13 September 2004
MINISTER ANNOUNCES REFORM OF NON-DOMESTIC WATER AND SEWERAGE CHARGING ARRANGEMENTS
Minister of State, John Spellar, MP, today announced changes to the current arrangements for charging non-domestic customers for the water and sewerage services they receive.
The Minister said: "Self-financing arrangements for water and sewerage services will require all customers, domestic and non-domestic, to contribute directly toward the cost of the services received. These new arrangements, will be phased in at the same time as the introduction of new household water and sewerage charges. Customers will pay one-third of the revised annual charges in the first year and two-thirds in the second year.
"We are working on the principle that the charges paid by the domestic and non-domestic sector, should reflect the burden that each sector places on water and sewerage services.
The agricultural sector and many larger businesses currently pay metered water charges. Approximately 500 customers also pay trade effluent charges to cover the cost of the treatment, and disposal of trade effluent. The Minister explained that under the new arrangements, all non-domestic customers will be required to pay water and sewerage charges, and where appropriate, trade effluent charges.
The Minister also explained that water metering would continue to be the preferred basis for charging the non-domestic sector and that Water Service would continue to extend the scope of metering throughout this customer group. While an unmeasured regime will be introduced for the many small businesses and voluntary groups which have low water usage, in the future, a larger number of non-domestic customers will move to metered charges or assessed charges.
For existing metered water customers, he said: "The first significant change will be the phasing out of the existing domestic allowance when domestic water and sewerage charges are introduced. Under current arrangements, most customers are entitled to 100 cubic metres of water per half-year without charge. In the future, all water consumed will be paid for."
The Minister continued: "Existing customers who have meters and who are also connected to the public sewer will incur a sewerage standing charge and a volumetric sewerage charge in addition to their existing metered water charges."
For unmetered customers he said: "Customers without meters will pay standing charges for water and sewerage services and a variable charge based on the rateable value of their business premises. The total charges payable by any customer without a meter will be capped at around £1,500 per annum."
In relation to other charges he said: "Non-domestic customers will be charged for the cost of emptying septic tanks, and for the treatment of trade effluent. Trade effluent charges will be calculated on the same basis as elsewhere in the UK and the regime extended to include all businesses with a discharge consent."
The Minister recognised the additional cost burden that the new arrangements will place on the farming and business sectors.
He said: "Charges for metered water customers will increase with the removal of the domestic allowance and the introduction of sewerage charges. This will result in estimated typical annual increases of £140 for a farm with average consumption; a typical annual increase of £590 for a small to medium sized retail shop; and an estimated typical annual increase of £3,000 for a large business consumer involved in general manufacturing.
"For customers without meters the majority of bills will be in the range £300 £350 per annum. Around half of trade effluent customers will see an increase in their charges of up to £300 per annum.
"I appreciate that additional costs are unwelcome. However these new arrangements are essential if Northern Ireland is to have the water and sewerage infrastructure necessary to support and promote a vibrant economy and a clean and sustainable environment. We must also ensure that costs are shared fairly between the non-domestic and domestic sectors, and adhere to the principle that the polluter pays."
An Integrated Impact Assessment of the Water Reform proposals, addressing matters such as equality and regulatory impacts, will be published for consultation in the Autumn.
NOTES TO EDITORS:
1. Significant investment must be undertaken in Northern Irelands water and sewerage services over the next 20 years. This investment will ensure compliance with European Directives on water quality, protect public health and the environment, respond to increasing demand for water and sewerage services, and upgrade ageing water and sewerage infrastructure.
2. To ensure that this investment can be delivered by an efficient, modern water industry for Northern Ireland, and investment in other key public services can continue to grow, Ministers have decided that water and sewerage services will become self-financing by 2008/09, and that the current arrangements for delivering these services will be reformed.
3. As with domestic water and sewerage charges, it is the objective to begin phasing in non-domestic charges in 2006/07, or no later than 2007/08.
4. In developing policy, Government must consider the wider impacts of its proposals. For example, there are statutory obligations to assess impacts in respect of equality of opportunity, and human rights. Other assessments are performed in respect of the impact in rural areas ("rural proofing") and on businesses ("regulatory impact assessment"). An Integrated Impact Assessment, which will summarise the findings of each of these reviews, will be made available for public consideration and comment in the Autumn.
5. The following Table shows illustrative average bills for metered customers in various non-domestic categories. The majority of customers will have bills of less that these amounts.
Non-Domestic Category
Meters
Average Water Bill
Average Sewerage Bill
Combined
Agriculture
46,800
305
-
305
Mining & Quarrying
100
990
1,000
1,990
Manufacturing Food
300
11,300
11,400
22,700
Manufacturing Textiles
100
4,580
4,640
9,210
Manufacturing Wood Products
200
890
900
1,785
Manufacturing Chemicals
100
4,620
4,680
9,300
Manufacturing Non-Metallics
300
2,080
2,110
4,180
Manufacturing Metals
200
1,280
1,300
2,570
Manufacturing Electronics
100
6,210
6,290
12,500
Manufacturing Other
1,000
3,040
3,080
6,110
Construction
300
475
480
950
Wholesale & Retail Trade
3,200
760
770
1,525
Hotels, Bars & Restaurants
2,700
900
910
1,810
Transport
300
1,910
1,940
3,850
Business Activities
800
685
695
1,375
Miscellaneous Public Sector
1,900
2,010
2,040
4,050
Government Department Core
300
1,330
1,350
2,675
Educational Institutions
1,700
1,220
1,240
2,460
Hospitals
100
12,200
12,400
24,600
Miscellaneous Services / Community
3,000
595
605
1,195
6. The following table shows illustrative average bills for unmeasured non-domestic customers in various non-domestic sectors. The highest charge for water will be around £750 and the highest charge for sewerage the same. The highest combined charge will be £1,500.
Non-Domestic Sector
Number of Customers
Average Water Bill
Average Sewerage Bill
Combined
Commercial
32,500
185
180
360
Industrial
2,500
280
270
550
Public Service
3,500
265
255
520
Educational
500
330
320
650
Recreational
500
265
260
520
Religious
500
220
215
435
Voluntary
2,000
115
110
225
7. There are currently around 64,000 chargeable water meters installed in non-domestic properties in Northern Ireland. These properties attract metered water charges. Properties without meters do not attract a water charge. For metered customers, a domestic allowance of 100 m3 per half-year is given where rates are payable on the metered property. Around 45,000 meters attract a domestic allowance. Where their consumption is less than the domestic allowance no water bill is issued.
8. All industrial, trade or commercial operations discharging trade effluent from de-rated, rate-exempt or rate-rebated premises to the public sewer are liable to pay trade effluent charges. Currently, around 500 customers pay these charges.
9. The new charging arrangements will increase the contribution from the non-domestic sector towards the cost of water and sewerage services by £50-70 million per annum.
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