The recent very dry summer has raised questions about the reliability of water supplies and the need to use it more efficiently. But what can businesses do if the government decides the answer is that they should pay more for water use?
In some ways, the position of business water users is a privileged one compared to that of household users, because businesses can switch water supplier. Indeed, our switching service offers you a great way to find a better deal and seamlessly move your business over.
However, the privilege may be seen in other terms as well, not least in the price being paid for water.
Why Is Water Usage Such A Concern In The UK?
There is a consensus that the UK needs to increase and improve its water use and resources, from the building of new reservoirs to better management of existing resources by reducing leaks and eliminating sewage dumping in rivers and lakes.
However, there is also the question of water usage itself, and how much households and businesses alike can do to save water.
This can include smart solutions like rainwater harvesting for use in toilets, as well as crude measures such as hosepipe bans during droughts.
To some, this may seem unfair, as the pressure is borne most by households whose gardens wither in the summer sun during dry spells, not water-hungry businesses, at least some of which might manage to use less water without suffering any detrimental effects.
Could The Way Businesses Pay For Water Change?
This is the sentiment expressed in a recent Guardian article, covering the suggestion that the answer lies in charging business water users more to encourage them to be more frugal.
It reported that ministers are considering a request by the Environment Agency (EA) to consider this.
Speaking to the paper, director of water at the EA Helen Wakeham noted that the current arrangements are as follows:
- Anyone needing an abstraction licence pays the EA a fee for it
- This is not related to the cost of that water
- This means that for large water users, the effective cost is lower the more they use
- That is in contrast with domestic users, who are being hit with higher bills
She added that there has been a “lively conversation” about a possible change to “completely reframe the way we value and pay for water”.
Ms Wakefield added: “It’s the beginning of a conversation, but ministers have asked us to look at the value of water and how our abstraction licensing system works.”
If the licensing system changes in a way that means businesses either face direct higher costs or, as a result of being supplied water by a supplier who has had to pay more, have the cost passed on to them, the results might be very concerning.
The article highlighted the case of data centres, whose high water use is proving controversial, especially as many more are planned. Ms Wakeham suggested data centres are “water-hungry because water is so cheap”.
What Would Higher Water Costs Mean For Farms And Factories?
However, data centres are just one of a great many commercial water users. Some may prompt mixed feelings, such as golf courses (depending on one’s sporting interests), but it may also be considered just how vital water is for some commercial users.
An obvious example might be food and drink companies for whom water is a key ingredient in their products, but an even bigger user is the agriculture sector. In drought conditions, extra water may be invaluable to save the harvest.
Climate change and the very hot, dry summer have already had a major impact on the 2026 harvest:
- Many farmers started harvesting in July, the earliest they had ever started
- Wheat on lighter land has seen lower yields and lower quality
- On the plus side, crops grown on heavier land have still done well
In the longer run, climate change may markedly affect the type of crops the UK grows. There may be many more vineyards and fewer fields of potatoes.
Could More Expensive Abstraction Licences Hurt Farms With Their Own Reservoirs?
For many farmers, a lack of rainfall can be financially crippling. If summers are to bring regular droughts, more water is needed, along with methods of irrigation.
In some cases, the solution can be found in the establishment of reservoirs on farmland, dedicated to capturing water in winter, which can be redirected in the dry months. This is something bodies like the National Farmers Union (NFU) have supported and advised on.
But this is not a complete solution, especially as surface reservoirs will be vulnerable to evaporation.
Moreover, even if the farm is on the farm’s private land, an abstraction licence will still be required. Since this is something the EA is considering making businesses pay more for, the financial viability of using reservoirs may be under threat.
Of course, it could be that if ministers take the advice of the EA on board, they will carefully consider whether to create some mechanism by which users such as farms and the food and drink sectors are given financial help, or discounts for using their own reservoirs.
However, that would be to define some business water users as being more of a priority than others, which, given that they are all commercial enterprises, opens up the argument that some are being treated as more equal than others.
The government may resist pressure on that issue, for example by granting the EA the right to charge more for extraction licences to those either directly sourcing water or suppliers providing it to certain users.
After all, it may be reasoned, humanity has managed without AI until now, but not food.
What Can Your Firm Do To Keep Water Costs Down?
Either way, the possibility of higher water prices for businesses is sure to be a concern, especially for those that can do nothing about it. After all, farmers cannot make it rain.
The one thing you can do, even before the government makes any decisions about the cost of water for businesses, is look around for a better deal.
It may be that you can not only find a better price, but a supplier who can help with matters such as establishing a reservoir or a well, the use of grey water or other steps that you can take to avoid waste and use water more efficiently.
Not only would this be financially beneficial, but it could also help to increase your production, whether you are making goods in a factory or growing crops in a field.
