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Mutual Scottish Water?

On Thursday 19 June 2003 the Scottish Tories are initiating a debate in the Scottish Parliament on the Scottish water industry calling for the mutualisation of Scottish Water.

The coalition agreement Partnership for a Better Scotland commits the Scottish Executive to "retain Scottish Water in public ownership and will support it with the resources necessary to invest in our public water and sewerage services so that they meet health standards".

UNISON supports this commitment that reflects the Scottish peoples rejection of profit taking from an essential public service. Mutualisation for the capital intensive Scottish water and sewage industry is simply a smokescreen for privatisation. The mutual body would in effect be owned by the financial institutions that provided (the more expensive) capital funds.

To minimise financial risk they would insist that all services be provided by private contractors as happens in Welsh Water, the model for the Tory proposal. Therefore the so-called mutual option is in reality a token representation for customers on a board overseeing a wholly privatised Scottish Water.

In addition to the disruption a second reorganisation would cause, bills would rise to pay for the profits of the English water companies who would provide the services and the more expensive private sector borrowing. The usual right wing commentators riding on the publicity generated by rising bills have made the calls for water privatisation.

Many of the claims are absurd, based on inaccurate data laced with their own ideological views. Scottish Water does have a number of problems including: " Unrealistic efficiency targets both in the scale of the cuts they impose and the speed in which they are to be achieved. Resulting in massive job losses which will undermine safety and customer service.

Scottish Water is being given four years to make structural changes that took twelve years in England.

  • Bills that are rising faster than necessary due to the structure of water charges proposed by the Water Industry Commissioner (WIC) including:
  • Harmonisation introduced in one year instead of phasing the changes over a number of years.
  • Increasing the fixed charge element again without sufficient phasing. " The surface water drainage water charge.
  • Bills that will continue to rise after 2006 because the WIC insists on funding investment from customer charges. Sensible organisations spread long term investment costs.
  • Unfair (and often inaccurate) comparisons with England. Scotland has an entirely different water and sewage infrastructure. In particular, large numbers of small water treatment plant, more sewers closer to properties and of course a massive coastline.

The English industry has also benefited from £50bn of investment over the past 13 years compared with £1bn in Scotland. Bills in England throughout the 90's were much higher in England to finance this investment even though they had the benefit of debt write off at privatisation.

Put simply, Scotland's crumbling water and sewage infrastructure needs massive investment and that is expensive. Costs that either have to be met by charges or by the general taxpayer at the expense of other public services.

There are serious problems with the current regulatory regime that need to be tackled. However, there are no easy fixes and mutualisation/privatisation is not the solution.

For further details contact:

Dave Watson
UNISON Scottish Organiser (Utilities)
UNISON House, 14 West Campbell Street Glasgow G2 6RX. Tel: 0845 355 0845