Businesses will quiz water bosses

Jim Mather and Jeremy Purvis have been tasked with looking at customer charges, the structure of the industry, its debt burden and the role of ministers and the water commissioner.

Their work will take place ahead of a full investigation at the beginning of December.

The move comes on the day it was announced that Scottish companies are to be given the chance to confront Scottish Water over bills some businesses claim are a threat to their future.

The Federation of Small Businesses (FSB) said many firms had seen a surge in the amount they paid and wanted a fairer system.

Water Commissioner Alan Sutherland said the industry was getting more efficient, but households were still paying about �80 a year too much.

Now, some businesses have said that their bills had risen by up to 500% in the past two years.

Future charges

They claim the increases threaten their future and are calling for an overhaul of the system of charging.

The move was welcomed by the FSB, but it said it wanted a full and open debate about future charges at the meeting on Tuesday evening.

A report on Monday showed Scottish Water had reduced its operating costs by �3m, or nearly 10%, in its first year.

The body's current operating costs were running at �351.2m in 2002-03.

I believe it deserves the support of customers, both household and business Ross Finnie Environment minister

To reach the operating cost target of �265m which Mr Sutherland has set for the industry, Scottish Water will have to achieve annual savings of more than 11% for each of the next three years.

Environment Minister Ross Finnie welcomed the progress made so far.

The minister said the 10% efficiency savings in operating costs and 5% in procurement costs vindicated the executive's decision to create Scottish Water and proved the system of regulation was working.