Edward Mountain MSP
Convener
Net Zero, Energy and Transport Committee
The Scottish Parliament
Edinburgh
EH99 1SP
12th January 2026
Dear Convener,
Consumer Scotland report on the affordability of household water charges
The Committee may be aware that the Scottish Government recently launched its consultation on investing in and paying for Scotland’s water services in the 2027-2033 regulatory period.
Amongst other areas, this consultation sets out the Scottish Government’s intentions around the Principles of Charging and support for low-income
consumers with water bills.
Consumer Scotland is the statutory consumer body for the water sector. We have carried out detailed analysis of the affordability of water and sewerage charges, and the associated support schemes designed to protect those on a low income.
I enclose our report, published ahead of the Scottish Parliament’s Christmas recess, entitled ‘Affordability of water and sewerage charges: 2025’, which examines trends in key measures of water poverty and severe water poverty in Scotland, and projects future trends in water poverty under various scenarios for water charging policy.
The key findings from our analysis are:
- That the bill increases set out in Scottish Water’s draft Business Plan of CPI+4% annually (26.5% over the six years) would drive a rapid increase in rates of water poverty, from around 10% currently to up to 16% by the end of the six-year charging period – levels not seen for two decades
- Only around a quarter (25%) of households experiencing water poverty are in receipt of the Water Charges Reduction Scheme (WRCS), though most of those who do receive it are on lower incomes
To address those findings Consumer Scotland recommends:
- That the Scottish Government increase the discount available through the Water Charges Reduction Scheme from 35% to 50% during SR27. The policy would offset the impact of real terms bill increases for over 400,000 households, the vast majority of whom are in the lower part of the income distribution
- That the Scottish Government considers establishing a water hardship fund that households who are ineligible for WCRS can apply to for help with their bills. This reflects the finding that some households who are in water poverty are not eligible for the WCRS
- A new scheme of affordability support, that more effectively targets water poverty, should be introduced by the start of the 2033 regulatory period
The costs of increasing the WCRS discount would need to be funded either through efficiencies in Scottish Water’s proposed business plan, increased borrowing being made available to Scottish Water, or from increases to water bills more generally. If it were the latter option, our analysis suggests this would add an additional 2% to bills across the six-year regulatory period (0.33% per year), in addition to the 26.5% cumulative increase proposed in Scottish Water’s draft business plan during 2027-2033.
We will engage further with stakeholders on these issues as we prepare our response to the Scottish Government’s consultation on investing in and paying for Scotland’s water services.
The Consumer Scotland team would welcome the opportunity to provide further detail to the committee on this issue if that would be helpful.
Yours sincerely,
Sam Ghibaldan