Charging for water in Scotland: options for change

Faced with the tasks of raising additional revenue to finance large capital projects, harmonising regional charges and having their proposed schemes approved by the new customer watchdog the Scottish Water and Sewerage Customers' Council the authorities will be taking decisions, the effects of which will be felt by their customers well into the next millennium. With this challenge comes a unique opportunity to reassess one fundamental policy question from an economic point of view: how should Scottish consumers pay for their water services? In this paper we endeavour to answer this question by outlining and analysing three alternative charging schemes available to the new Public Water Authorities.