SCOTS are set to see water bills soar above inflation for the next six years to pay for £1 billion of extra improvements to creaky Victorian infrastructure.

The Water Industry Commission for Scotland (WICS) has admitted that “bills have to go up” by two per cent above inflation each year up to 2027in order to improve water systems across Scotland and meet climate change targets,.

The news will come as another blow to cash-strapped Scots – with unemployment levels rising and 474,000 people in Scotland currently claiming Universal Credit amid the coronavirus crisis.

Scottish Labour has called for water bills to be frozen until at least 2023 as the public grapples with the financial crisis brought on by the pandemic and has labelled the plans by the regulator a “cash grab”.

WICS has recommended that Scottish Water “should seek to utilise its full cap” that will be made available.

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The regulator will publish its final recommendations in December but has warned that “if we do not invest sufficiently today there is a risk that we slide backwards” and has stressed that delaying the investment “would risk even higher bills, reduce service reliability and water quality” and prevent carbon neutral targets being achieved.

Scottish Water’s charges in the 2020/21 year, including supply and waste water collection services was limited to a 0.9 per cent increase from 2019/20 - an average annual charge of £372.

WICS has claimed the price hike will keep bills “broadly the same in real terms as they were in 2002”.

The proposed increase set out in WICS’s draft determination will let Scottish Water invest at extra £1 billion to improve infrastructure – taking the total to £4.5 billion.

WICS chief executive, Alan Sutherland, said: “We understand that many customers are facing financial difficulties and that the economy is under pressure, particularly in light of the Covid-19 pandemic. But this pandemic has underlined just how important a reliable and high-quality water system is.

“Our draft determination will futureproof these services for current and future generations. This also reflects the priorities of customers that were identified through wide-ranging research.”

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He added: “To delay increased investment would put water quality, reliability and the 2040 net zero target at significant risk, with the likelihood of even higher bills to fix those problems in future. That would be poor value for both current and future customers.

“WICS expects that Scottish Water will engage with and listen to its customers as it develops its proposals for charges each year.”

In its draft determination, WICS has warned that Scottish Water “will have to transform its business in a radical way if it is to meet the long-term challenges it faces”.

Scottish Water chief executive, Douglas Millican, said: “We’ve worked closely with the WICS over the last few years on the future of our sector and the essential services we provide our customers and communities and so we welcome the publication of the draft determination.

“We face significant challenges in the future, not least as a result of climate change and our ageing infrastructure, to maintain the level of service we provide to customers and communities.”

He added: “Further investment over the long-term will be needed to secure the service we currently provide and to allow us to transform into an organization that achieves net zero emissions.

“This is a very important milestone in our regulatory process and so we will study it carefully before responding fully.

“I encourage other stakeholders and interested parties to take this opportunity to respond to the consultation on the draft determination. Scotland’s water and waste water services belong to all of us and it is vital everyone gets the opportunity to input to our future.”

Labour has called for a rethink with thousands of Scots facing hardship due to the pandemic and council tax rising from a three per cent cap to almost five per cent by the Scottish Government. The majority of Scotland’s local authorities have hiked council tax by the full amount allowed.

The party’s deputy leader and finance spokesperson, Jackie Baillie, said: “The fact that the water industry commissioner found it acceptable to consider increasing water charges to significantly higher levels than inflation fails to reflect our current circumstances and the struggle that individuals and businesses will face.

“What we currently know about the economic effects of Covid-19 is only the very tip of the iceberg. It is vital that the Scottish Government commits to a complete freeze of water charges for at least the next two to three years until people and businesses across Scotland manage to get back on their feet.

“The Scottish Government should commit to a freeze for water charges as this would go a long way in relieving the public and businesses of any increased burden for their water at a time of great financial difficulty.”