly incentivised through BR-MEX to ensure this is maintained to a high standard.

Recommendation

Improve the change process for the Customer Protection Code of Practice to provide set timelines by which Ofwat must have completed its review of change proposals, and have consulted on its decision (if required). No change request should take longer than six months to be considered, consulted on and a decision made.

CCW action

Given the importance of the Customer Protection Code of Practice (CPCoP) for customers, it is vital that Ofwat reviews proposed changes within a reasonable set timescale. We have made the case for this change in response to three separate Ofwat consultations on their reforms to the CPCoP. Ofwat taking nearly two years to consult on our proposal to strengthen customer credit protection was used as a prime example of why change is needed. Despite a robust case being made, Ofwat has not agreed to a prescribed timeline for assessing such changes. Instead, Ofwat has amended the code to advise it will issue a notice by way of informing the industry when it has received a change request. We do not agree this goes far enough to improve the process.

Ongoing action and next steps

It is disappointing that Ofwat has not agreed to a set timeline for decisions on change proposals. In the absence of an overarching timeline, we believe there is a role for us in pressing Ofwat to make timely decisions on change requests on an individual basis, particularly where they will benefit customers.

Recommendation

Ofwat must set out circumstances and criteria where it will take action against retailers who do not follow the Customer Protection Code of Practice.

CCW action

In response to Ofwat’s review of the CPCoP, we urged Ofwat to explain the circumstances and criteria for taking action. We believe doing so would provide greater confidence to customers that failures to meet the code requirements are being dealt with robustly.  In response,  Ofwat explained these circumstances, and will require retailers to provide an annual compliance statement outlining how they are meeting all the requirements of the CPCoP. This then gives Ofwat the tools to quickly identify where retailers are not complying and then take steps to resolve this.

Ongoing action and next steps

While an annual statement of compliance is a sensible requirement on retailers, we expect more transparency. Where retailers have been identified as possibly not complying, we will expect Ofwat to investigate this swiftly and publish a notice outlining what action has been taken and how any customer impact has been rectified.

As well as continuing to work with Ofwat on this, we will be contacting retailers about the changes they have made in order to respond to the CPCoP requirements to ensure customers are being protected as they should. Where our engagement work and complaints evidence shows this isn’t happening, we will challenge retailers to do so.

Recommendation

Strengthened market rules to guarantee continuous service and protection of customers’ money when a retailer exits the retail market so that:

• businesses receive their credit back on an annual basis
• there are no gaps in service that impact businesses, including where there may be no backstop retailer to transfer to

Businesses receive credit back on annual basis – CCW’s Actions

In September 2024, Ofwat consulted on our change proposal to require retailers to annually reimburse their customers’ credit, where they pay by Direct Debit. Despite a well evidenced proposal, Ofwat decided against adopting this requirement. We do not believe this in the best interests of customers given the risk remains of credit being lost in the event of a retailer becoming insolvent.

However, Ofwat has made changes to the CPCoP that require retailers to advise customers in credit of their balance and the process for claiming a refund. This has to happen every 3 months at a minimum. Increasing customer awareness of their credit balances is positive and it would not have happened without our Credit Where It’s Due campaign.

As well as evidencing the impact on customers, it was also important to understand their preferences concerning how their credit balances should be treated. We carried out qualitative research in November 2024, which showed that more than two thirds of business customers would prefer to have automatic refunds of credit if this had been accrued based on an actual meter reading. Even when this was based on estimated readings, most felt strongly about receiving a refund even if it means an increased bill next time, particularly medium and large businesses. These findings have provided us with valuable evidence of what customers prefer, and we will continue to use this to campaign for credit protections to be strengthened.

Businesses receive credit back on annual basis – Ongoing actions and next steps

In addition to our research, we continue to share business customer complaints received by CCW with Ofwat so they are aware of the difficulties some customers continue to experience with obtaining credit refunds. We continue to push Ofwat to take action to fill this gap in protection for customers, evidenced by our complaints data.

We are also exploring whether the penalties that wholesalers and retailers pay when they fail to meet certain performance standards could be used (in part) to reimburse customers credit in the event of a retailer becoming insolvent. As MOSL oversee the collection of penalties, such a fund is likely to require co-ordination by them, so we will be exploring the practicalities of setting it up.

Gaps in service – CCW Actions

Along with others in the industry, we have helped develop a cost recovery mechanism which will allow a retailer taking on customers of a failed one to recover any excess costs incurred in doing so. It is hoped this will encourage more retailers to volunteer to be interim suppliers which will help address the risk of a gap in a customer’s service if their retailer becomes insolvent. This is a proposed change to the market codes which is currently being considered by Ofwat.

Gaps in service – Ongoing actions and next steps

Legislative change is needed to introduce a guaranteed supplier of last resort mechanism so customers definitely have a retailer to transfer to if their current one exits the market. We are pleased the Independent Water Commission report recognised this, so following on from the recommendation, we are committed to working with government to implement a solution.

Recommendation

Changes to be made to legislation and market codes to remove all temporary building supplies from the market with business customer premises only entering the retail market at the point when the permanent water connection is complete.

Wholesalers should be given clear responsibility for ensuring data on temporary building supplies is correct in the market until this change in legislation is enacted.

CCW’s actions

Alongside others in the industry, we have been building the evidence needed for a change is legislation, specifically to the definition of which type of premises are eligible for the business retail market.

We made the case for a legislative change in CCW’s response3 to the IWC’s review of the water industry. While the IWC’s report did not go on to make a specific recommendation for such a change, they did agree that the government should explore measures that could improve the functioning of the market. We believe the removal of temporary building supplies is needed to do this so we will be urging the government to take action.

Recommendation

There should be a change to the eligibility criteria in England unless tangible benefits are realised for micro-businesses, measurable by the rate of switching and contract re-negotiation.

We would expect the number of switches by businesses using up to 0.5Ml of water a year to increase by 10% points on the current levels in the next two years to 2025. Similarly, we want to see an increase in contract re-negotiation by 5% points for these customers by 2025. If these targets are not met within two years we will recommend a change in legislation.

The change we would be seeking is to amend the market eligibility threshold in England so both current and future customers, using up to 0.5Ml of water a year, are no longer eligible unless they have already switched retailer and re-negotiated their contract.

CCW actions

Our Testing the Waters research in 2024 showed that among those micro-businesses aware of the water market, 32% had either switched their retailer or re-negotiated their contract. This compared to around 24% in our 2022 tracking research, falling short of the expected activity levels within our recommendation.

In addition to our regular research, we commissioned CEPA to collate and analyse all relevant evidence on the experience of low water use businesses in the water retail market. This then provided us with an independent view on which to decide whether or not these businesses are truly benefiting from being in the open market in England, or whether they would see greater benefits from having their services provided by a water company.

Ongoing actions and next steps

Based on the evidence we have to date, we will not be recommending a change in legislation to remove low consumption customers from the market, at this current time. This view was informed by:

• The CEPA report concluding that while low consumption customers are not active in the market, nor receiving expected benefits, there is insufficient evidence they are suffering harm from being in the market.
• Examples such as the roll-out of smart metering, and the introduction of higher performance incentives under the new Market Performance Framework, could improve the overall experience of low consumption customers.

We will keep this position under review, collating and reviewing the latest data. We want to see clear evidence of these businesses benefiting from the market through an increase in engagement, along with increased customer satisfaction and improved customer service delivery.