Ofwat has proposed plans to open up the water market, allowing new companies to compete for contracts.
The water services regulation authority, Ofwat has submitted proposals, dubbed Water 2020 which would allow new firms to enter the water market. It is thought that by removing restrictions on new firms competing for water contracts, customers could save up to £1bn by 2020.
The proposals aim to increase water trading across various regions of the UK to ensure resources are being used to their full potential, with the population expected to rise by 20% over the next 20 years. An information platform to help new companies offer better value services has also been recommended to improve the competitiveness of the market.
Ofwat also wants to encourage the extraction of natural gas from wastewater sludge to help meet the UK's energy needs and improve the sustainability of the industry.
Cathryn Ross, Ofwat Chief Executive said: "Supplies are already stretched in areas where the population is rising. We want to kick start water trading where this will help keep bills down and stop us taking too much water from our rivers. We also want to de-regulate to free up scope for companies to make better use of sewage sludge to help meet their own and the country's energy needs."
"If we can encourage companies to innovate and to truly understand what customers want now and in the future, we will be in a strong position to maintain trust and confidence in this vital public service."
A consultation on the proposals is currently taking place which has been given an end date of the 10th February 2016.