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This charter is presented as a draft - the STUC welcomes views and comments
from other interested parties. See also... STUC
charter for Scotland’s water industryScottish
Water should remain publicly owned and accountable. The challenges facing a publicly
owned industry are considerable but not impossible to overcome given time. The
key requirement for creating a safe, efficient and effective water industry will
be the implementation of a more realistic financial framework rooted in the realities
of the water and sewage infrastructure in Scotland, not economic theory or false
comparisons with England. A public
water industry should be focussed on the following objectives:
- Providing an effective and accessible public service;
- Maintaining
public health;
- Protecting the environment;
and,
- Underpinning economic development.
In
this Charter, we highlight some key principles which, if followed, will help to
ensure that these objectives are achieved. Structure
The regulator, some business
groups and elements of the Scottish media have sought to exploit dissatisfaction
over water charges to undermine Scottish Water and pursue a privatisation agenda.
Ongoing EU internal market reforms and GATS negotiations are also likely to increase
pressure on the public corporation model. The
STUC remains of the view that privatisation offers no solution to the challenges
facing the industry. That view is supported by the experience of water workers
and water users in England and Wales. It is the partial privatisation of Scotland’s
water through PPP/PFI schemes that has led to higher costs and a fragmented service.
Mutualisation is also rejected by the trade unions on the grounds that a mutual
solution in a capital-intensive industry like water is simply privatisation with
the facade of public involvement. The
STUC does not believe that there are any viable alternatives to Scottish Water
nor does it believe that the pursuit of alternatives is justified by the performance
of the corporation. Scottish Water remains the only practical way forward and
it is essential that the corporation is afforded the opportunity to build on its
improving performance. A further reorganisation would only cause damage to the
industry and further reduce the pace of investment. The
public corporation model provides democratic accountability and acknowledges that
the treatment and supply of water must be treated as an important element of social
policy Finance A
major upgrading of water and sewage systems is necessary to meet the objectives
listed in paragraph 2. The cost of upgrading the infrastructure is significant
and can only be met by water charges or from the block grant. The financing of
Scottish Water is highly complex and not helped by the availability and presentation
of published data. This is reflected in public understanding, particularly when
charges increase. This understanding is not helped by exaggerated claims by special
interest groups many of whom have benefited from years of very low charges. Public
Private Partnerships (PPP) are poor value for money and contribute to the gradual
privatisation of the industry. Charges The
reason for the recent very large increase in charges is the necessary and long
overdue capital investment programme now being undertaken by Scottish Water. Rising
charges can be attributed to the cost of these capital projects being financed
out of annual revenue. The problems with water charges have largely resulted form
the pace of harmonisation and the structure of charges recommended by the WIC.
The STUC believes it is wrong to
seek to recover the cost of long-term capital investment programmes from today’s
water customers when the greatest benefit from these will accrue to future generations.
Regulation An
effective regulatory regime should be focused on helping achieve the objectives
listed at paragraph 2. The public provision of a safe and environmentally sustainable
water and sewage system has broad political support but is put at risk if regulation
focuses, without regard to quality of service, on crude, short term efficiency
measures more appropriate to a private setting. Regulators
must pay due heed to the wider social and economic ramifications of their decisions.
Analysis must be based on evidence and not unhelpful comparisons with water industries
in other countries with major structural differences. The
current regulatory structure is unacceptable. A board, including representatives
of the workforce and accountable to Scottish ministers, should be established
to oversee regulation of the industry. It is also essential that the regulators
adopt an open consultative approach and are duty bound to fully explain the reasoning
behind their decisions. Employment The
STUC and its affiliates always recognised that the introduction of more efficient
plant and equipment together with new methods of working and the economies of
scale Scottish Water brings, would result in job losses. However, we continue
to have serious concerns about the scale of job losses and the pace of change. Apart
from the economic and social impact of job losses to date, often in small rural
communities, there are very real implications for safety and customer service.
Most of the staffing changes have happened before capital investment has been
introduced and therefore it is inevitable that safety is compromised and customer
service reduced. Employment levels
in the water industry should be linked to the completion of new facilities and
safe systems – not financial targets. The loss of experienced staff could fatally
undermine safety and customer service. Employees
within the industry should be recognised as its strongest asset. Good employment
practice is at the heart of high quality public services. High quality, efficient
and effective water and sewage services, will best be achieved by a well resourced,
motivated, trained and rewarded workforce, with extensive opportunities to influence
decisions about the development of the industry. Scottish
Trades Union Congress May 2004
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Scotland's
public service union
