Committee News Release
CENV 004/2004
9 November, 2004
MSPs BACK WATER SERVICES BILL
The Scottish Parliament's Environment and Rural Development Committee today endorsed the general principles of the Water Services etc (Scotland) Bill.
In its Stage 1 Report, the Committee welcomed the proposals in Part 1 of the Bill to reform the regulation of the water industry. The Bill will replace the current Water Industry Commissioner with a Commission of four to six members. However, the Committee was concerned to make sure that customers are well represented in the system and that individual complaints are properly handled. The Committee has reserved judgement on these proposals until it takes more evidence before Stage 2.
The Committee supported the proposals in Part 2 of the Bill to regulate competition in the water industry. The Bill prohibits anyone other than Scottish Water from using the public water and sewerage networks. It also introduces a licensing system for companies who want to compete to provide retail water and sewerage services to business customers. While the Committee welcomes these proposals, it wants to see competition managed in a way that allows Scottish Water to remain a stable and efficient public provider.
The Committee endorsed proposals for a new procedure for determining water charges. It has recommended that this process should be made even more transparent and allow customer interests to be included.
The Committee also supported proposals in Part 3 of the Bill for dealing with water pollution from abandoned coal mines. It recommended that the Minister should consider whether similar powers are needed to deal with pollution from other mineral workings and landfill sites.
Committee Convener Sarah Boyack said:
“The Committee wants to see a water industry in Scotland that is strong and efficient, and which works in the best interests of all its customers. This is of huge importance to Scotland's economic development as well as its environment. The way the industry is run and paid for is also a major social policy issue. The Bill takes an important step forward in improving the regulation and governance of the industry.
“Achieving the correct balance between legitimate competition and the desire for stability in the industry is not easy, but our Committee believes that the new framework set out in the Bill goes a long way to achieving this.
“However, our Committee has asked the Minister to consider and act on our recommendations before we debate the detail of the Bill at Stage 2 . We have made a number of recommendations which we believe would improve the Bill, and have asked him to investigate and clarify several issues. The Committee is particularly concerned, along with the Finance Committee, that further work needs to be done on the costs assumptions before the impact of the Bill can be properly managed.
“Our Committee welcomes the Bill and recommends that the full Parliament approves it at the Stage 1 debate on 17 November 2004.”
One member of the Committee (Alex Johnstone MSP) dissented with the Committee's conclusions on the issue of regulating competition in the water industry.
While the Committee was considering the Bill, the Executive was also running two major consultations which will shape the water industry for the next few years. The first consultation relates to the investment priorities for 2006-14; the other relates to the principles which should underpin water charges for 2006-10.
The Committee heard a substantial amount of evidence on these issues and its report contains a number of comments on the consultations. These include recommendations that:
- Investment in new water and drainage infrastructure to allow housing and commercial development must be a priority. But it is complex, and decisions on prioritising projects must be integrated properly with the processes for local and structure planning.
- Tackling odour nuisance from waste water treatment works must be a priority. The Minister should consider using the Bill to set up a statutory code for tackling this.
- Scottish Water should have flexible contingency funds to be able to tackle emergencies and unforeseen investment needs.
- The Minister should publish detailed information on the winners and losers in any proposed changes to charging structures.
- The Minister should seriously consider how water conservation measures and incentives for efficient water use can be built into charging systems and the regulation of the industry.
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