Investing in and paying for water services: consultation

Foreword

In the 2015-21 regulatory period Scottish Water has continued to make good progress in creating the improving and high performing water and wastewater services that we need. The Government is determined to build on that progress in the next regulatory period (2021-27) and beyond.

This is a long term industry and we must ensure that we take an appropriately long term view of its needs. The challenges that lie ahead are clear. The imperative of repairing and refurbishing key assets as they age is significant and must be carefully planned. Economic growth must be supported and population growth and movement catered for. Scottish Water is already responding to the impacts of climate change, but during 2019 the First Minister recognised the global climate emergency and responded by setting world-leading climate change targets. Scottish Water has already stepped up, by committing to increase the renewable energy generated or hosted on its land and assets to three times its annual energy usage by 2030 and to achieve net zero emissions by 2040. Research undertaken by Scottish Water, the Customer Forum and other industry stakeholders shows that customers rightly expect Scottish Water to address these issues. However, these factors mean that to sustain Scottish Water's level of performance, future levels of investment must rise.

This makes the process of determining charges for the 2021-27 period particularly important. It is likely that we shall see higher levels of charges in future to meet those increasing investment needs. We must therefore ensure that resources are planned and used efficiently so that customers benefit.

The documents on which we are now consulting set the parameters for the charge review. We consulted on initial drafts in 2018 – these revised drafts seek your views on the final draft documents, which reflect both the feedback gathered during the 2018 consultation and other developments.

Last year the Scottish Government, Scottish Water and other industry stakeholders came together to co-create a long term vision, which describes the future industry we are working together to build to meet the needs of customers and society. I welcome this long term vision, which is fully aligned with the Government's National Performance Framework and the UN Sustainable Development Goals. I fully expect Scottish Water to take the lead in realising this vision during the next regulatory period and beyond. This expectation is now clearly set out in these documents.

Key changes have also been made to reflect the need to respond to the climate emergency and to introduce additional support for customers who might face difficulty paying bills. New proposals have also been included to expand the domestic customer base, ensuring all customers receiving a service are paying for it where it is appropriate for them to do so, and to introduce new arrangements associated with providing capacity in network assets to support development.

I have been impressed by how Scottish Water and its stakeholders are working closely together using the principles of ethical business regulation – this is a new and exciting approach, which is possible because of the high levels of trust and respect between Scottish Water and its stakeholders. As a publicly owned utility we expect Scottish Water to do nothing other than the right thing and continually work to show that it deserves the high level of trust that we place in it.

I look forward to receiving your views on these draft documents so that we can work together to ensure the sustained success of Scotland's publicly owned water industry that fully serves our needs and of which we can all be proud.

Roseanna Cunningham

MSP

Purpose of Engagement

The availability of wholesome drinking water and the safe treatment of wastewater are crucial to public health and a clean environment. In July 2018, the Government consulted on its proposals for the policy framework which will guide Scottish Water in the 2021-27 period.

That consultation gave broad support for the proposed framework. However, in the light of detailed comments received and some further developments in the interim, a number of important changes have been made.

Views are now invited on these changes, in particular on:

• Improving support for customers facing difficulty paying their bills.
• Bringing vacant dwellings into charge.
• Meeting the costs of providing additional capacity to support development.
• Responding to the climate emergency.
• Creating a long term vision for Scotland's water industry.

The paragraphs below describe these changes. To allow you to consider them in the context of the full policy framework, the full updated documents can be found in Annex B and Annex C.

If you would like to comment on the issues raised in this paper please respond via Citizen Space at https://consult.gov.scot/energy-and-climate-change-directorate/water-services-final-consultation. The closing date for responses is 5th April 2020.

Information gathered from this process will inform Ministers' final decisions on the policy framework that should apply to the Scottish water industry in the next regulatory period.

We welcome early responses.