Water industry - ministerial objectives and principles of charging statement: partial BRIA

Section 2: Engagement and information gathering

Engagement approach

The Scottish Government has adopted a phased and inclusive approach to engagement throughout the development of the Ministerial Objectives and Principles of Charging for the 2027-33 regulatory period. Engagement to date has focused on collaboration with key water industry stakeholders and cross-government policy alignment, while future engagement will ensure transparency and responsiveness through formal consultation and statutory processes.

To date, officials have engaged with:

• Scottish Water
• Consumer Scotland
• DWQR
• SEPA
• WICS
• The Convention of Scottish Local Authorities
• Local Authorities
• The Central Market Agency
• Representatives of the Licensed Providers in the retail market
• The Office of the Scottish Charity Regulator
• The Scottish Council for Voluntary Organisations

This engagement has been through dedicated working groups - the Future Investment Group and the Future Charging Group. These forums have supported iterative development of the Ministerial Objectives and Principles of Charging, building on the direction set out in the Commissioning Letter. Engagement has also taken place across Scottish Government policy areas to ensure alignment with broader strategic objectives.

It is also worth reflecting on the engagement that has been undertaken by other water industry stakeholders on various parts of the SRC process.

• WICS’ public consultation on their methodology
• Memorandum of understanding on customer engagement between Scottish Water, WICS, and Consumer Scotland that ensures customer engagement is embedded throughout the SRC process
• Feedback from Consumer Scotland, WICS and the other water industry stakeholders on Scottish Water’s draft business plan

Officials have also drawn on a range of evidence sources including published statistics, stakeholder reports, consultation analyses, and relevant government strategies developed since 2021.

The main public consultation on the draft Ministerial Objectives and Principles of Charging has been published alongside this partial BRIA. The Scottish Government will publish an analysis of the responses to the public consultation after the 2026 Scottish Parliament election. WICS will publish its draft determination in June 2026 and then consult on this. Ministers will finalise the Ministerial Objectives and Principles of Charging ahead of WICS publishing its final determination in October 2026. This will ensure that feedback from the public consultation and WICS’ draft determination can be fully considered before the Ministerial Objectives and Principles of Charging are finalised.

Internal SG engagement/ engagement with wider Public Sector

Internal SG engagement

Officials have engaged with relevant Scottish Government policy areas to ensure that the Ministerial Objectives and Principles of Charging align with wider government strategies and priorities, particularly those introduced or updated since April 2021. This engagement has included discussions with teams responsible for the Infrastructure Investment Plan, Scottish National Adaptation Plan, National Planning Framework 4, Scotland’s Circular Economy and Waste Route Map to 2030, National Flood Resilience Strategy, and Scotland's Climate Change Plan – 2026-2040. These interactions have helped identify potential synergies and avoid conflicts with concurrent policy activity affecting the water sector.

Officials will also consider the implications of the proposals for investment and competitiveness. Ahead of finalising the BRIA, engagement is planned with the Directorate for International Trade and Investment (DITI), including the Investment Strategy and Delivery Unit and the Inward Investment Policy Unit. This will ensure alignment with the recommendations of the First Minister’s Investor Panel to position Scotland as a globally competitive investment destination. Current assessment suggests the proposals will support these recommendations and are unlikely to have any detrimental impact.

Further engagement is also planned with the Regulatory Review Group prior to publication of the final BRIA.

UK/ Devolved Administrations

Officials have not engaged with governments in other parts of the UK on these proposals, as they are specific to the water industry and regulatory framework in Scotland. The proposals are expected to have no direct impact on the water industries in England, Wales, or Northern Ireland.

There may, however, be some indirect impacts arising from the scale of capital investment programmes being delivered in England and Wales alongside that proposed by Scottish Water. As outlined in its methodology for the SRC, WICS will consider these factors to ensure Scottish Water can deliver its investment programme efficiently and maintain value for customers.

Wider Public Sector

As previously set out, engagement has taken place with a number of key stakeholders across the wider public sector.

No direct engagement has yet been undertaken with Scotland’s enterprise agencies (Scottish Enterprise, Scottish Development International, Highlands and Islands Enterprise, and South of Scotland Enterprise), the Scottish National Investment Bank, or Scottish Futures Trust. However, the Scottish Government will make these organisations aware of the public consultation and will welcome their views at that stage. This approach will help ensure alignment with wider economic development and investment priorities.

International

No engagement has been undertaken with government organisations in other countries or with foreign policy makers. The proposals for the SRC are specific to Scotland’s water industry and will have no direct impact on water sectors elsewhere. They are not expected to influence trade arrangements or international regulatory frameworks.

Business / Third Sector engagement

Engagement with business stakeholders will predominantly occur through the consultation on the draft Principles of Charging and the Ministerial Objectives. Engagement to date has focused on the perspectives of the Central Market Agency, representing the retail market, and representatives of the Licensed Providers. This has contributed to the development of the Principles of Charging through the Future Charging Group. This has provided insight into the operational and affordability considerations for non-household customers.

In addition, Scottish Water has undertaken research with around 270 business customers as part of its customer research programme for the SRC. This engagement has explored views on the affordability of proposed investment scenarios and identified priority service areas for businesses. The findings of this research will be published at the same time as its final business plan.

Further engagement is planned with a broader range of stakeholders, including business organisations, to inform the finalisation of the Ministerial Objectives and Principles of Charging. This approach aligns with the New Deal for Business principles by ensuring transparency, early involvement, and representation of diverse business models. The Scottish Government will also seek to include small businesses in future engagement activities to assess potential impacts.

No specific engagement has been undertaken with businesses outside Scotland at this stage. However, views from all interested parties will be welcomed during the public consultation.

Public consultation

The Scottish Government has launched a 12-week public consultation to seek views on the proposed Ministerial Objectives and Principles of Charging for the 2027-33 regulatory period. The consultation launched on 6 January 2026 and will close in late March 2026. An analysis of responses will be published after the 2026 Scottish Parliament election. A summary of the feedback received through the public consultation and its influence on the final policy proposals will be included when this BRIA and the Ministerial Objectives and Principles of Charging are finalised by October 2026.

Of the three options presented in this BRIA, the preferred option proposed in the consultation is for an evolution of the existing Ministerial Objectives and Principles of Charging. This approach reflects continuity with previous regulatory periods while incorporating lessons learned and stakeholder feedback. It should be noted that similar Ministerial Objectives and Principles of Charging were consulted on in 2018 and 2020.

The public consultation document is published on the Scottish Government website and Citizen Space to ensure broad public access. The materials are written in clear and accessible language to ensure inclusivity. Statutory consultees and key industry stakeholders have been notified and encouraged to participate.

Feedback from the consultation will inform the refinement of the Ministerial Objectives and Principles of Charging. Identified impacts will be assessed and incorporated into the final proposals to ensure they reflect stakeholder priorities and deliver value for customers and the industry.

Other stakeholders

At this stage, we do not anticipate the need for further consultation with additional stakeholders beyond those identified in other sections of this BRIA. The Scottish Government will, however, keep this position under review until the Ministerial Objectives and Principles of Charging are finalised by October 2026.