asked the Secretary of State for the Environment what study he has made of the increased charges imposed by the water authorities and their expenditure pattern; and if he will establish specific financial targets for these authorities.
The Water Act 1973 obliges water authorities to break even on revenue account, taking one year with another. My right hon. Friend sets a limit on capital expenditure by water authorities each year, but their revenue spending is not subject to his control. It is for each authority to decide what levels of expenditure are necessary to discharge their functions; to set their charges at the levels required to meet their statutory obligation to break even; and to justify those charges to the public. All water authority budgets are subject to scrutiny by the Price Commission.I have no plans to set additional financial targets for water authorities.