Investing in Water Services 2006-2014
ANALYSIS OF RESPONSES TO THE SCOTTISH EXECUTIVE CONSULTATION
Scotland's Water Services February 2005
Environmental Resources Management Ltd
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The Scottish Executive Water Services Division commissioned Environmental Resources Management (ERM) to collate and analyse all the responses received to the public consultation document ' Investing in Water Services 2006-2014'. The consultation sought views on the scale and content of future investment in the water services industry. The aim of the consultation exercise was to inform decisions that Ministers will take to set the policy objectives for the industry for the investment period 2006 to 2014. The consultation paper sought views on nineteen consultation points, the details of which are given in the 'summary of findings' section.
Main Findings
The consultation proposed four guiding principles to guide the formulation of the investment. The response to the consultation revealed a strong support for these principles which were: cost-effectiveness, deliverability, affordability and sustainability.
A clear majority of respondents saw investing in Scottish Water's existing capital assets to maintain current customer standards as an essential objective for the next programme.
The largest level of response was received in relation to questions on the environment and many respondents expressed support for investment to be made in odour control, addressing low water pressure and, particularly, sewer flooding.
There was a strong desire to see additional funding to address the infrastructure requirements of new development. However, respondents are, on the whole, unwilling to meet the cost of addressing development constraints through increased charges or lower investment in other areas.
While respondents expressed strong views on investment priorities, there was a reluctance to embrace the question as to whether investment should be funded through higher charges or through lower investment in other areas.
Aggregate analysis of the responses expressing views on how to fund increased investment points toward a slight preference for higher charges rather than lower investment in other areas. However, a high number of respondents favoured the funding of some or part of the investment programme through general taxation, particularly where there was considered to be a history of under-investment by previous custodians of the industry.
Background
The provision of good quality drinking water to homes and workplaces and the proper treatment and management of wastewater is a vital service provided by Scottish Water. Scottish Water is tackling a legacy of past under-investment in the water industry and is delivering one of the largest investment programmes in the UK. They are investing more per head of population than water companies in England and Wales.
The current water industry investment programme (Quality and Standards II) will end in March 2006 and will be replaced with a new investment programme (Quality and Standards 3) which will run from 2006 to 2014.
Quality and Standards 3 will set objectives for Scottish Water to deliver an efficient core water and sewerage service across the country by improving environment protection and public health in line with the legislative framework, supporting housing and economic growth in communities through the removal of major development constraints across the country, and providing these core services onthe basis of charges that are stable and sustainable.
The Consultation Paper
The 'Investing in Water Services 2006-2014' consultation paper provided information on the scale of forthcoming investment requirements over that period, covering a broad spectrum of issues for the water industry including:
maintaining service standards;
extending networks for new developments and first time connections;
environmental objectives;
drinking water quality and water resources objectives;
odour control;
water pressure; and
sewer flooding.
The consultation paper sought views on what the priorities for the water industry should be, how individual investment options should be assessed, and how each element should be paid for in order to produce an investment programme that is cost effective, deliverable, affordable and sustainable.
In parallel to the ' Investing in Water Services' consultation the Scottish Executive undertook a second consultation entitled ' Paying for Water Services 2006-2010.' The SE also commissioned MORI to undertake research specifically targeted to assess Scottish Water customer views on investment priorities. Separate reports on the findings of that consultation and the customer research have been produced.
Aims
The aims of the independent analysis of the responses to the ' Investing in Water Services' consultation were to report on the full range of views expressed by respondents; identifying trends and highlighting majority and significant minority views in such a way as to inform Ministers and officials in the development of policy decisions.
Methods
Over 6,000 ' Investing in Water Services' consultation papers were issued to a range of individuals, local authorities, private and public organisations, and community groups. In all, 252 responses to the consultation were received. Each response was logged and then entered into a custom designed Microsoft Access database to allow suitable quantitative analyses of the responses. The responses received on each consultation point were then assessed on a quantitative and qualitative basis.
Level of Response
Respondents to the consultation were self-selecting and the 252 responses received by the Scottish Executive within the timescale provided represented a return rate of approximately 4%. This is a higher response than received for the consultation on the current investment programme, Quality & Standards II.
The largest numbers of responses were received from Individuals (24%). The second largest number of responses came from Community Councils (20%) closely followed by Local Authorities (16%) and Businesses and Trade Bodies (11%).
Summary of Findings
Introduction
The great majority of the 252 respondents did not comment on all consultation points but were selective, expressing views only on those points in which they had specific interest.
The largest number of responses to any one consultation point was 117. The highest rates of return were received for consultation points; 10 (environment), 1 (key aim),
8 (new connection), 3 (serviceability levels), 7 (modelling work) and 18 (sewer flooding).
Comparatively fewer responses were received in response to the consultation points concerned with how provision should be made for funding individual investment priorities, with the options in each case being a) higher charges or b) lower investment in other areas.
Establish Future Investment Needs
Consultation point 1
The key aim of Quality and Standards III is to produce
a cost-effective, deliverable, affordable and sustainable investment programme. Do you think these are the
right criteria?
Of the 106 respondents, a clear majority (60%) agreed that these are the right criteria to be used, with only 6% disagreeing and 34% providing alternative views.
Consultation point 2
Do you agree that these are the correct questions each working group should use to assess each individual investment option?
Is it legitimate for customers alone to pay for the investment under consideration?
Is the proposed investment option the most cost effective available?
Are the planning assumptions which lie behind the requirement reasonable?
Is there any flexibility built into the requirement (either to meet a lower standard of compliance or invest over a longer period), and, if not, should there be?
What level of priority should be attached to the individual investment requirements?
Of the respondents to this consultation point, just over half (55%) agreed that these are the correct questions that should be asked. Only 8% disagreed and 37% provided 'other' responses.
Consultation points 3, 4 and 5
3. Do you agree that maintaining serviceability levels should be an essential objective of Quality and Standards III?
4. What are the most important serviceability standards?
5. If you wish to see a higher level of serviceability, do you wish to see this benefit secured from a) higher charges or b) lower spend on other areas of capital investment?
A clear majority (78%) agreed that maintaining serviceability levels should be an essential objective of Quality and Standards III.
In response to the open question of what the most important serviceability standards are, respondents mentioned a wide range of investment issues. There was no single dominant view emerging from these responses.
There was a preference for funding this element through higher charges (31% supported this) as opposed to lower investment in other areas (9% supported this); however, both options were unpopular with respondents. Many proposed that general taxation be used to fund investment.
Additional Capacity Issues
Consultation points 6, 7, 8 and 9
6. We hope to be able to include provision within the forthcoming investment programme to fund the deeper elements of connection. Should this element be paid for by a) higher charges or b) lower investment in other areas?
7. Where there is a requirement made by local authorities for detailed modelling work to inform the viability of strategic sites in structure and local plan processes, who do you think should fund this work?
8. Do you think that the forthcoming investment programme should include provision for new connection where the costs to customers exceed those that are currently considered 'reasonable'?
9. If so, should the inclusion of such an element be paid for by a) higher charges or b) lower investment in other areas?
Respondents felt very strongly that investment should be made in the deeper elements of connection in order to release development constraints but less than a quarter of respondents supported options of funding this element through either higher charges or lower investment in other areas (19% and 21% respectively). Most wished to see general taxation used to address historical under-investment.
In response to the open question of who should fund any modelling work, the vast majority of respondents suggested that this should be paid for by local authorities.
Almost half of respondents (45%) felt that the forth-coming investment programme should include provision for new connection where the costs to customers exceed those that are currently considered 'reasonable'.
The Environment
Consultation points 10 and 11
10. What should the top environmental priorities be?
11. Should the inclusion of these priorities be paid for by a) higher charges or b) lower investment in other areas?
The largest number of responses was received in response to questions about the environment. In response to the open question of what the top environmental priorities should be, no overriding messages emerged in terms of what the environmental priorities should be; on this, respondents' views were too divergent to be generalised.
As with the responses to the other funding consultation points, the options to fund environmental priorities through higher charges or lower investment in other areas were broadly unpopular, only attracting 27% and 15% support respectively.
Drinking Water
Consultation points 12 and 13
12. What should the top drinking water quality and water resource priorities be?
13. Should the inclusion of these priorities be paid for by a) higher charges or b) lower investment in other areas?
On the open question of what the top drinking water quality and water resource priorities should be, most priorities expressed were of general nature and no clear themes emerged.
As with the responses to the other funding consultation points, the options to fund water quality and water resource priorities through higher charges (32%) or lower investment in other areas (12%) were broadly unpopular.
Other Customer Issues
Consultation points 14 to 19
14. Do you think that the forthcoming investment programme should include provision for odour control at wastewater treatment works?
15. If so, should the inclusion of such an element be paid for by a) higher charges or b) lower investment in other areas?
16. Do you think that the forthcoming investment programme should include provision to improve water pressure for those properties suffering from low water pressure?
17. If so, should the inclusion of such an element be paid for by a) higher charges or b) lower investment in other areas?
18. Do you think that the forthcoming investment programme should include provision to address sewer flooding in addition to that contained under capital maintenance?
19. If so, should the inclusion of such an element be paid for by a) higher charges or b) lower investment in other areas?
Of the additional priorities discussed in the consultation document, the most support was given to addressing sewer flooding. Of the 89 respondents to this point, 65 agreed, two disagreed and 22 provided an alternative view. Funding for odour control was considered the lowest priority (55%), although still supported by just over half of the respondents to this consultation point. Addressing problems with water pressure lay in the middle with 73% of respondents supporting this.
Respondents were generally reluctant to embrace the question as to whether investment in these priorities should be funded through higher charges or through lower investment in other areas.
Observations on the Consultation Process
Within the general comments on the consultation exercise there was a mixed response. Some respondents expressed approval of the process and appreciated the opportunity to comment while others expressed concern that the consultation was a costly exercise and questioned whether the responses would be considered appropriately.
A number of respondents considered that the consultation paper was too 'high level' and the appropriate level of detail was not provided in order for considered judgements to be made, particularly in relation to comparing funding priorities.
If you would like further copies of this summary please contact:
Scottish Executive Water Services Division
Area 1-H (north)
Victoria Quay
Edinburgh
EH6 6QQ
Email: waterservices@scotland.gsi.gov.uk
Telephone: 0131 244 5099
Further information is also available on the Scottish Executive website at: www.scotland.gov.uk/Topics/Environment/Water
The views expressed in this summary are those of the researchers and do not necessarily represent those of the Department or Scottish Ministers
©Crown copyright 2005
Limited extracts from the text may be produced provided the source is acknowledged.