Limits on water charges for 2006 to 2010 have been published by the Water Industry Commission which has announced that it expects Scottish Water to achieve all of the objectives set for it without real term increases in average water charges.

The limits take account of a new charging regime for businesses, which will benefit firms to the tune of £44 million next year, and of a new reduction scheme for up to 120,000 low income households, which will cut bills by up to 25%.

The Scottish Executive’s Environment Minister Rhona Brankin said: “Today’s announcement is an important milestone in the Executive’s drive to create a modern and efficient public water service in Scotland.

“It presents the prospect of one of the largest ever programmes of investment in UK water services being delivered without the need for real term increases in water charges.

“The creation of an independent Commission was agreed by Parliament as the best way of delivering improvements in standards and capacity at lowest cost to customers.

“I welcome the Commission’s assessment that Scottish Water should be able to achieve our objectives of delivering cleaner rivers and beaches, better quality drinking water, higher customer standards and support for new housing and economic development without charges rising above inflation.

“This is particularly good news for those low income households that will, for the first time, be eligible for a reduction in charges of up to 25%.

“There is good news too for business customers who will benefit by £44 million next year when a new charging regime is introduced.”

Scottish Water has two months to consider the contents of the commission’s determination of charges.

If it concludes that the determination does not provide it with enough income to allow it to meet its statutory obligations it will be able to make a case for higher charges to the Competition Commission.

The Water Industry Commission for Scotland was established on July 1, 2005 to replace the Water Industry Commissioner as the independent economic regulator of Scottish Water.

Under the Water Industry (Scotland) Act 2002, as amended by the Water Services etc. (Scotland) Act 2005, it has a statutory duty to ensure that Scottish Water has sufficient financial resources to enable it to achieve, at lowest reasonable overall cost, whatever objectives the executive sets for Scottish Water in any given period.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie