Water services: investing in and paying from 2027

Scottish Ministers set objectives for Scottish Water as to the standard of services it provides in its core functions. These are referred to as the Ministerial Objectives.

The Ministerial Objectives establish the standard of services Scottish Water must provide its customers and the type of investment activity it must undertake.

The Ministerial Objectives impact on what we all – as households or business customers – pay for the water and wastewater services provided by Scottish Water.

The services that Scottish Water provide are funded through customer charges and borrowing from the Scottish Government. Scottish Water’s independent economic regulator, the Water Industry Commission for Scotland (WICS), will determine the maximum amounts of customer charges for Scottish Water’s charges scheme for 2027-33. This maximum amount is based on the lowest overall reasonable cost for it to deliver the Ministerial Objectives.

A summary of the draft Ministerial Objectives for Scottish Water for 2027-33 is provided below.

• Standard of Services: Scottish Water must maintain or improve service levels compared to 2027, set performance targets with stakeholders, and ensure transparent public access to performance data.
   
• Investment Planning: Investment must align with national infrastructure and environmental hierarchies (e.g. the Scottish Government’s Common Investment Hierarchy, as set out in the Infrastructure Investment Plan, and the Environmental Impact Assessment Mitigation Hierarchy), support long-term asset value, service outcomes, and delivering value across generations.
   
• Asset Maintenance: Scottish Water must prioritise maintaining and enhancing existing assets over building new ones, continue to develop an evidence-based strategy for asset health, and ensure sustainable investment to maintain service levels amid climate change.
   
• Supporting Sustainable Economic Growth: Scottish Water must provide strategic capacity for housing and industry, optimise existing infrastructure before expansion, and support national planning while balancing domestic and non-domestic needs.
   
• Drinking Water Quality: Scottish Water must address risks to water quality through investment and operational improvements, conduct system-wide risk assessments, and support efforts to eliminate lead piping.
   
• Drinking Water Resilience and Demand Management: Scottish Water must improve supply resilience and, by 2028, report on options to close the 2050 supply-demand gap, including demand management and supply expansion, while promoting water-efficient behaviours.
   
• Cyber, Physical and Personnel Security: Scottish Water must enhance security across its systems and infrastructure against malicious threats, guided by government and industry best practices.
   
• Environment: Scottish Water must publish and deliver an Improving Urban Waters Routemap, maintain transparency on unsatisfactory discharges, and invest to improve bathing water quality in collaboration with SEPA.
   
• Wastewater Treatment and Network Performance: Scottish Water must address compliance risks with wastewater regulations through investment and operational changes, provide public access to overflow data, and promote responsible sewer use.
   
• Management of Rainwater and Flood Resilience: Scottish Water must collaborate to implement integrated urban catchment management, reduce sewer flooding and pollution, and create flood-resilient, nature-inclusive communities.
   
• Climate Change, Adaption and Mitigation: Scottish Water must assess climate risks to assets, adapt services to climate impacts, support biodiversity, and maintain progress toward net zero emissions in line with national adaptation plans.
   
• Circular Economy: Scottish Water must align with Scotland’s Circular Economy Route Map, exploring resource recovery and sustainable reuse.

The draft Ministerial Objectives for 2027-33 are proposed in order to begin addressing the challenges faced by the water industry, e.g. ageing assets, adapting to climate change, and population growth and movements. Addressing these means Scottish Water can continue to deliver high quality and sustainable water and wastewater services. However, there is a need to balance ambition with the impact on customer charges.

Further details on how the draft Ministerial Objectives for 2027-33 align with the Water Sector Vision and respond to the pressures in the wider water system can be found in the consultation paper.