ABSTRACTThe paper outlines the statutory arrangements governing water and sewerage charges in Scotland, and comments on the factors affecting the levels of charges. Trends in revenue expenditure over the period 1989–90 to 1992–93 are considered in relation to increases in personal community water charge levels, metered water rates, and costs per household. Non‐domestic sewerage rates and industrial effluent charges are also discussed. Some comparisons are made with England and Wales and with other countries. The funding arrangements for capital expenditure and their effect on the levels of charges are described, with particular reference to debt levels and rising expenditure to meet UK and EC standards. Factors affecting future charge levels are also ident