Part 1 Water Industry Commission and Customer Panels

1 Water Industry Commission for Scotland

(1) For section 1 (Water Industry Commissioner for Scotland) of the 2002 Act there is substituted—

“1 Water Industry Commission for Scotland

(1) There is established a body to be known as the Water Industry Commission for Scotland (referred to in this Act as “the Commission”).

(2) The Commission has the general function of promoting the interests of persons (taken as a whole) whose premises—

(a) are connected to the public water supply system or the public sewerage system (within the meaning of Part 2 of the Water Services etc. (Scotland) Act 2005 (asp 3)) or both, or

(b) might reasonably become connected to either or both of those systems,

relating to the provision to them of water and sewerage services.

(3) The Scottish Ministers may, after consulting the Commission, give the Commission directions of a general or specific character as to the financial management or administration of the Commission; and the Commission must comply with any such directions.

(4) Schedule A1 makes further provision about the Commission.”.

(2) In section 4 (power of the Commissioner to require information) of that Act, for subsection (2) there is substituted—

“(2) Subsection (1) does not authorise the Commission to require the disclosure of anything which a person would be entitled to refuse to disclose on grounds of confidentiality in proceedings in the Court of Session.

(3) Where Scottish Water considers that it is entitled to withhold information from the Commission—

(a) because it is not reasonably sought, or

(b) by virtue of subsection (2),

it must intimate that fact to the Commission in writing.”.

(3) In section 5 (annual reports by the Commissioner etc.) of that Act, at the end there is added—

“(4) The Scottish Ministers must lay before the Parliament a copy of each report submitted to them under subsection (1)(a).”.

(4) Schedule 1 inserts schedule A1 into that Act.

2 Dissolution of office of Commissioner

The office of Water Industry Commissioner for Scotland is dissolved on such date as the Scottish Ministers may by order appoint.

3 Customer Panels

(1) In section 2 (Water Customer Consultation Panels) of the 2002 Act, for subsections (3) to (5) there is substituted—

“(3) Each Customer Panel is, in relation to the provision of services by Scottish Water in the exercise of its core functions, to have the general function of representing the views and interests of persons whose premises are in the Panel’s area and—

(a) are connected to the public water supply system or the public sewerage system (within the meaning of Part 2 of the Water Services etc. (Scotland) Act 2005 (asp 3)) or both, or

(b) might reasonably become connected to either or both of those systems.

(4) A Customer Panel—

(a) must publish reports on any matter it considers relevant to the interests of those persons in relation to such provision,

(b) may make recommendations to the Commission as to the promotion of the interests of those persons in relation to such provision, either generally or in relation to any specific matter,

(c) may make recommendations, on any matter it considers relevant to the interests of those persons to—

(i) the Scottish Ministers,

(ii) the Drinking Water Quality Regulator for Scotland, and

(iii) the Scottish Environment Protection Agency,

in connection with such of their functions as are exercisable in relation to such provision, and

(d) may make recommendations to Scottish Water on any matter it considers relevant to the interests of those persons in relation to such provision.

(5) Scottish Water must have regard to—

(a) any representations made to it by a Customer Panel, and

(b) any recommendations made to it under subsection (4).

(5A) Any other persons to whom—

(a) any representations are made by a Customer Panel, or

(b) any recommendations are made under subsection (4),

must, in exercising functions in relation to Scottish Water, have regard to the representations or (as the case may be) recommendations.

(5B) A Customer Panel—

(a) must publish a summary of any representations it makes under subsection (3) and of any recommendations it makes under subsection (4), and

(b) may do so by including the summary in a report.

(5C) Any persons to whom recommendations are made under subsection (4) must, within 6 months of receipt, publish a summary of their responses to the recommendations.

(5D) Two or more Customer Panels may exercise their functions under subsections (4) and (5B) jointly.”.

(2) In section 3 (functions of the Commissioner) of that Act, subsections (1) to (5) are repealed.

(3) After section 6 (funding of the Commissioner) of that Act there is added—

“6A Convener of Customer Panels to investigate complaints

(1) The Convener of the Water Customer Consultation Panels (referred to in this Part as the “Convener”) must investigate any complaint made to the Convener, a Customer Panel or the Commission as respects any of Scottish Water’s core functions by any person whose premises—

(a) are connected to the public water supply system or the public sewerage system (within the meaning of Part 2 of the Water Services etc. (Scotland) Act 2005 (asp 3)) or both, or

(b) have been, or might reasonably become, connected to either or both of those systems.

(2) Where any such complaint is made to a Customer Panel or the Commission, the Panel or (as the case may be) the Commission must refer the complaint to the Convener.

(3) The Convener need not investigate a complaint under subsection (1) if—

(a) the complainer has not pursued the matter with Scottish Water, or

(b) it appears to the Convener that the complaint is vexatious or frivolous.

(4) The Convener may, on behalf of the complainer in a complaint investigated under subsection (1), make representations to Scottish Water about any matter—

(a) to which the complaint relates, or

(b) which appears to the Convener to be relevant to the subject matter of the complaint.

(5) Where the Convener investigates a complaint referred under subsection (2), the Convener must send to the Panel or (as the case may be) the Commission a report of the investigation.

(6) Where the Convener decides not to investigate such a complaint, the Convener must send to the Panel or (as the case may be) the Commission a statement of the reasons for not investigating the complaint.

(7) Scottish Water must, on being requested to do so by the Convener, provide the Convener with such information held by it as the Convener may reasonably seek in the exercise of the Convener’s functions relating to complaints under subsection (1).

(8) Where Scottish Water and the Convener cannot agree as to whether information is sought reasonably, either of them may refer the matter to the Scottish Ministers, whose decision is final.

6B Annual reports and information regarding Customer Panels

(1) The Convener must—

(a) as soon as practicable after the end of each financial year, submit to the Scottish Ministers, and publish, a report on the exercise of—

(i) the Customer Panels' functions during that year, and

(ii) the Convener’s functions under section 6A, and

(b) provide the Scottish Ministers with such information regarding the exercise of those functions as they may require.

(2) The Scottish Ministers must lay before the Parliament a copy of each report submitted to them under subsection (1)(a).

6C Co-operation between the Commission and Customer Panels

(1) The Commission and the Convener (as appropriate, representing the Customer Panels as a whole) must together make arrangements with a view to securing—

(a) co-operation and the exchange of information—

(i) between the Commission and Customer Panels,

(ii) between the Commission and the Convener, and

(b) the consistent treatment of matters which affect—

(i) both the Commission and Customer Panels,

(ii) both the Commission and the Convener.

(2) The Commission and the Convener—

(a) must set out the arrangements in a memorandum,

(b) must keep the arrangements under review, and

(c) may from time to time revise the arrangements.

(3) A copy of the memorandum, and of any revised memorandum, must be sent jointly by the Commission and the Convener to the Scottish Ministers.”.

Part 2 Provision of water and sewerage services

Offences

4 Public water supply system: offences

(1) Any person who introduces water into the public water supply system is guilty of an offence.

(2) Any person who uses the public water supply system for the purposes of supplying water to the premises of another person is guilty of an offence.

(3) Any person who makes arrangements for or in relation to the supply of water to the premises of another person through the public water supply system is guilty of an offence.

(4) Subsections (1) to (3) do not apply to—

(a) Scottish Water; or

(b) another person if (and to the extent that) the person is acting on behalf of Scottish Water or under its authority.

(5) Subsections (2) and (3) do not apply to a person if (and to the extent that) the person is supplying water with the help of services provided by Scottish Water as described in section 30 of the 2002 Act.

(6) Subsection (3) does not apply to a water services provider where the provider is acting as authorised by the water services licence held by the provider.

(7) The Scottish Ministers may by regulations—

(a) specify other circumstances in which subsection (1), (2) or (3) does not apply; or

(b) specify that subsection (1), (2) or (3) does not apply—

(i) to such other person or to such category of person; and

(ii) to such extent and subject to such conditions,

as may be specified in the regulations.

(8) The Scottish Ministers are to consult—

(a) Scottish Water;

(b) the Commission; and

(c) such other persons as they consider appropriate,

on any regulations they propose to make under subsection (7).

(9) It is competent to make regulations under subsection (7) only if the effect of the regulations would not be prejudicial to the exercise of Scottish Water’s core functions as respects the supply of water.

(10) A person who is guilty of an offence under subsection (1) is liable—

(a) on summary conviction, to a fine not exceeding £20,000; or

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or to both.

(11) A person who is guilty of an offence under subsection (2) or (3) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to a fine.

(12) Any contract or other agreement which involves a contravention of subsection (1), (2) or (3) is unenforceable.

5 Public sewerage system: offences

(1) Any person who draws sewage from the public sewerage system is guilty of an offence.

(2) Any person who uses the public sewerage system for the disposal of sewage from the premises of another person is guilty of an offence.

(3) Any person who makes arrangements for or in relation to the provision of sewerage to, or disposal of sewage from, the premises of another person through the public sewerage system is guilty of an offence.

(4) Subsections (1) to (3) do not apply to—

(a) Scottish Water; or

(b) another person if (and to the extent that) the person is acting on behalf of Scottish Water or under its authority.

(5) Subsections (2) and (3) do not apply to a person if (and to the extent that) the person is providing sewerage, or disposing of sewage, with the help of services provided by Scottish Water as described in section 30 of the 2002 Act.

(6) Subsection (3) does not apply to a sewerage services provider where the provider is acting as authorised by the sewerage services licence held by the provider.

(7) The Scottish Ministers may by regulations—

(a) specify other circumstances in which subsection (1), (2) or (3) does not apply; or

(b) specify that subsection (1), (2) or (3) does not apply—

(i) to such other person or to such category of person; and

(ii) to such extent and subject to such conditions,

as may be specified in the regulations.

(8) The Scottish Ministers are to consult—

(a) Scottish Water;

(b) the Commission; and

(c) such other persons as they consider appropriate,

on any regulations they propose to make under subsection (7).

(9) It is competent to make regulations under subsection (7) only if the effect of the regulations would not be prejudicial to the exercise of Scottish Water’s core functions as respects the provision of sewerage and disposal of sewage.

(10) A person who is guilty of an offence under subsection (1) is liable—

(a) on summary conviction, to a fine not exceeding £20,000; or

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or to both.

(11) A person who is guilty of an offence under subsection (2) or (3) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to a fine.

(12) Any contract or other agreement which involves a contravention of subsection (1), (2) or (3) is unenforceable.

(13) In this Part, “sewage” is to be construed in accordance with section 59(1) (interpretation) of the 1968 Act.

Licensing of services to eligible premises

6 Licence authorisation

(1) The Commission may, subject to section 7 and paragraphs 1 and 2 of schedule 2, grant a licence authorising a person—

(a) to—

(i) make arrangements with the occupier of any eligible premises for or in relation to the supply of water to the premises through the public water supply system; and

(ii) fix, demand and recover charges for or in relation to the supply of water to any premises in respect of which the person has made such arrangements; and

(b) to make such arrangements with Scottish Water and such other persons as are necessary for the purposes of or in connection with the things mentioned in paragraph (a).

(2) A licence granted under subsection (1) is in this Act referred to as a “water services licence”; and a person who holds a water services licence is in this Act referred to as a “water services provider”.

(3) The Commission may, subject to section 7 and paragraphs 1 and 2 of schedule 2, grant a licence authorising a person—

(a) to—

(i) make arrangements with the occupier of any eligible premises for or in relation to the provision of sewerage to, or the disposal of sewage from, the premises through the public sewerage system; and

(ii) fix, demand and recover charges for or in relation to the provision of sewerage to, and disposal of sewage from, any premises in respect of which the person has made such arrangements; and

(b) to make such arrangements with Scottish Water and such other persons as are necessary for the purposes of or in connection with the things mentioned in paragraph (a).

(4) A licence granted under subsection (3) is in this Act referred to as a “sewerage services licence”; and a person who holds a sewerage services licence is in this Act referred to as a “sewerage services provider”.

(5) The references in subsections (1) and (3) to the occupier of premises are, if the premises are unoccupied, to be construed as references to the owner of the premises.

7 Granting of licences

(1) The Commission may grant a water services licence or a sewerage services licence only if satisfied that the applicant has the ability to perform adequately the activities authorised by the licence.

(2) In assessing an applicant’s ability so to perform those activities, the Commission is to have special regard to the following factors (in so far as relevant in relation to the performance of those activities)—

(a) knowledge, expertise and experience; and

(b) financial acumen and business viability,

and such other matters as the Scottish Ministers may by order specify.

(3) The Commission may issue guidance (either generally or in a particular case or category of case) in relation to the things mentioned in subsection (2).

(4) A water services licence and a sewerage services licence—

(a) must be in writing; and

(b) unless revoked or suspended, continues in force for such period as may be specified in or determined by or under the licence.

(5) As soon as practicable after refusing an application for a water services licence or a sewerage services licence, the Commission is to intimate the refusal to—

(a) the applicant; and

(b) Scottish Water.

(6) As soon as practicable after granting a water services licence or a sewerage services licence, the Commission is to send a copy of the licence to—

(a) the person to whom it is granted; and

(b) Scottish Water.

8 Compliance with licences

(1) The Commission is to—

(a) monitor compliance with the terms and conditions of water services licences and sewerage services licences; and

(b) take such steps as it considers are necessary for the purposes of ensuring that the terms and conditions of such licences are complied with.

(2) The Commission may give directions to any water services provider or sewerage services provider for the purpose of ensuring that the provider complies with the terms and conditions of the provider’s licence; and the provider must comply with any such directions.

(3) The Commission may issue guidance (either generally or in a particular case or category of case) in relation to compliance with the terms and conditions of water services licences and sewerage services licences.

(4) Scottish Water must report to the Commission any contravention of a term or condition of a water services licence or a sewerage services licence which appears to it to have occurred or be occurring.

9 Fees relating to licences

(1) The Commission may, for the purpose mentioned in subsection (2), make a scheme (a “fees scheme”) which specifies—

(a) the matters relating to water services and sewerage services licences in respect of which fees are payable; and

(b) the amounts of fees payable (and, as appropriate, the persons by whom they are payable) in respect of each of those matters.

(2) The purpose is securing that the fees payable in accordance with the scheme are sufficient to meet the costs incurred by the Commission in exercising its functions relating to water services and sewerage services licences.

(3) A fees scheme may, in particular—

(a) impose on licence-holders fees by way of annual levies; and

(b) specify fees by reference to maximum amounts.

(4) A fees scheme may make provision with respect to the times and methods of payment of the fees specified by the scheme.

(5) A fees scheme may—

(a) make different provision for different cases or types of case;

(b) revoke or amend a previous scheme.

(6) The Commission must—

(a) send any fees scheme to the Scottish Ministers for approval; and

(b) publish a summary of the scheme (and, in doing so, invite representations for the purposes of subsection (7)).

(7) The Scottish Ministers—

(a) must have regard to any representations about a fees scheme which are made to them within 4 weeks of publication of the summary of it under subsection (6)(b); and

(b) may approve a fees scheme with or without modifications.

(8) If the Scottish Ministers approve a fees scheme with modifications, they must give their reasons for doing so.

(9) When a fees scheme has been approved under subsection (7), the Commission—

(a) must—

(i) make arrangements for allowing any person to obtain a copy of the scheme on payment of such reasonable fee (if any) as the Commission may determine; and

(ii) publicise those arrangements and publish the scheme; and

(b) may charge and recover fees in accordance with the scheme.

10 Licensed providers to give information

(1) Water services providers and sewerage services providers must provide the Commission with such information (including information in the form of a document) as it reasonably requires in the exercise of its functions.

(2) Subsection (1) does not authorise the Commission to require the disclosure of anything that a person would be entitled to refuse to disclose on grounds of confidentiality in proceedings in the Court of Session.

(3) Any person who fails, without reasonable excuse, to provide information required by the Commission under subsection (1) is guilty of an offence.

(4) A person who is guilty of an offence under subsection (3) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on indictment, to a fine.

11 Participation of licensed providers

(1) The Commission is (so far as is consistent with the exercise of its function under section 1(2) of the 2002 Act) to exercise its functions relating to water services and sewerage services licences for the purposes of securing the participation—

(a) in an orderly manner; and

(b) in a manner that is not detrimental to the exercise of Scottish Water’s core functions,

of water services and sewerage services providers in the provision of water and sewerage services.

(2) The Commission may give directions of a specific or general character to—

(a) Scottish Water; or

(b) any—

(i) water services or sewerage services provider; or

(ii) person in whose favour it intends to grant a water services or sewerage services licence,

as to steps to be taken for the purposes mentioned in subsection (1).

(3) Directions under subsection (2) may, in particular, relate to—

(a) any costs attributable to the participation of water services and sewerage services providers in the provision of water and sewerage services; and

(b) the provision or exchange of information about customers of water services or sewerage services providers.

(4) Before giving directions under subsection (2), the Commission must consult any person to whom the directions are to be given.

(5) Any person to whom directions are given under subsection (2) must comply with the directions.

12 Licences and compliance: further provision

Schedule 2 makes further provision regarding licences and compliance with licences.

Scottish Water: water and sewerage services undertaking

13 Water and sewerage services undertaking

(1) Scottish Water must, in accordance with any requirements made under subsection (2), secure the establishment of a business undertaking for the purposes of this section.

(2) The Scottish Ministers may require Scottish Water to—

(a) take such steps for the purposes of or in connection with—

(i) the establishment and development of the undertaking; and

(ii) Scottish Water’s interest in the undertaking,

as the Scottish Ministers may specify; and

(b) take the steps, or any particular steps, by such date as they may specify.

(3) It is, subject to the approval of the Scottish Ministers, for Scottish Water to determine whether the undertaking is—

(a) to be—

(i) a subsidiary (to be construed in accordance with section 736 of the Companies Act 1985 (c. 6)) of Scottish Water;

(ii) a company (within the meaning of that Act) formed by Scottish Water (on its own or with others); or

(iii) a partnership; or

(b) to be established through such other arrangements as Scottish Water considers it appropriate to make.

(4) The functions of the undertaking are—

(a) to become a water services provider and a sewerage services provider; and

(b) thereafter, to perform the activities authorised by the water services and sewerage services licences held by it.

(5) Accordingly, the undertaking must (as soon as reasonably practicable after it is established) apply for a water services licence and a sewerage services licence.

(6) The Scottish Ministers may by order provide that paragraphs 1 and 2 of schedule 2 have effect—

(a) as regards an initial application by the undertaking for a licence; and

(b) following such an application, as regards the granting of the licence and the incorporation in it of conditions,

with or subject to such modifications as the order may specify.

(7) The undertaking may engage in any activity which it considers is not inconsistent with the performance of the activities authorised by the water services and sewerage services licences held by it.

(8) After the undertaking is established, Scottish Water must not treat it any more or less favourably than it treats—

(a) in relation to services as respects the supply of water, other water services providers; and

(b) in relation to services as respects the provision of sewerage and the disposal of sewage, other sewerage services providers.

(9) Any reference in any enactment to Scottish Water is to be construed as not including the undertaking.

14 Financing, borrowing and guarantees

(1) In such circumstances as the Scottish Ministers may by order specify, the Scottish Ministers may, with the consent of Scottish Water, make grants to the business undertaking established under section 13(1) of such amounts as the Scottish Ministers may determine.

(2) In such circumstances as the Scottish Ministers may by order specify, the undertaking—

(a) may, with the consent of Scottish Water, borrow from the Scottish Ministers (and they may lend to it) sums of such amounts as the Scottish Ministers may determine;

(b) may not, except as described in subsection (4)(b), borrow money from any other person apart from Scottish Water.

(3) In any financial year, the net amount of sums borrowed under subsection (2)(a) must not exceed the amount specified for that year for the purposes of this subsection in a Budget Act.

(4) In subsection (3), “net amount” means the amount of sums borrowed in the financial year less—

(a) any repayments made during that year, otherwise than by way of interest, in respect of sums borrowed in that or any other year; and

(b) any sums borrowed, with the consent of Scottish Water, by way of overdraft or otherwise for the purpose of meeting a temporary excess of expenditure over sums otherwise available to meet that expenditure.

(5) Any loans made under subsection (2)(a) are to be repaid to the Scottish Ministers at such times and by such methods, and interest on the loans is to be paid to them at such times and at such rates, as they may from time to time specify.

(6) In such circumstances as the Scottish Ministers may by order specify, the Scottish Ministers may guarantee, in such manner as they consider appropriate, the discharge of any financial obligation in connection with any sums borrowed as described in subsection (4)(b).

(7) Immediately after a guarantee is given under subsection (6), the Scottish Ministers must lay a statement of the guarantee before the Parliament.

(8) Where any sums are paid out in fulfilment of a guarantee under subsection (6), the undertaking must make to the Scottish Ministers, at such times and in such manner as they may from time to time specify—

(a) payments of such amounts as they may so specify in or towards repayment of those sums; and

(b) payments of interest, at such rate as they may so specify, on the amount outstanding for the time being in respect of those sums.

(9) In such circumstances as the Scottish Ministers may by order specify, the Scottish Ministers may, with the consent of Scottish Water, subscribe for share or loan capital of the undertaking.

(10) Any—

(a) grants under subsection (1) may be made;

(b) loans under subsection (2)(a) may be made;

(c) guarantees under subsection (6) may be given; and

(d) subscriptions for share or loan capital under subsection (9) may be made,

subject to such conditions as the Scottish Ministers consider it appropriate to impose.

15 Transfer of staff etc. to the undertaking

(1) Scottish Water must, following a requirement made by the Scottish Ministers to do so, transfer such of its staff to the employment of the business undertaking established under section 13(1) as are necessary for the purposes of or in connection with the matters mentioned in subsection (8).

(2) The contract of employment of a person transferred by virtue of subsection (1)—

(a) is not terminated by the transfer; and

(b) has effect from the date of transfer as if originally made between the person and the undertaking.

(3) Without prejudice to subsection (2), where a person is transferred to the employment of the undertaking by virtue of subsection (1)—

(a) all the rights, powers, duties and liabilities of Scottish Water under or in connection with the person’s contract of employment are transferred to the undertaking on the date of transfer; and

(b) anything done before that date by or in relation to Scottish Water in respect of the person or that contract is to be treated from that date as having been done by or in relation to the undertaking.

(4) Subsections (1) to (3) do not affect any right of any person to terminate the person’s contract of employment if the terms and conditions of employment are changed substantially to the detriment of the person; but such a change is not to be taken to have occurred by reason only that the identity of the person’s employer changes by virtue of those subsections.

(5) Scottish Water must, following a requirement made by the Scottish Ministers to do so, transfer such of its property (including rights) and liabilities to the undertaking as are necessary for the purposes of or in connection with the matters mentioned in subsection (8).

(6) A transfer by virtue of subsection (5) may be—

(a) to such extent; and

(b) subject to such conditions,

as Scottish Water may, with the consent of the Scottish Ministers, determine.

(7) A transfer by virtue of subsection (5)—

(a) has effect in relation to any property and liabilities to which it applies despite any provision (of whatever nature) which would otherwise prevent, penalise or prohibit the transfer of the property or liabilities; and

(b) has the effect of vesting in the undertaking any property or liabilities to which it applies.

(8) For the purpose of subsections (1) and (5), those matters are—

(a) applications by the undertaking for water services and sewerage services licences; and

(b) the performance by the undertaking of its activities.

Scottish Water: services via licensed providers

16 Scottish Water to provide services

(1) Where a water services provider has made arrangements with the occupier of eligible premises for the supply of water to the premises, the provider may request Scottish Water to supply (or continue to supply) water through the public water supply system to the premises.

(2) Scottish Water must, so far as is consistent with the exercise of its core functions as respects the supply of water, supply water as so requested subject to agreement between Scottish Water and the provider as to the terms and conditions that are to apply in relation to that supply.

(3) A duty to supply water under subsection (2)—

(a) ceases if—

(i) the arrangements mentioned in subsection (1) have come to an end (unless the duty is continued under section 17(1)); or

(ii) the supply is discontinued under section 18; and

(b) may be superseded by a new duty under subsection (2).

(4) Where a sewerage services provider has made arrangements with the occupier of eligible premises for the provision of sewerage to, or disposal of sewage from, the premises, the provider may request Scottish Water to provide (or continue to provide) sewerage to, or dispose of (or continue to dispose of) sewage from, the premises through the public sewerage system.

(5) Scottish Water must, so far as is consistent with the exercise of its core functions as respects the provision of sewerage and disposal of sewage, provide sewerage and dispose of sewage as so requested subject to agreement between Scottish Water and the provider as to the terms and conditions that are to apply in relation to that provision or disposal.

(6) A duty to provide sewerage or dispose of sewage under subsection (5)—

(a) ceases if the provision or (as the case may be) disposal is discontinued under section 20; and

(b) may be superseded by a new duty under subsection (5).

(7) Where no agreement as is mentioned in subsection (2) or (5) is reached, the Commission, on the application of the provider in question, may determine the terms and conditions that are to apply in relation to the supply or (as the case may be) provision or disposal; and those terms and conditions have effect as if agreed between the provider and Scottish Water.

17 Continuation of water services

(1) Where—

(a) water is supplied to premises by Scottish Water under subsection (2) of section 16; and

(b) the arrangements for the supply of water (made between the occupier of the premises and the water services provider who made the related request under subsection (1) of that section in respect of the premises) have come to an end—

(i) by reason of the revocation or suspension of the licence held by the provider; or

(ii) for any other reason (except where the supply is discontinued under section 18),

the duty of Scottish Water under subsection (2) of section 16 to supply water to the premises continues for the period mentioned in subsection (2).

(2) The period is 2 months, or such longer period as Scottish Water agrees to, from the date on which the arrangements mentioned in subsection (1)(b) came to an end.

(3) But the continuation under subsection (1) of a duty to supply water ceases if—

(a) it is superseded by a new duty under subsection (2) of section 16; or

(b) the occupier of the premises notifies Scottish Water that the supply of water is not required.

(4) In section 9 (supply of water for non-domestic purposes) of the 1980 Act, after subsection (2), there is inserted—

“(2A) Where a supply of water has been made to premises under subsection (2) of section 16 of the Water Services etc. (Scotland) Act 2005 (asp 3) but—

(a) the arrangements for the supply (made between the occupier of the premises and the water services provider who made the related request under subsection (1) of that section in respect of the premises) are at an end, or are to come to an end, in consequence of non-payment of charges owed to the provider in relation to the water supplied; or

(b) the supply is discontinued (or is to be discontinued) under section 18(5) of that Act,

Scottish Water shall not be required to give a supply of water to the premises in accordance with subsection (1) if it is of the opinion that there is no reasonable prospect of recovering the charges (or any significant proportion of the charges) which it would be entitled to recover in relation to that supply of water were it given.

(2B) Where Scottish Water decides, by virtue of subsection (2A), not to give a supply of water to premises, the occupier of the premises may by notice require the Water Industry Commission for Scotland to review that decision.

(2C) In a review under subsection (2B), the Commission may, having regard to any representations made to it by the parties—

(a) confirm the decision of Scottish Water; or

(b) direct Scottish Water to give a supply of water to the premises in accordance with subsection (1),

and the determination of the Commission in the review shall be final.”.

18 Discontinuation of water services

(1) A water services provider may request Scottish Water to discontinue a supply of water to premises made under subsection (2) of section 16.

(2) At least 14 days before making a request under subsection (1), the provider must serve a notice of the provider’s intention to make such a request on—

(a) the occupier of the premises;

(b) Scottish Water; and

(c) the Commission.

(3) The notice must be in such form and contain such particulars as the Scottish Ministers may by order prescribe.

(4) An occupier of premises who has been served with a notice under subsection (2) may, within 10 days of the date of service of the notice, make representations to the provider about the notice; and the provider must have regard to any representations so made.

(5) Where a request is made under subsection (1), Scottish Water is to discontinue the supply of water made under section 16(2) to the premises if the conditions mentioned in subsection (6) are satisfied.

(6) The conditions are that—

(a) the provisions of the code made under section 19 are complied with; and

(b) any supply of water to—

(i) the premises for domestic purposes; or

(ii) any other premises for any purpose,

is not adversely affected by the discontinuation.

(7) In subsection (6)(b)(i), what is a supply of water for domestic purposes is to be construed in accordance with section 7 (supply of water for domestic purposes) of the 1980 Act.

(8) Any reasonable costs incurred by Scottish Water in effecting a discontinuation under this section are to be met by the water services provider who made the request under subsection (1) for the discontinuation.

(9) If there is a dispute between a water services provider and Scottish Water as to reasonable costs incurred in effecting a discontinuation under this section, Scottish Water is to refer the matter to the Commission for determination; and the determination of the Commission in the matter is final.

19 Disconnections code

(1) For the purposes of subsection (6)(a) of section 18, the Commission must make a code (a “disconnections code”) which contains further provision about discontinuations of supplies of water to premises under that section.

(2) In particular, a disconnections code may specify—

(a) circumstances in which requests under subsection (1) of section 18 may (or may not) be made; and

(b) conditions (in addition to the condition mentioned in subsection (6)(b) of that section) which are to be satisfied before Scottish Water is required under subsection (5) of that section to discontinue a supply of water to premises.

(3) A disconnections code may—

(a) make different provision for different cases or types of case;

(b) revoke or amend a previous code.

(4) In making a disconnections code, the Commission must consult—

(a) Scottish Water;

(b) every water services provider and sewerage services provider;

(c) the Convener of the Water Customer Consultation Panels (representing the Panels as a whole);

(d) the Drinking Water Quality Regulator for Scotland; and

(e) such other persons as the Commission considers appropriate.

(5) When a disconnections code is made, the Commission must—

(a) make arrangements for allowing any person to obtain a copy of the code on payment of such reasonable fee (if any) as the Commission may determine; and

(b) publicise those arrangements and publish the code.

20 Continuation and discontinuation of sewerage services

(1) Where sewerage is provided to, or sewage is disposed of from, premises by Scottish Water under subsection (5) of section 16, Scottish Water is to continue providing sewerage to, or (as the case may be) disposing of sewage from, the premises even if the arrangements for that provision or disposal (made between the occupier of the premises and the sewerage services provider who made the related request under subsection (4) of that section in respect of the premises) have come to an end.

(2) Subsection (1) does not apply in relation to any trade effluent services.

(3) Where—

(a) trade effluent services are provided to premises by Scottish Water under subsection (5) of section 16; and

(b) the arrangements for the provision of the services (made between the occupier of the premises and the sewerage services provider who made the related request under subsection (4) of that section in respect of the premises) have come to an end—

(i) by reason of the revocation or suspension of the licence held by the provider; or

(ii) for any other reason (except where the services are discontinued under subsection (10)),

the duty of Scottish Water under subsection (5) of section 16 to provide trade effluent services to the premises continues for the period mentioned in subsection (4).

(4) The period is 2 months, or such shorter period as Scottish Water with the Commission’s consent determines, from the date on which the arrangements mentioned in subsection (3)(b) came to an end.

(5) But the continuation under subsection (3) of a duty to provide trade effluent services ceases if—

(a) it is superseded by a new duty under subsection (5) of section 16; or

(b) the occupier of the premises notifies Scottish Water that the trade effluent services are not required.

(6) A sewerage services provider may request Scottish Water to discontinue any trade effluent services provided to premises under subsection (5) of section 16.

(7) At least 14 days before making a request under subsection (6), the provider must serve a notice of the provider’s intention to make such a request on—

(a) the occupier of the premises;

(b) Scottish Water; and

(c) the Commission.

(8) The notice must be in such form and contain such particulars as the Scottish Ministers may by order prescribe.

(9) An occupier of premises who has been served with a notice under subsection (7) may, within 10 days of the date of service of the notice, make representations to the provider about the notice; and the provider must have regard to any representations so made.

(10) Where a request is made under subsection (6), Scottish Water is to discontinue the trade effluent services provided under section 16(5) to the premises if the conditions mentioned in subsection (11) are satisfied.

(11) The conditions are that—

(a) any provision of sewerage to, or disposal of sewage from—

(i) the premises for a purpose otherwise than in respect of trade effluent; or

(ii) any other premises for any purpose,

is not adversely affected by the discontinuation; and

(b) there is no likely risk to public health arising in consequence of the discontinuation.

(12) Any reasonable costs incurred by Scottish Water in effecting a discontinuation under this section are to be met by the sewerage services provider who made the request under subsection (6) for the discontinuation.

(13) If there is a dispute between a sewerage services provider and Scottish Water as to reasonable costs incurred in effecting a discontinuation under this section, Scottish Water is to refer the matter to the Commission for determination; and the determination of the Commission in the matter is final.

(14) This section is without prejudice to any provision in Part II of the 1968 Act relating to trade effluent services.

(15) In this section, “trade effluent services” means the provision of sewerage, or disposal of sewage, in respect of trade effluent.

(16) In subsection (15), “trade effluent” is to be construed in accordance with section 59(1) (interpretation) of the 1968 Act.

Scottish Water: charges and functions

21 Scottish Water’s charges for water and sewerage services

(1) For section 29 (charges for goods and services) of the 2002 Act there is substituted—

“29 Charges for goods and services

(1) Scottish Water may—

(a) demand and recover charges for any services provided by it in the exercise of its core functions, and

(b) fix, demand and recover charges for any goods suppli