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No. Local authorities were issued with indicative expenditure guidelines this year. Most authorities have exercised their own discretion sensibly. Eight authorities have set budgets in excess of the guidelines, but in the case of five authorities only by a small amount. The other three authorities - Aberdeenshire, East Dunbartonshire and Perth and Kinross - have made larger increases. I met these councils with the Secretary of State for Scotland to discuss why they have made such large increases. The Secretary of State subsequently announced in the House of Commons that the authorities would not be capped, but at the meeting we did put them on warning that we will expect them to return to guideline next year. I have also asked each council to submit to me an action plan detailing what measures they intend to take to ensure that they do return to guideline next year, and they agreed to do so before the end of July.

We believe that the new regulatory regime set out in the Water Industry Act will best serve the interests of water customers. The Act provides for a Water Industry Commissioner with the statutory function to promote the interests of customers. The Commissioner will be a professional regulator with the duty of advising Ministers on all aspects of economic and customer regulation. The Commissioner will ensure that water customers in Scotland get the best possible deal from the water authorities on price and service.The Executive intends that the new regime will become operational on 1 November. As a first step, a notice will appear in the press shortly advertising the Commissioner's post.