Key Facts on Scottish Water

The organisation of water and waste water in Scotland is totally different to England and Wales. In Scotland the provision of water and sewage services is the responsibility of Scottish Water a nationalised, public sector organisation answerable to the Scottish Parliament.

Scottish Water replaces East of Scotland Water, North of Scotland Water and West of Scotland Water and provides water and waste water services to household and business customers across one third of the land area of Britain. Scottish Water is the 4th largest water services provider in the UK and the 12th biggest business in Scotland by turnover. It came into being in April 2002. Its first year of operation was traumatic with several major water pollution incidents, a large increase in water bills and the announcement of major redundancies. It is under considerable pressure to control costs while delivering a massive capital investment programme. Being a nationalised company and supplier of an essential commodity for life - water - it is very much in the public eye.

Scottish Water is accountable to a number of regulatory bodies. The Scottish Executive has established a Water Industry Commissioner for Scotland. Mr Alan Sutherland - the Water Industry Commissioner - is the economic and customer service regulator of Scottish Water. His primary duty is to promote the interests of all existing and potential customers and to advise the Scottish Executive about the level of water authority charges. He has taken a robust approach to water regulation suggesting that Scottish Water is considerably less efficient than the English water companies. As a consequence he has set demanding cost reduction targets. In the last two years the Scottish water industry has invested over £888 million to improve drinking water and meet higher standards for sewage treatment. A further £296 million was invested by way of PFI projects.

The water commissioner also observes that over the period since 1996 inefficient management of investment and delivery has cost Scottish customers £752 million.

The environmental regulator is the Scottish Environmental Protection Agency (SEPA) while drinking water has its own quality regulator.

The water authorities are in the middle of a £1.8 billion Quality and Standards 2 investment programme - which has meant sharply increased charges for customers. The plan covers the years 2002 to 2006). It sets out the major challenges relating to the investment needed to safeguard tap water quality and protect the environment. This investment is of course also driven by the requirement to satisfy European legislation such as the Urban Waste Water Directive. This will require a further investment beyond 2006.

Alongside this the Water Commissioner has announced further challenging efficiency targets for the water authorities. The savings are massive amounting to around 30% of current investment or 15% or revenue budgets. However Scottish Water is seen as making slow progress in delivering the required improvements. Concern is growing that Scottish Water is falling behind on the investment programme with only 10% of projects competed despite the programme being nearly at the half way stage. Further ore more than 50% of the projects have not even passed the early design stage. Responsibility for delivering the investment programme rests with Scottish Water Solutions.