Scottish Water customers will see their bills increase by 5% from April 2023, which will bring average charges for water and sewerage up by £19.25 annually, the company has said.
The bill rise, which is collected through council tax payments, is more modest than the company had laid out in its business plan for the current investment period. This is to reflect the financial difficulties faced by householders.
For 2021-27, Scottish Water, its regulators and government agreed to a more substantial investment allowance to ensure essential upgrades to aging infrastructure and to boost resilience against climate change.
Last week, deputy director of water policy at Scottish government, Jon Rathgen, told the Utility Week Wastewater Conference the predicted charge increase of CPI plus 2% was not feasible due to the cost-of-living crisis.
At the start of the current investment cycle in Scotland, government had given Scottish Water freer reign than previously and a less modest price rise was planned for 2023/24. Rathgen said not increasing will have consequences for investment and what the company can deliver in the coming years.
Further significant increased investment is needed in the coming years to deal with ageing infrastructure and the impacts of the changing climate, the company has warned.
“The charges for 2023/24 have been set at a level which recognises the need for significant future investment to protect services, and the current economic challenges faced by many,” said Douglas Millican, chief executive of Scottish Water.
“Charge levels in the future are likely to rise to meet our strategic objectives, meet the needs of our customers and to transform services so they become as environmentally and financially-sustainable as possible.”
Charges vary based on a property’s council tax band, so range from £334.86 to £1,004.58 for combined services.
Around half of households in Scotland receive some form of financial support with their water charges via an automatic discount, exemption or reduction applied.
A 5% increase will also apply to providers of water to non-domestic customers.
English and Welsh water companies today announced average increases in water and sewerage bills of 7.5%, which remains below inflation.