In a letter sent to members of the parliament's transport and environment committee in advance of their consideration today of the Water Industry Bill, deputy environment and rural development minister Allan Wilson said:
'The sort of bodies that it will assist will include those relying on local financial support and occupying premises such as local halls: in short those least well placed to cope with the withdrawal of reliefs.
'The proposed scheme, with its£10,000 threshold, will help small local bodies most affected by withdrawal of relief from water charges. For example the McFadden Commission suggested that over a third of Scottish charities have incomes of less than£5,000 and over half have income below£25,000.
Mr Wilson went on to say:
'Crucially, unlike other proposals put forward in this area, the scheme will catch those bodies that have no formal charitable status - thereby ensuring that the smallest groups, such as parent and toddler groups, or local scout or guide groups do not risk being excluded.
'The executive believes that this approach, with its guaranteed exemption for up to four years, is the most effective and straightforward means of dealing with the impact of relief withdrawal on the sort of bodies that the committee itself identified.'
The proposed scheme's basic criteria are a requirement on the part of applicants to demonstrate that they are claiming in respect of premises eligible for relief under current water authority arrangements and have an annual income of less than£10,000 in respect of the premises. Bodies that are eligible in the coming financial year will be totally exempted from all water and sewerage charges during the period 1 April 2002 to 31 March 2006.
Mr Wilson's letter to members of the T&E committee was issued yesterday in advance of the committee's Stage 2 consideration of the Water Industry Bill today. Due to extensive consideration of earlier parts of the Bill, the committee did not discuss on charges relief for charities. This is now likely to take place next week (23 January).
The proposal of exempting small, locally based bodies from water and sewerage charges will be implemented by Scottish Water, which, subject to approval of the Water Industry Bill by the Scottish parliament, is due to assume responsibility for the provision of all public water and sewerage services in April.
Better funded bodies, including the larger charities, will continue to have their relief phased out. In many cases, these larger bodies receive substantial financial assistance, either directly or indirectly from the executive. This support for the voluntary sector has increased dramatically in recent years.
Direct support from the executive during 2001/2002 will amount to£39m, representing an increase of£6m on the previous year, and an additional£16m on the figure for 1998/1999. Indirect support (ie that provided by agencies such as health boards and Scottish Enterprise) for 2001/2002 totals£304 million, an increase of over£35m on the previous year. Ministers believe that in the main it is better to deliver its support to the sector in this way, rather than by continuing with relief generally, given that these simply reflect the rateable value of premises occupied.