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Paying for Water Services 2006-2010
 FOREWORD
As a country rich in water resources, we have been guilty in the past of taking
those resources for granted. We underestimated what it takes to turn water in
lochs and rivers into safe drinking water at taps in homes across the country.
We did not appreciate fully what needs to be done to treat wastewater so that
it can be discharged safely into rivers and the sea. As a result there were
many years in which we spent less on our water and sewerage services than we
should have done.
In recent years, the Executive has been addressing this underinvestment and
the consequences that it has had for drinking water quality and the environment.
We created Scottish Water as the means of delivering a major programme of improvements
in quality and standards over the four years from 2002. To ensure that this
programme was delivered at least cost to the customer, Scottish Water was made
subject to rigorous regulation by its economic regulator, the Water Industry
Commissioner for Scotland, and by its quality regulators the Scottish Environment
Protection Agency and the Drinking Water Quality Regulator for Scotland.
The benefits of this approach are beginning to emerge. The programme of improvements
was estimated to cost £2.3 billion originally. Following scrutiny by the Commissioner,
Scottish Water was set the target of delivering it for £1.8 billion. It is on
course to achieve this target - saving customers a total of £500 million over
four years. The Commissioner also set Scottish Water the challenging target
of reducing its annual operating costs from £380 million in 2002 to £265 million
in 2006. Scottish Water is on course to achieve this target too, thereby reducing
its cost base by one third and easing pressure on future charge levels.
These are impressive achievements, but it is clear that further substantial
improvements are required in quality and standards and in the efficiency with
which they are delivered. The Water Services etc. (Scotland) Bill will assist
this process by strengthening the operation of economic regulation and by making
these operations transparent to customers and their representatives.
As part of the new process the Executive must decide on the standards and objectives
that Scottish Water should meet. It must decide too on the principles that should
be applied in sharing between customers the cost of delivering the standards
and objectives.
These decisions affect almost every household in the country and a wide range
of business and other customers too. They will determine the quality of service
that Scottish Water provides to customers as individuals and to society as a
whole and also the charges that customers will have to pay for these services.
Before we make these decisions, it is important that we understand the views
of those who will be affected by them. Therefore, we are consulting on both
sets of issues.
Paying for Water Services 2006-10 seeks views on the approach
that we should adopt in charging different customer groups for water service
in the period 1 April 2006 to 31 March 2010.
The accompanying paper, Investing in Water Services 2006-14,
seeks views on the scale and content of future investment in our water and sewerage
services in the period from 1 April 2006 to 31 March 2014.
Both papers outline plans for enabling stakeholders to discuss the issues raised
in them with the Executive and with other stakeholders.
I hope that everyone with an interest in water services and the impact that
they have on families, public health, the environment and business will take
the time to consider the papers and by whatever means will participate in the
discussion that the papers are intended to generate.
Ross Finnie, MSP
Minister for Environment and Rural Development
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