Water Prices in Scotland Kept Below Inflation Until 2015

Posted: Friday 8th January 2010

· Households, the public sector and businesses will benefit from a price freeze next April · Scottish Water is being financed to deliver the investment objectives of the Scottish Government · Customer service will improve to match that provided by the top performing companies in England and Wales

The Water Industry Commission for Scotland (WICS) has announced that charges for households, the public sector and businesses would increase at five per cent below inflation over the next five years.

There will be a price freeze in April 2010 and, subject to inflation, the prospect of a further freeze in 2011.

Thereafter, charges would increase at less than the rate of inflation between 2012 and 2015.

Many public sector and business customers may be able to negotiate an even better deal under the retail competition framework, or reduce their bills by helping Scottish Water to lower its costs.

Scottish Water is also required to reduce its leakage by at least a third by 2014 and to investigate reducing the volume of ground water unnecessarily entering the sewage system. It is being financed to deliver a further large capital programme to:

· Improve Glasgow’s drainage;

· Meet important and urgent needs identified through robust studies from unallocated investment of £180 million;

· Invest in renewable energy.

The financial position of Scottish Water should remain robust, boding well for future charges. Charges would not be affected by any changes in Scottish Water’s financing arrangements.

The Final Determination also finances a number of other initiatives to encourage a greener water industry. These include:

· Household metering trials, including the use of different tariffs;

· Work with landowners to manage water catchments; and

· Support to property developers in introducing more sustainable practices.

Alan Sutherland, Chief Executive of WICS, said: “We are pleased that our Final Determination offers some good news to customers during continued global economic uncertainty but, at the same time, allows for a sustainable future for the Scottish water industry.

“Scottish consumers will see their charges kept at levels below inflation over the next five years but also see a marked improvement in customer service and the public health and environmental improvements which will benefit Scotland for many years to come.”

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