Chamber and committees

The Scottish Government is in the process of developing the Principles of Charging document for the period 2021-27. As part of this process, we will work with stakeholders and customers to explore the discounts which apply to water charges.

Changes to water charges affect nearly all household and business customers in Scotland. The Scottish Government welcomes input from all customers when considering the principles which apply to water charges.

It is understood that this question relates to “deemed contracts” in terms of s.20A of the Water Services etc. (Scotland) Act 2005. This section applies to licensed providers and end-customers rather than to Scottish Water. The terms of the scheme are operated by the Water Industry Commission for Scotland (WICS).

The effect of s.20A is to “deem” that arrangements have been made between the licensed provider and the occupier of premises in circumstances where water is supplied to, or waste water is disposed of from, eligible premises in circumstances where the licensed provider and the occupier have not taken the necessary steps to “make arrangements” for these services but the services are, as a matter of fact, made available. The effect is to ensure that the occupiers of premises which have water and waste services are required to pay for those services and cannot avoid liability for payment for the available service by avoiding taking the steps necessary on their part to “make arrangements” with the licensed provider.

WICS is required, under s.20B, to set out the terms and conditions which will be incorporated into any arrangements which are deemed, under s.20A, to have been made between the licensed provider and the occupier of the premises. A copy of WICS’ deemed contracts scheme is available at https://www.watercommission.co.uk/view_Deemed_Contracts.aspx .

Scottish Water can make payment to customers as a result of asset failures that have triggered Service Standard payments or claims made and settled via Scottish Water’s Public Liability Insurance.

Scottish Water supplies water and waste water services to over 5 million customers across Scotland via 60,000 miles of pipes and thousands of assets. If there is an asset failure (such as flooding caused by a burst water pipe) which has affected customers and Scottish Water is liable, these claims are fully assessed and settled via Public Liability Insurance. Scottish Water also operates under an agreed Service Standards framework to also protect customers’ interests and pay where there is a service failure.

Scottish Water’s Service Standards can be viewed at: https://www.scottishwater.co.uk/contact-us/our-promise-to-you/our-services-your-rights/our-service-standards

The payments listed below are for Public Liability cases over the last 4 years.

Public Liability Compensation Payments to Customers by Scottish Water

Discussions between Ministers preceded the publication of the consultation paper Investing in and paying for your water services from 2021 .

When a dwelling stops being a dwelling, the local rating assessor will remove the Council Tax banding from the premises record and the local authority will automatically stop charging Council Tax based on unmeasured household water industry charges that would have been included with the Council Tax demand. If the premises is now being used for non-household purposes, the local assessor will create a new rateable value for the premises, triggering Scottish Water to add the premises to the non-household retail market – at which point the occupier of the premises will be charged non-household charges by a service provider licenced to operate in the water industry’s retail market.

If a non-household premises becomes a dwelling, the assessor will give the premises a Council Tax banding and the local authority will automatically start to charge unmeasured household water charges. If the premises is only used as a dwelling, the removal of the premises from the local assessor’s record of non-household premises will prompt Scottish Water to remove the premises from the non-household retail market and non-household charges will end.

In some instances part of a non-household premises may be converted into a dwelling or part of a dwelling may be converted for non-household use. In these instances either separate household and business charges may be applied or, in some situations, a water meter may record the water used in the dwelling and the business, in which case the occupier of the business will be charged for all of the water used by the business and the dwelling. Where the household water use is included in a metered bill, Scottish Water will instruct the local authority to stop applying unmeasured household charges.

The Scottish Government will work with all relevant interests before making any changes to the discounts which apply to water and sewerage charges.

The Scottish Government is a member and participant of the multi-stakeholder group. As the member was advised in the answer to
‎ S5W-20806, the group provides a forum to explore topics included within the Water Industry Commission for Scotland’s decision papers ( https://www.watercommission.co.uk/view_Decision_Papers.aspx ). As Scottish Ministers are responsible for determining the principles that should underpin customer charges, it is essential to engage with the water industry.

The multi-stakeholder group was formed for the purpose of discussing key themes identified in the course of the Strategic Review of Charges.

I refer the member to the answer to S5W-20806 on 16 January 2019. All answers to written parliamentary questions are available on the Parliament's website, the search facility for which can be found at http://www.parliament.scot/parliamentarybusiness/28877.aspx .