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Water and Sanitation Services in Europe. Do Legal Frameworks provide for “Good Governance”? - Mónica García Quesada - IHP-HELP Centre for Water Law, Policy and Science,under the auspices of UNESCO, University of Dundee, Scotland, [June 2011]

Water and Sanitation Services in Europe. Do Legal Frameworks provide for “Good Governance”? - Mónica García Quesada - IHP-HELP Centre for Water Law, Policy and Science,under the auspices of UNESCO, University of Dundee, Scotland, [June 2011]

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1. INTRODUCTION

Scotland is a country rich in water resources. With a population over 5 million,

Scotland has approximately 100,000 km of rivers, 150 lochs and 12,000 km of

coastline for a population over 5 million. Water provision in Scotland covers

130,000 business customers and 2.2 million household customers, 70% situated

in the central belt that runs from northeast to southwest from Dundee to

Glasgow. Water consumption is currently at around 143 litres/person/day.

Scotland follows a model of Delegated-Public Management. Drinking water

and sewerage services are provided by one public company, Scottish Water,

which operates within the limits imposed by an independent economic

regulator, the Water Industry Commission for Scotland (WICS) and the

Scottish Government. The Drinking Water Quality Regulator for Scotland and

the Scottish Environmental Protection Agency (SEPA) have functions as water

quality and environmental standards setters. Consumers are organised in a

water consumers association, WaterWatch, which represents all Scottish water

users.

Water price and service standards setting in Scotland follows a ‚regulatory

agency approach‛, by which Scottish Water operates within the price limits

and according to the standards set by the national government and the

regulators – the WICS, SEPA and the Drinking Water Quality Regulator. The

mechanisms to set water price limits and service standards have rested, as this

chapter shows, on ensuring access to information and regulatory transparency.

Water and Sanitation Services in Europe: Do legal frameworks provide for Good Governance?

211

Water consumers have been allowed to participate via consultation procedure

in the regulatory process to decide on prices and standards. Access to justice

has relied on administrative procedures to review the regulators’ decisions,

and an attempt to minimise the number of cases reviewed in court.

Demographic data

Total population

5 million

Urban population (%)610

68%

Number of households

2.2 million

Natural resources data

Water availability per person per year

2,392 m3/person/year611

Average water use per person per day

143 litres/day612

Average water bill

£324/year613

Allocation of roles between public authorities

Responsible body for drinking and waste
water provision

Scottish Government

Other relevant authorities

Scottish Government for laws and regulations
Environment Agency for water resources
management

Management models for water utilities

Types of operators active in the country

Publicly owned water company: Scottish
Water

Infrastructure ownership

Public authorities

Forms of public-private partnership

N/A

2. INSTITUTIONAL FRAMEWORK

The core institutions for water and sewerage service provision in Scotland are

the Scottish Executive, Scottish Water and the Water Industry Commission for

610 Percentage of those living in large urban areas and ‚other urban areas, according to

Scottish Government, "Social Focus on Urban Rural Scotland 2003,"(2003),
http://www.scotland.gov.uk/Publications/2003/05/17207/22176
611 Data for the UK, Food and Agriculture Organization of the United Nations, "Aquastat."

612 Scottish Water, "Household Charges,"
http://www.scottishwater.co.uk/portal/page/portal/SWE_PGP_HOUSEHOLD/SWE_PGE_
HOUSEHOLD/SWE_HH_CHRG/Household%20Charges%2009-10.
613 Ibid.

Water and Sanitation Services in Europe: Do legal frameworks provide for Good Governance?

212

Scotland. There is a functional division of responsibilities between these

bodies, as each carries out a distinct task.

2.1. Scottish Government is the main responsible for setting the objectives

for the water industry. This includes a wide array of topics, such as pollution

control and water management, drinking water quality, reservoir safety,

marine and freshwater quality, sewage treatment and water conservation. The

Scottish government leads in the development of policy strategies for the

country, and is also in charge of transposing and applying EU legislation.614

2.2. Scottish Water is the water utility that provides water and sewerage

services. Created by the Water Industry (Scotland) Act 2002, Scottish Water is a

‚public corporation of a trading nature‛ 615 , owned by the government of

Scotland and answerable to the Scottish Parliament. The Water Industry

(Scotland) Act 2002 gave duties and powers to Scottish Water. It establishes

that the company relies entirely on customer bills for its income turnover, and

operates within price limits set by the economic regulator.616

2.3. Water Industry Commission for Scotland (WICS) is a non-

departmental public body with statutory responsibilities for the economic

regulation of the Scottish water industry.617 The Commission is made up by

614 See Scottish Executive Water Services Division, "Investing in Water Services 2006-2014,"
(Edinburgh: Scottish Executive, 2005).
615 Article 20 and Schedule 3 Water Industry (Scotland) Act 2002. See also Scottish Executive
Water Services Division, "Managing Change in the Water Industry: A Consultation Paper,"
(Edinburgh: Scottish Executive, 2000).
616 Article 29, Water Industry (Scotland) Act. See also David W Tagg, "Case Study of
Scottish Water," (Delft: UNESCO-IHE, 2003).
617 Part 1 and Schedule 1 of the Water Services Etc (Scotland) Act 2005.

Water and Sanitation Services in Europe: Do legal frameworks provide for Good Governance?

213

five members: a Chairman and four other non-executive members, including

WICS’s Chief executive. It was established in 2005, taking over the

responsibility for regulation of water and sewerage services from the former

Water Industry Commissioner for Scotland.618 As economic regulator, the

WICS has the task of setting prices that are consistent with Ministers'

principles of charges and water industry objectives. WICS’s mission is ‚to

manage an effective regulatory framework which encourages the Scottish

water industry to provide a high-quality service and value for money to

customers‛.619 It does so by monitoring and benchmarking the activity of

Scottish Water with that of water companies in England and Wales. Aspects

such as the companies’ capital investment schemes and expected operational

efficiency gains are analysed to ensure that, albeit in absence of market

competition, Scottish Water does not abuse its monopolistic position.620

Other two Scottish regulators have a say in the running of water service. The

Drinking Water Quality Regulator for Scotland has the mandate to protect

public health and ensure that supplied water complies with the drinking water

quality regulations. The Drinking water Quality Regulator has powers to

acquire information, conduct investigations and take enforcement action

should this prove necessary.621 Besides, the Regulator routinely audits Scottish

Water's laboratories and water treatment works. With these audits, the

618 Water Industry Act 1999.

619 Water Industry Commission for Scotland, "Water Industry Commission for Scotland,"
Water Industry Commission for Scotland.
620 Water Industry Commission for Scotland, "Information Note 7: Customer Service:
Overall Perfomance Assessment (Opa),"
http://www.watercommission.co.uk/UserFiles/Documents/Updated%20Public%20Informat
ion%20Note%20OPA.pdf.
621 Section 7 Water Industry (Scotland) Act 2002.

Water and Sanitation Services in Europe: Do legal frameworks provide for Good Governance?

214

Regulator ensures that Scottish Water is complying with the requirements for

water quality defined by law.622 For its part, the Scottish Environment

Protection Agency is Scotland’s environmental regulator and adviser,

responsible to the Scottish Parliament through Ministers.623 SEPA aims to

provide an efficient and integrated environmental protection system for

Scotland; a system that will both improve the environment and help deliver

the Scottish Government’s overall purpose.

Along with those institutions, water users also have a say in the running of the
water sector. WaterWatch is the national complaints handling authority for all

domestic and non-domestic water customers and consumer representative

body for the water industry in Scotland.624 In 2005, WaterWatch substituted

five Water Customer Consultation panels, created in 2002 under the Water

Industry (Scotland) Act 2002. However, and perhaps confusedly, the

legislation has not been modified to reflect the change of names from Water

Customer Consultation Panels to WaterWatch, so no legal document reflect

this change in the main Scottish water consumer association. Since then,

WaterWatch represents formally consumers’ interests. It is in charge of voicing

consumers’ preferences about water price and quality of service. WaterWatch

has a national remit. Its role is to investigate complaints made by water

customers, represent customers, influence policy and inform and to advise

customers in all matters related to water and sewerage provision. WaterWatch

is headed by the Convener, who is appointed by the Scottish Ministers,

622 In particular, the Water Supply (Water Quality)(Scotland) Regulations 2001

623 Created by chapter 2, Environment Act 1995.

624 Established by means of the Water Services Etc (Scotland) Act 2005.

Water and Sanitation Services in Europe: Do legal frameworks provide for Good Governance?

215

initially for a period of three years. The Convener is subsequently in charge of

appointing the members of WaterWatch also for a period of three years.625

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