25 March 2021

Has one-size-fits-all ever actually fit?


By Sarah McMath, CEO of MOSL

‘One-size-fits-all’ is a term I struggle with. It sounds sensible, but it hardly ever works. It doesn’t work for clothing. It doesn’t work for marketing. It doesn’t work for customer service. And it certainly doesn’t work for a market as complex and diverse as the one we operate.

As CEO of MOSL, the market operator for the non-household market, I have been challenging the one-size-fits-all model for the past 18 months, particularly in light of our increasing focus on better understanding customer and consumption data and our response to the events of the last year.

We operate a market with a diverse membership – from incumbent water companies, to smaller new entrant retailers, as well as customers who opted to ‘self-supply’ their retail services. Each have their own priorities and expectations of MOSL and the market. In turn, customers have different levels of engagement, needs for their supplier and drivers for offerings such as water efficiency.

Put simply, in a market with over 1.2 million eligible customers, ‘one-size fits all’ is too simple and drives value out of the market.

Customers, trading parties and the market codes (the market “rules”) are three areas we need to be more tailored, value-oriented and move away from the ‘one-size-fits-all’ assumption.


The last year has proved, as we collectively sought to stabilise the market, not all customers are the same. MOSL’s initial focus was on analysing the non-household customer base by industry type to understand the impacts on water consumption and cashflow. This enabled us to act and mitigate the impact on business customers and ensure retailers did not fail due to liquidity challenges.

Customers and industries have been impacted differently. Hospitality businesses had to close for extended periods, while customers such as supermarkets and some manufacturers may have seen their water consumption increase. Adopting a ‘one-size-fits-all’ approach to data and mitigating risks limits our ability to identify and respond to customers’ individual needs and leads to a poorer customer experience.

This approach also restricts the realisation of water efficiency in the market. Non-household customers use approximately 30 per cent of all the water consumed in England – with the largest one per cent consuming 50 per cent of the market’s total.

It is essential we develop a consistent approach and granular understanding of water consumption patterns across different sectors and geographical areas. Government recognises this, with the Environment Agency recently consulting on designating more areas as being water stressed and its National Framework for Water Resources highlighting the importance of understanding industrial needs in each region.

We are working with the Department for Education (DfE) to understand how schools use water, the associated costs and how active they are in the market. The DfE shared location data for schools which we matched against supply points to build a picture of water usage.

This work showed that schools use a total of around 12,000 million litres per day, spending more than £40 million every year. We can also work out the use, cost and carbon footprint of water on a per pupil basis. This gives the DfE and schools much better insight and helps them make the case for investing in water saving. We hope to do this with other industries, such as food and drink manufacturers, to further water efficiency by adding insight to the central market data we hold.

This is one example of how we can identify value and support water efficiency savings, but it’s also important to understand, and challenge, where value is being lost in the market.

A prime example of this is the frequency of meter reading. Under the current market codes retailers have to submit a minimum of two meter readings every year, but 80 per cent of NHH customers use the same – or less – water than the average household.

So why should we treat supply points such as horse troughs, fountains or corner shops the same way as a factory or brewery using millions of litres a day? We estimate meter reading costs the market around £8.5 million per year. The requirement to read meters for low consumption/low risk customers has a direct cost for retailers in a market with low margins and is driving out value.

A good example of this is a customer’s experience I spoke about at this year’s Utility Week Customer Summit.

A customer has three meters supplying one shop, with two using less water than the average household and the other capped with zero consumption. Their annual water bill is around £400, and their meters must be read twice a year. The retailer’s margin is capped at 2.5% and a simple meter read may cost anywhere between £2 and £20 – potentially washing away their profit. This is before any additional work to locate the meter is factored in.

As we look towards 2021/22 and our key improvement programmes such as Data Insight and our Strategic Metering Review, we must ask challenging questions about the way the market is structured and governed.

And, most importantly, if it’s not working for customers and not driving value, why are we doing it?

Market Codes

As the market dynamics have changed since market opening, it is essential its governance remains ‘fit for purpose’ and reduces, rather than creates, ‘pain points’.

Since the market opened, 144 code changes have been raised, 106 have been approved by Ofwat and 115 have been implemented (including those raised pre-market opening).

Code complexity increases direct and indirect costs to trading parties. Currently all changes (except those given ‘urgent’ status) are required to follow the same process. This means significant time and resource is invested in reviewing simple housekeeping changes, as well as more complex ones which require substantial system, codes, and behavioural changes.

All change proposals must go through the industry Panel and be recommended to Ofwat. This is important when they have a direct impact on both trading parties and customers but is a significant drain on value for those which are simply “tidying up”.

Through our Market Governance and Market Code Simplification improvement programmes, we will embed improved governance structures and code principles based on the findings from the 2020/21 Panel Effectiveness Review. The review has identified improvements in governance structures, working practices and behaviours to make market governance easier to understand, more transparent and responsive.

Trading parties

Just as we can’t treat all customers the same, we can’t treat all trading parties – the wholesalers and retailers who operate in the market – the same.

In March 2021, the market had 75 trading parties, each with different customer portfolios and drivers for entering and operating in the market. Some operate nationally, some regionally, and some are limited companies which serve customers in an area which previously covered by an incumbent monopoly provider.

These factors influence their needs and expectations of MOSL and the market. By treating all trading parties the same, we limit the ability to create a level playing field for all and stifle benefits to customers.

This is also true of the way we engage with different trading parties. Whilst most trading parties are actively engaged and collaborating to build a better market, some have had minimal engagement since their entry.

As part of an ongoing review and our commitment to drive value, increase transparency and deliver efficiencies across both MOSL and the market, we are looking at the status of dormant trading parties. These are retailers that may not have taken on customers (some through choice) since being granted their licence from Ofwat and their membership from MOSL. The review also considers those who may be disengaged from the ongoing operation and evolution of the market.

We are currently undertaking work to assess the market reassurance process to ensure it is fit for purpose. As part of this we will examine the voting rights for truly dormant trading parties, the current charging regime, as well as training and access to CMOS and market data.

This review will ensure we have robust processes in place to track our compliance and trading parties’ reassurance and check we are not introducing barriers to entry, so the market can continue evolving for customers’ benefit.


As I said at the beginning, ‘one-size fits all’ is too simple and drives value out of the market. I’ve outlined three areas where this is demonstrably true, and I don’t doubt there are other examples of where we need to continue to challenge to ensure the market is successful.

As we reflect on the last year, and start delivering our first three-year business plan, we have an opportunity to assess where we are, the lessons we have learnt and, crucially, what improvements are needed to unlock value and choice for customers.

You can also read, like and comment on the blog on LinkedIn and find out more in Sarah's upcoming interview with Karma Loveday in The Water Report.

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