Modernising the Water Industry's Use of Rateable Value to Charge Non-Households for Water and Sewerage Services

Foreword

Thriving businesses underpin Scotland's economic growth and future prosperity. Our approach to charging for water services has an important part to play in this.

In our Statement on the Principles of Charging for Water Services ^[1] we confirmed that surface water and roads drainage charges ^[2] should continue to be calculated by reference to Rateable Values.

We decided that there is a need to improve the consistency in the way that Rateable Values are used for charging purposes by the water industry and that this should be achieved by using the Rateable Values most recently assigned by the Assessors. Currently, the historic Rateable Values used to calculate charges for the majority of businesses are generally not the same as the rateable values in the current valuation roll used for Business Rates purposes. As a consequence there are significant differences between the amounts charged for similar premises. This is inconsistent with our principles of cost reflective and harmonised charges.

The move to use the most recent Rateable Values assigned by the Assessor is not designed as a revenue generating measure and therefore charges will be revised to ensure that income levels are sufficient to generate no more income than allowed by Scottish Water's economic regulator, the Water Industry Commission for Scotland.

The Scottish Government recognises that an unavoidable consequence of moving to the Rateable Values most recently assigned by the Assessor will mean that some businesses will benefit from charge reductions, while others will see their charges increase.

I invite you to express your views on the details and timing of the change to use current Rateable Values to calculate drainage charges. Should you prefer a face-to-face discussion, please indicate this in your reply. My officials are keen to discuss these proposals with the business sector in particular and to ensure affected organisations are prepared for the changes.

The Government will confirm the arrangements in Winter 2016.

Roseanna Cunningham
MSP