Part 1 - General Introduction
The engagement undertaken in summer 2012 on "Investing in and Paying for Your Water Services from 2015" confirmed that the Scottish Government would consult further on the introduction of water and sewerage charges for vacant non-household properties thereby ending the current exemption. The Government noted that:
- Charging for empty properties across the household and non-household sectors is inconsistent; and
- It intended to explore with stakeholders how charging policy for vacant non-household properties should be modified so that charges are consistent with the cost recovery and cost reflective principles.
Charges for non-household properties include three elements: water, sewerage and drainage. Water and sewerage charges consist of standing and metered charges whilst drainage charges are calculated by reference to a property's Rateable Value.
At present, owners of vacant non-household properties are not charged for water, sewerage and drainage services. Such arrangements were broadly comparable with those discounts offered previously for business rates – however, these discounts have been curtailed as of 1 April 2013.
Such arrangements are inconsistent with other utilities where charges must be paid unless services are disconnected.
Impact of Current Arrangements
Whilst vacant properties may not be in active use to produce goods and services, owners of properties rely on the continued availability of services provided by Scottish Water. There is a reliance, in particular, on drainage services to ensure that rainwater from roofs and car parks continues to be drained so that properties are not flooded. Subsequent occupation of these premises is also dependent on the premises being fully serviced - that is - with access to services such as water and sewerage.
The amount of wholesale revenue forgone by exempting vacant non-household properties is estimated at some £15 million. This is currently funded through a cross-subsidy from other non-household customers. This is equivalent to an uplift of some 5% in all non-household charges. These figures are based on the Scottish Assessors Valuation Roll on 1 April 2013.