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Does your company have a water strategy? taking control of your water costs will pay dividends.
Author: Graham Mann, Water Audit Expert.
Have you ever wondered what your companies water and waste water charges are? Ask the question as it may surprise you. It is an overhead cost that can be quite significant and a drain on resources, excuse the pun.
On a serious matter, it is highly likely the water bills you are paying are at least 35% higher than they should be, it is also highly likely dependant on which water company bills you for water services that you are being overcharged, conversely what others may not tell you undercharged, which is worse a £ 5,000, £ 10,000 or even £ 100,000 back charge which is entirely possible. This of course would have an impact to your business and it does happen with increased frequency I assure you, in fact I have a case now in Scotland £ 87,000 on a single site operation.
Water companies are actively pursuing back charges as they seek to get their house in order, the thing is, and this is a fact not all back charge claims are payable and without the expertise gained over many years companies will struggle to refute unjustified claims or negotiate them down significantly and will without doubt pay more than they should.
I saw an extreme example of this when a private leisure park in North Yorkshire which is a family run business of over 600 pitches was slapped with a back charge from Yorkshire Water for over £ 160,000, at the time this was out of season and the business had no cash to settle the account. The business owners consulted lawyers who then googled H²O Building Services, I visited the business and it was clear enforcement of this number would have crippled them. Initial negotiations fell on deaf ears, the water company were simply not interested whether the business went bust or not. After many months information gathering as the case was very complex with the need to copy records dating back over 20 years we called in the water company and after 3 hours of negotiations settled on £ 30,000. The point is there are 1,000’s of cases like this one in England, Scotland and Wales.
Not all bad news – Refunds – Ah yes well here is the latest this case goes back over 15 years £ 10,293. But this could just as easily have been a back charge.
The water industry is changing, there will over the next few years be much more media attention and focus on the water industry as costs rise and the English water retail market opens up to competition. English and Welsh water and waste water companies will come under increased scrutiny, it is therefore imperative that companies are in an organised position to take full advantage of the changing market conditions.
Does your company have a water strategy?
What is a water strategy? – Businesses have a corporate social responsibility target to achieve but little knowledge of how the solution should be delivered, there are major risks of a corporate water strategy, financial, environmental, health and safety regulations to name but a few. The risks should be assessed and quantified and at the top of the list for many companies will be financial, what is our exposure to water companies back charging, are we paying the correct charges, what are the opportunities for savings, reducing water consumption in and waste out, asset protection in the form of water leakage, cross connections from companies foul waste water pipes into surface water pipes, illegal discharges to water course and controlled waters.
There are a great many facets to consider, my overall advice is appoint a water cost reduction expert, aim for the most experienced firm as there is no substitute for experience, analyse their case studies and client references and do not consider water auditing firms that are seeking share of savings deals these type of deals are based on a % of forward savings, and a % of any historical refunds secured or reduced back charges in the form of a credit on the account. If your company does go down the share of savings going forwards deal you will pay considerably more for the same results.
Water strategy’s are bespoke for each individual business and are tailored to suite, so the advice is simple start now! benefit from reduced costs going forwards, full fill your environmental and corporate obligations and be ready to take full advantage of the opportunities in the English and Welsh water retail market.