30 April 2004
The post of water regulator in Scotland is to be scrapped and his responsibilities transferred to a board of non-executive experts, Environment Minister Ross Finnie has announced.
The change is part of a radical shake-up of the system following a highly critical report by the Scottish Parliament's influential finance committee.
Finnie's decision means that the post of water industry commissioner, currently held by Alan Sutherland, will be abolished and replaced by a Water Industry Commission for Scotland headed by a chief executive.
The new body will be empowered to set limits on Scottish Water's charges. One of its objectives will be to increase transparency and public consultation on the proposed limits.
The action follows the finance committee's investigation into concerns over a lack of transparency, poor consultation and the impact of sudden substantial increases in water charges for small business users. Some charges went up by 500%.
The committee also looked at the way water charges were harmonised and Scottish Water's lack of progress in meeting investment and efficiency targets. In its conclusions, the committee identified a perceived conflict of interest over the commissioner's role as both regulator and customer champion. It recommended there should be an improved and more independent regulatory structure.
Scottish Water was set up two years ago, replacing three separate authorities which operated different charge levels. On the recent steps to harmonise charges across Scotland, the committee criticised Scottish Water and the commissioner for failing to debate and consult openly.
The committee, which was divided on some of the issues, called for a much more detailed examination of the appropriate amount of investment and borrowing by the water industry in Scotland.
The report was published just days after the commissioner issued his own report, saying that Scottish Water was making 'slow progress' in delivering vital improvements to public health and the environment.
Finnie said the Executive agreed with the finance committee's conclusion that robust, transparent and economic regulation had a crucial role to play in ensuring that Scottish Water becomes more efficient. It recognised that this required a number of changes to the current regulatory regime, Finnie said. The changes will be made in the forthcoming Water Services (Scotland) Bill.
PFapr2004
