Public water contract - ultimate in market madness

Paying a privatised English water company to provide Scottish public water to Scotland’s public services has to be the ultimate in market madness.

An article in yesterday’s Sunday Times reports that the Scottish Government is about to award a massive contract to provide water and waste water services for most of Scotland’s public bodies to Anglian Water, which is based in Huntingdon.

If you thought we had a public water service in Scotland, you might be a bit confused at this stage. Well we do, but it’s looking a bit frayed at the edges.

Scottish Water is a public corporation (even if it often wrongly calls itself a ‘company’) accountable to Scottish Ministers and the Scottish Parliament. Scottish Water is responsible for the provision of water and waste water services to almost all domestic and non-domestic properties and for maintaining the public system. There are some small scale private water supplies, largely in rural areas.

However, there is competition in the provision of customer-facing activities such as billing, charge collection, meter-reading and complaints handling for non-domestic customers in Scotland. This means that Scottish Water levies a wholesale charge on licensed retailers for non-domestic customers. Licensed retailers can agree their own charges with customers, subject to them being no higher than a default tariff set by the Water Industry Commission Scotland (WICS). Scottish Water is also a retailer, through its own retail arm Business Stream, which provides a service to the vast majority of non-domestic customers in Scotland.

As the public bodies are non-domestic customers they come under this system of retail competition and the Scottish Government, actually the then Infrastructure Secretary Nicola Sturgeon, put one big contract for public bodies out to tender last August.

The driving enthusiasm for non-domestic competition was the WICS CEO – a well known supporter of privatisation. So keen that he promoted the scheme’s extension to England and Wales.  UNISON has always argued that this arrangement is an expensive waste of effort. The WICS claims it has resulted in savings, but in practice these savings are all about water efficiency, not marginal differences in billing systems.

Non-domestic competition is not the only area of privatisation. Last year the insider web site ‘Utilities Scotland’ submitted FoI requests to ascertain the extent of privatisation in the delivery of the water and waste water capital programme. In the last four years, 92.5% of Scottish Water’s capital programme has been delivered by private contractors, 7.5% by Scottish Water staff. By any standard that is substantial privatisation. This is on top of PFI schemes run by a variety of privatised water companies.

We are also concerned about the impact the Transatlantic Trade and Investment Partnership (TTIP) could have for Scotland’s public service model. The greater the privatisation, the easier it will be for overseas corporate interests to challenge our public water system.

There is a certain historical irony in the Scottish Government exporting Scottish jobs to Huntingdon. The Earldom of Huntingdon was held by Scottish kings, most famously by David 1 in the 12^th century. He used the revenues to build several abbeys in Scotland and generally spruce up public buildings. On the other hand, Oliver Cromwell came from Huntingdon and he knocked down quite a few public buildings in Scotland. Also, a later Lord Huntingdon was a custodian of Mary, Queen of Scots – that didn’t end well either!

Scottish Water is a public sector success story, but we are only too aware that there is a powerful lobby for privatisation. As I said in yesterday’s Sunday Times, the gradual drip of privatisation will have reached a new high if this contract is awarded to Anglian Water. The privatisation sharks are still circling Scottish Water and we need to remain vigilant.