Gillian Martin MSP
Cabinet Secretary for Climate Action and Energy
Scottish Government
St Andrew's House
Regent Road
Edinburgh
EH1 3DG
19th December 2025
Dear Gillian,
Consumer Scotland report on the affordability of household water charges
I trust you are well.
I enclose a report Consumer Scotland has published today titled ‘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.
Consumer Scotland has been engaging on this analysis with Scottish Government water policy officials and other sector stakeholders as it has been finalised over recent months. We hope that our analysis can inform the Principles of Charging for the SR27 period as these are finalised in early 2026.
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
Scottish Water’s draft Business Plan for 2027-2028 to 2032-2033 sets out the need for increased investment in this period to address challenges including climate change, demographic shifts, evolving regulatory requirements and replacement of ageing assets.
The required investment need is anticipated to largely be met through increased customer charges.
The costs of increasing the WCRS discount would need to be funded either through increased borrowing being made available to Scottish Water, or by increases to water bills more generally. If it were the latter option, our analysis suggests this would add an additional 2% to bills, on top of the 26% cumulative increase.
I would welcome the opportunity to meet with you to discuss report in more detail.
Sam Ghibaldan