Water charges

Regional Council's findings on ''Build, Own Operate'' (BOO) sewerage

capital schemes.

Your suggestion that the council's borrowing to fund capital schemes

is ''guaranteed by the state'' is misleading. Although by Treasury

convention borrowing by Scottish local authorities is included in the

definition of public expenditure, this borrowing is secured entirely

against the local authorities themselves. There is no Government

guarantee for such transactions.

Furthermore, in the case of expenditure for water schemes, the costs

of this borrowing are met entirely and directly by consumers, both

domestic and business, through water charges.

By contrast, the Government does guarantee the debts of the privatised

water companies in England and Wales. Sections 23-4 of the Water Act,

1989, which privatised these undertakings, give the Secretary of State

for Environment explicit powers to step in if any of these companies get

into difficulty and guarantee its borrowings or advance further public

funds to keep the operation afloat.

This makes the dogmatism of the present Government's approach to water

and sewerage in Scotland even more unacceptable: it will clearly bend

the rules and definitions to suit its own approach and to assist its

friends in the City.

Small wonder that more than 97% of those voting in the Strathclyde

water referendum were against the Government's proposals for Scotland's

water. It is not too late for the Government to listen and, at least,

change the legislation and keep water under council control.

John Mullin,

Chair,

Finance Committee,

Strathclyde Regional Council.