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1.When will water charges be introduced?

On 26 March 2007 the Secretary of State agreed that the new annual water charges will be deferred until the formation of a Northern Ireland Executive on 8 May 2007. The Secretary of State added that upon devolution water will become a matter for the NI Executive and it would be up to the Executive to resolve the water charges issue and deal with funding.

2.How much will the new charge be?

There will be two household charges - a water charge and a sewerage charge.
Both charges will be made up of a standing charge of around £50 - £55 and a variable element based on property value.
The lowest household charge will be around £150 per year, with the maximum charge around £770 per year.
Charges will be phased in, with consumers paying one third in the first year, two thirds in the second year and the full amount in the third year.
For further information on the estimated household charges please go to the Illustrative Charges page.

3.Why base charges on property value?

A wide range of charging options was considered including charging on the basis of household income, property size and property value.
The proposed charging regime is based on capital values and seeks to provide a balance between customers' ability to pay and their use of water and sewerage services.
In very general terms, a capital value based charging regime directs higher charges to more affluent areas.

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4.What about low-income households?

A Reduced Tariff Scheme will be introduced to ensure that eligible low-income households will not spend more than 3% of their income on water and sewerage charge.
Under the new proposals as many as 200,000 households in Northern Ireland who presently qualify for Rate Rebate, Housing Benefit or the new Low Income Rate Relief Scheme will benefit.
The scheme will also extend to all 16/17 - year-old householders and to children leaving care up to the age of 21.
Those in full-time education and training who are entitled to full Rate Relief will also be eligible for the Reduced Tariff Scheme.
The Reduced Tariff will mean that eligible low income households will not pay more than £180 regardless of the value of the property in which they live.
Extra help will be given to people who may be living in lower value houses or flats. For those living in these households we will introduce two further tariffs.
Houses valued up to £70k will pay £90:while;
Houses valued between £70k and £100k will pay £135.
For people in these households that means maximum bills will be £90 and £135 respectively.and as charges will be phased in, in the first year people will only pay £30, £45 or £60, depending on the value of the property.
The cost of the scheme will be met from NI public expenditure - not other customers and will be reviewed after three years.
All those who are entitled to Housing Benefit, Rate Rebate or the new Low Income Rate Relief Scheme will automatically be entitled to the Reduced Tariff.
Householders in receipt of Income Support and Pension Credit who would be entitled to these passport benefits (but do not claim them) will be assisted in securing access to low income protection by virtue of their eligibility for Housing Benefit or Rate Rebate.

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5.What plans are there to introduce domestic metering?

The Government's long term goal is the introduction of widespread domestic metering as a means of meeting environmental and sustainability obligations, but in a way that does not penalise those on low incomes.
From April 2007, Pensioners will be able to choose to have a meter. (see reply to question1)
Meters will also be installed in all new properties and first time connections..
This phased approach will be subject to a review after two years when the extension of the metering option to further groups will be considered.
The introduction of compulsory metering in all new homes and the provision of choice to pensioners will contribute to the widespread use of metering.

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6.What about houses not connected to the water supply/sewerage network?

The underlying principle is that people will pay for the services they receive.
There will be two charges - a water charge and a sewerage charge.
If a property is connected to the mains water supply it will have to pay for that service. The same principle will apply in respect of connection to the sewerage network.
There will be a charge for the emptying of septic tanks and the appropriate treatment of waste.

7.Who decides what the charges will be?

The initial charges will be approved by the Department for Regional Development. In the longer term, water and sewerage pricing policies will be approved by the economic regulator.

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8.How will the Reduced Tariff Scheme be paid for?

The government will pay for the scheme from the public expenditure rather than from the bills of other customers

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9.How will Capital valuations be assessed?

Data held by Valuation and Lands Agency (VLA) such as location, house type,size.age and accomodation will be taken into account, together with sales details of similar properties in the neighbourhood.
Work on producing an assessment of the capital value of each residential property in Northern Ireland has now been completed.This assessment assumes an average standard of internal fit out and disregards any value attributable to development potential.
All properties were assessed to a common valuation date of January 2005 to ensure fairness and consistency.
The assessments of capital values have been distributed to all households in Northern Ireland.

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10.Will the assessed capital value of a property be the same as the open market value?

The assessed capital value of a property will not necessarily be the same as the open market value.
This is because the former will be based on an average standard of internal fit out. It would simply not be possible to take account of the internal fit out of every single property.
In addition, the assessment will not take account of any value attributable to development potential, which would be taken into account in determining what the property would sell for on the open market.

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11.Will second home owners have to pay water charges for their second property?

Yes. The same system for water charging will apply to second homes. There are no plans to exempt second homes from charges or reduce the charges in any way on a second home.

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12.What can I do if I am unhappy with the property value being used to determine my water and sewerage charge?

The Valuation and Lands Agency Freephone helpline can be contacted on 0800 197 0611, Minicom 0800 197 0612.

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13.What impact will the proposed changes have on the non-domestic sector?

The domestic allowance will be phased out as part of the new arrangements. 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. Charges for the non-domestic sector will continue to be consistent with the principle that the polluter pays.
Costs will be distributed fairly between the domestic and non-domestic sector, reflecting the burden that each sector places on water and sewerage services.
Water metering will continue to be the preferred basis for charging non-domestic customers for their water supplies.
Unmetered customers will pay standing charges for water and sewerage services, and a variable charge based on the NAV (Net Annual Valuation) of the business premises.
All non-domestic customers will also be required to pay sewerage, and where appropriate, trade effluent charges. Customers will also be charged for the emptying of septic tanks.
The new arrangements will be phased in from April 2007 on a one-third, two-thirds basis.(see reply to Question 1)

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14.Changes to measured / metered charges.

Water Charges

Measured charges are currently paid by occupiers of properties where a water meter has been installed. Charges are made up of a standing charge and a volumetric charge based on the volume of water consumed. Changes in water charges for metered customers will generally be small. The main impact will be in the introduction of a sewerage charge for these customers.
22,000 metered customers who currently do not receive a metered water bill because of the domestic allowance will lose one third of their domestic allowance. Those who consume in excess of this lower allowance will be billed for a standing charge (currently around £50) and a volumetric charge (of up to £60). An avergae water (only) bill for thios group of customers will be around £110 but some properties which attract multiple domestic allowances could experience considerably higher increases. The following year this group will lose a further one third of the domestic allowance.
The water bills for most other metered customers will rise by up to £60 per annum as a result of the phased removal of the domestic allowance (this will increase each year until the allowance is fully removed in 2009/10).

The water bills for most other metered customers could rise by up to £60 per annum as a result of the phased removal of the domestic allowance (this will increase each year until the allowance is fully removed in 2009/10).
De-rated, rate-exempt and large volume users will experience no change in their water bills.

Sewerage Charges

All non-domestic customers will be required to pay sewerage and,where appropriate, trade effluent charges. Customers will also be charged for the emptying of septic tanks.
All metered customers connected to the public sewer will receive a new sewerage bill which could be around 25% higher than their new water bill (except in the case of trade effluent customers);
Trade effluent customers would attract a lower sewerage charge in respect of normal sewerage (the non-process part of their discharge);
Farms would generally not receive a sewerage bill as only a small proportion of farm effluent is discharged into the public sewer – most farms are not connected to the public sewer.
The 22,000 metered customers who currently receive no water bill because of the existing domestic allowance would also incur a new sewerage bill. Combined charges for these customers will be one third of the full amount (up to around £200 in 2007/08) - the average annual water and sewerage bill for this group is likely to be around £200 for properties in receipt of a single domestic allowance.(see reply to Question 1)

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15.What will typical charges be for Metered Customers?

Estimates suggest that a farm with average consumption will be charged an additional £40 per annum in 2007/08 (rising to £120 in 2009/10)
The estimated typical annual increase for a small to medium sized retail shop with consumption of 300 cubic metres per annum) will be £200 per annum in 2007/08 (rising to £500 in 2009/10).
The estimated typical annual increase in charges for a large business consumer involved in general manufacturing will be £1600 in 2007/08 (rising to £4,000 in 2009/10).
Most unmetered customers, such as small business premises, voluntary bodies, and community halls, will receive annual bills of around £75 to £125 in 2007/08 (rising to £275 - £490 in 2009/10).

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16.What about Trade Effluent Charges?

Trade effluent charges will be extended to all businesses which discharge trade effluent. The calculation of these charges will continue to be on the basis of the Mogden formula and will be brought fully in line with practice in GB.
This will result in increasing trade effluent charges over several years with an increase of around 17% in 2007/08. This should be seen against very small increases in charges over the past number of years.
Around half of trade effluent customers will receive increases in charges in the region of £100 per annum in 2007/08 rising to £400 per year by 2009/10. A smaller number of customers will have more substantial increases.

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17.What will the increase in charges be for unmeasured non-domestic customers

Water Service will continue to extend metering more widely throughout the non-domestic sector so there are many higher usage customers, currently unmeasured, who will receive a metered bill over the next number of years. Where meters are difficult to install for these customers an assessed charge will be applied.
For the remaining unmeasured customers charges will be made up of a standing charge of £50 - £55 plus a variable charge based on the NAV of the premises. Charges will be capped at a maximum combined charge of £513 in 2007/08 (full charge cap £1,540) Typical bills are likely to be as follows
The lowest combined bills will be up to £50 in 2007/08 for properties with NAVs up to around £1,000 – for example, small first and second floor offices, small ‘corner’ shops and small stores or workshops.
Typical High Street shops in the provincial towns (e.g. newsagents, chemists, estate agent, jewellers, boutiques) which have a typical NAV of 5,000 – 6,000 could expect a combined water and sewerage bill of around £115 in 2007/08.
Community / Orange / Hibernian Halls with a typical NAV of around £3,000 – 4,000 could expect a combined water and sewerage bill of around £90 in 2007/08.
The capped charge of £513 per annum (£257 each for water and sewerage) would be applied to the unmeasured customers with NAVs above £40,000 although many of these properties will be metered over the coming year.

18.What will the impact on farmers be and what protections will be given to those on low incomes?

The main impact on the agricultural sector will arise as a result of the removal of the domestic allowance. The cost of this will be in the region of £180 per annum, although it could be higher where more than one domestic allowance is allowed.
Where no domestic allowance is allowed on a supply, these changes will have no impact on water charges.
As the vast majority of farms are not connected to the public sewer, the introduction of sewerage charges will, by and large, have no impact on farms. However, a charge will be levied in respect of all septic tank emptying.
Where a farm is connected to the public sewer, the sewerage charge will be calculated on an assessment of the volume of water returned to sewer – this is generally considerably less than the volume of water consumed on the property.
Farmers on low incomes will be eligible for the Reduced Tariff but only in respect of domestic chrages on a domestic farm property.

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19.Why do we need Water Reform?

Some £3 billion of capital investment is needed for our water and sewerage services in the 20 years to 2023.
The Water Reform Programme will promote public health, protect the environment and improve economic performance.
It will also lead to further improvements in the quality of the water we drink and lead to cleaner rivers, beaches and waterways.
It will also provide the conditions for economic growth -10,000 new homes are built every year, and will lead to new tourist potential.
The Water Reform Programme will also be good for public services by allowing resources no longer needed for water and sewerage services to be allocated to other public services - up to £300 million per year from the end of the decade.

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20.Surely we pay enough for water and sewerage services through the Regional Rate?

Water Service is currently paid for out of general taxation and the Regional Rate. However, Northern Ireland has the highest rate of public spending and the lowest levels of local revenue - see table below for illustration of local revenue levels. We cannot expect to improve our public services in Northern Ireland unless we close the gap between what people pay here and in other regions of the UK.

Average level of household taxation in U.K 2006 – 07

Region	Average Property Charge per Household	Average direct water charge	Total Household charge
	£	£	£
England & Wales	1043	294	1337
Scotland	958	295	1253
Northern Ireland	668	-	668

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21.Could a returning Executive cancel the water charges?

The Secretary of state announced that the new annual water bills will be deferred until the formation of a Northern Ireland Executive on 8 May 2007. Upon devolution water will become a matter for the NI Executive and it will be a matter for the Executive to resolve the water charges issue and deal with funding.

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22.Will regional rates be reduced when water charges are introduced?

The Regional Rate doesn't contain a specific element for water and sewerage charges,and therefore water charges will be in addition to it. The Regional Rate will be determined by the amount needed to secure the level of borrowing considered necessary under the Reinstatement and Reform Initiative

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23 Why can we not simply pay more through our Rates?

Under Treasury rules, if water and sewerage services continue to be financed through taxes (such as the regional rate) we would have to cover certain costs (capital charges and depreciation) from our own resources (the budgets made available to out Departments). This would mean less money for other public services.
If we introduce a self-financing regime and finance our water and sewerage services through direct charges, these costs (which could amount to several hundred £million over 25 years) will be borne by the Exchequer. This is how these services are financed in all other parts of the UK, whether in the private sector (as in England and Wales), or the public sector (as in Scotland).
This extremely valuable concession was won from the Treasury

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24.Will Northern Ireland get a “Green Dowry?"

Under privatisation, the English water companies received what was known as a "Green Dowry". This comprised the write-off of around £5.2 billion of debt together with net cash injections and capital allowances amounting to some £1.5 billion. This was offset in large part by the proceeds of the privatisation, some £6 Billion, which provided a benefit to all UK taxpayers.
For the five year period up to 2007/08, some £1.1 billion of capital investment has been made available to upgrade the water and sewerage infrastructure.
Those calling for the under-investment in Northern Ireland's water and sewerage infrastructure to be funde3d by the Exchequer should recognise that :

throughout the 1990's, and up to the present date, Northern Ireland's share of public expenditure has been higher per person than in England, Scotland and Wales:
Over the past 15-20 tears since privatisation, the English water companies have invested over £50 billion in improving their water and sewerage services. This has been financed by shareholder equity and borrowing, all paid for fully by direct water charges paid by consumers and not from council taxes or general taxation; and
during the same period, Northern ireland has continued to finance water and sewerage services from public expenditure, thereby depriving other public services of much needed resources.

Northern Ireland has had much higher public expenditure per person than any other part of the UK. Nor is that a result of high security costs - public spending on economic, social and environmental programmes is and has been much higher.

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