WATER PRICE RISES TO BE KEPT TO A MINIMUM - KYNOCH

The three new Scottish water authorities are a public sector service and will be expected to keep charge rises to a minimum and deliver a quality product to their customers, George Kynoch, Scottish Office minister with responsibility for water and sewerage, said today.

'The new water authorities still have to produce their charges schemes for 1996-97 and have to get them through the Customers Council. Council chairman, Dick Douglas, has already served notice that he will take a lot of convincing to accept increases in the region of 15%, as some have speculated.

'The new water authorities will be expected to keep charge rises to a minimum and deliver a quality product to their customers. They are a public service in the public sector working for the public as a whole. I am confident they will do a first class job.

'Of course costs will increase - there is a massive investment programme to finance. Indeed, water charges in Scotland have already gone up 76% in the last six years whilst under local government control as a part of this programme.

'This government is committed to giving the customer a better deal and, far from being expensive, the use of private finance can be a cost effective option. Value for money is a key principle of the Private Finance Initiative. Strathclyde's arguments on BOO costs were shot down months ago. A Scottish Office response to the regional councils's study was placed in the House of Commons last November.

'Of course, the huge investment programme can be funded through additional public expenditure and the value for money option of private finance ignored. But this would inevitably mean cuts in other services like health and education. This government is not prepared to expose the Scottish people to that sort of Russian roulette.'