Early start this morning to do an interview on the BBC responding to the latest report calling for the privatisation of Scottish Water. Actually not really a new report but a retread of a report published a few years ago by the same consultant - nothing new there then!
The core argument is that because of the financial crisis the Scottish Government can no longer afford the small borrowing line it provides to Scottish Water. It could be spent elsewhere on ‘front line’ services. Since when is providing quality water supplies and removing sewage not a front line service?
The options they claim, not surprisingly, all involve privatisation.
The first option is more PFI. Well Scottish Water gave up on PFI some 12 years ago for good reasons - because it costs a fortune. Even the pro-privatisation Water Industry Commission has stated that the schemes are not cost effective.
Then we have privatisation/mutualisation. In this option we would sell off assets built up over many years, at taxpayers expense, at a knock down price. Add to that dividends, profits, fat cat salaries and consultancy fees - all to be funded by the water charge payer. Ask any fan of Manchester Utd if they think bringing in a new debt laden owner is a good business model!
This report also claims that the regulation of Scottish Water is a model for the rest of the public sector. Sorry, I thought it was such a failure you wanted to privatise it?
The problem with this argument is that the efficiencies in Scottish Water have been driven by a massive capital programme. Not an option that is likely to be available in the coming years. And even if it was most public services rely on people. You can't deliver home care by telemetry.
Even this report recognises that Scottish Water is a public sector success story. So why wreck it? The reason is that the usual suspects just hate a successful public sector model. It goes against their dogma - it doesn't fit the ideology.
Be prepared for more nonsense like this in the coming months as the financial crisis is used as an excuse to promote privatisation.
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