Water Industry Commission for Scotland (WICS) has said that Scotland is avoiding a trend in inflation level rises in water charges, following water companies in England and Wales submission to Ofwat, the economic regulator for the water and sewerage industry in England and Wales, of their price plans for the five years from 2010.

The Commission says that water bills in Scotland are set to rise by less than inflation to 2010, and remain stable to 2014. The Commission said that household bills are already an average of £15 lower than in England and Wales and it is predicted that household bills will be £20 lower for next year, with prices are also likely to be lower beyond 2010.

The planned price rises in England include Thames Water expecting rises of about 3 per cent a year above inflation, while United Utilities plans to raise prices by 2.7 per cent above inflation.

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The chairman of WICS Sir Ian Byatt attributes the stable prices for household customers in Scotland to significant improvements from Scottish Water. He said: "Scottish Water has reduced its operating costs for five years in a row. At the same time it has improved its services to customers. These lower costs are bringing substantial savings for customers."

The Commission's statutory duty is to determine price limits for Scottish Water based on the lowest reasonable cost of achieving ministerial objectives for the water industry. In November 2005, the Commission determined price limits for water and sewerage services for the regulatory control period 2006-10.

During the 2006-10 regulatory control period, Scottish Water is tasked with delivering a £2.15bn investment programme. This investment is designed to deliver environmental, drinking water quality and customer service improvements specified by Scottish Ministers.

Following the submission of the business plans for water companies in England and Wales, Ofwat's chief executive Regina Finn said: "This is the start of the process of making decisions on how each company proposes to provide value for money, long-term, high quality water services to its customers.

"We will now examine draft business plans in detail, checking the proposed level of service and investment. We will make sure each plan includes everything we expect, takes account of concerns expressed by customers, and does so as efficiently as possible.

"Final decisions will not be made until autumn 2009. Between now and then we will be working intensively to provide the best possible basis for those decisions, including seeking customers' views and carrying out detailed and thorough analysis of these plans."

(GK/JM)