# The Water and Sewerage Authorities (Rate of Return) (Scotland) Order 1996, Article 4: Return on value of net assets


(1) 6.5% is hereby specified as the rate of return which the Secretary of State considers it reasonable for an authority to achieve on the value of their net assets for a financial year (in this article referred to as “the specified rate”).
(2) It is hereby directed that, during each financial year commencing after 31st March 1996, each authority shall discharge their functions with a view to securing that their achievement for that year, expressed as a percentage of the value of their net assets for that year, is not less than the specified rate.
(3) For the purposes of paragraph (2) above, the achievement of an authority for a year means—
(a) in respect of the financial year commencing on 1st April 1996, that authority’s operating surplus for that year;
(b) in respect of any subsequent financial year, that authority’s operating surplus for that year—
(i) reduced, where the achievement of that authority for the immediately preceding financial year was less than that provided for in paragraph (2) above, by the amount by which it was less (adjusted to take account of the effects of inflation in accordance with any accounts requirement); or
(ii) increased, where the achievement of that authority for the immediately preceding financial year was greater than that provided for in paragraph (2) above, by the amount by which it was greater (adjusted to take account of the effects of inflation in accordance with any accounts requirement).

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Source: https://www.legislation.gov.uk/uksi/1996/744/article/4 (the official version)
Page: https://openlegislation.uk/water-and-sewerage-authorities-rate-of-return-scotland-order-1996/article-4
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.