Putting the 'Public' back into Scottish Water

Scottish Water is a public corporation, accountable to Scottish Ministers and parliament. It was created in 2002 by a merger of three regional water authorities. This contrasts with the privatised service in England, which has seen high charges and massive payouts to shareholders and executives - not to mention running out of water. Scottish Water's average household charge is £1 a day lower than the average for England and Wales, despite having higher costs due to geography and structure.

This public service status needs restating because Scottish Water does not always act as a public service.

Scottish Water bosses have a nasty habit, internally at least, of referring to ‘The Company'. This is not only factually inaccurate but reflects a culture and a desire (from some board members and senior staff) to become one. Efforts to privatise Scottish Water are rarely far from the surface. Commercial interests lobby for it and political support is not entrenched as various back door attempts have been made over the years. At times, only the inability to recoup the capital investment in the sale price, which in any case would probably go to the Treasury, has kept the service in public ownership. If Scottish Water were a company its balance sheet and gearing would make it an attractive takeover prospect.

Then we have executive remuneration. The 2017/18 accounts state that the Chief Executive received £92,000 in bonus payments on top of his £256,000 salary. The Chief Operating Officer got a £67,000 bonus to supplement his £186,000 salary, while the Finance Director took home £66,000. The £225,000 in bonuses amounted to a near 7% rise on the top up payments enjoyed by the same three individuals twelve months earlier. The Scottish Government scrapped bonus payments in its pay policy some years ago but made an exception for Scottish Water. Needless to say, 7% pay rises are not the norm in the public sector, and senior pay is already one of the highest in Scotland's public services. 

The regulatory structure is also not appropriate for public service. Ministers set directions, but the regulatory cost system is very similar to the privatised system in England. The work of Jim Cuthbert and others have highlighted why this is not appropriate.

So, why does this matter and how would a different structure make a difference.

The Hydro Nation concept points to a much broader role for Scottish Water than only delivering water and wastewater services. Sadly, the high blown rhetoric at the launch was not translated into action act scale. A reformed Scottish Water could have a stronger international role, it could develop more significant economic spin-offs from our abundant water supply and expertise, support public health and have a more prominent role in renewable energy. It could also stop outsourcing critical services, developing in-house capability in Scotland as part of a broader industrial strategy.

The current governance structure would need to be changed. There are several options the simplest of which would be to create a Water Agency with a much broader remit, of which the utility function would be only one element. Under this structure, the regulatory role of the Water Industry Commission could be abolished with a considerable saving (£3.5m plus the mirror costs in Scottish Water). This approach would also eliminate the role of the Competition Commission and liberate its function back to Scotland. Retail competition in the non-domestic sector has resulted in few benefits, and the valuable water management role of Business Stream can continue to be delivered without so-called competition.

Another option some may argue for is a co-operative model, at least for the utility role and possibly other sub-streams. In the capital intensive water industry, any mutual body would in effect be controlled by the financial institutions. They would insist that to minimise risk to their money, services and jobs would be transferred to English and European private water companies. This is what happens at the only UK mutual model, Welsh Water. As a co-operator, if there were a viable co-operative model, I would welcome it. However, a mutual shell over a privatised industry is not a co-operative solution.

Across Europe, water services are delivered on a municipal rather than a national basis. In 2006, the STUC and water unions commissioned a paper from the University of Strathclyde and developed the ideas into a paper ‘It's Scotland's Water'. It argued for greater democratic oversight and citizen participation. Elements of this certainly could be delivered locally. Scottish Water was only created on a national basis because of the need to cross-subsidise the cost of providing services in rural areas. There are other ways of achieving this objective.

Water and wastewater services are something we take for granted. The right to water is a human right, and that right should be protected through democratic accountability. The current model of Scottish Water could be reformed to achieve much more economically with a governance structure that reflects a public sector ethos. 

More history and less economics?

“We need more historians and fewer economists”. 

This was the somewhat tongue in cheek claim made by the historian Rutger Bregman in an interview with Dan Snow on his ‘History Hit’ podcast. Bregman is the historian who hit the headlines when he took the Davros elite to task over tax. He is also the author of ‘Utopia for Realists’, which argues that throughout history it is utopian visions that have driven humanity forward. His case for historians is summed up regarding the financial crash:

“I thought that we needed historians to take the stage and explain what’s going on. When I watched the crisis on TV, the only people being interviewed were economists, and these were the guys that didn’t see it coming. I thought that we needed some historians there, so I left academia,”

He has a point, although I declare an interest as a history fan, albeit one who has written a fair bit about economics. I am also the Secretary of the Keir Hardie Society that seeks not only to remember the historical figure but also to promote his ideas in a modern context.

That is precisely what a new generation of historians seek to do. Dan Snow often asks historians to give some historical context to current affairs on his podcast. It is also not an either-or choice, as some economists use historical context effectively. I have in mind Thomas Piketty (Capital in the Twenty-First Century) and Mariana Mazzucato (The Entrepreneurial State). 

This matters because as the Spanish/American philosopher George Santayana said; “Those who cannot remember the past are condemned to repeat it”. You might also argue that those who study history can successfully repeat it. For example, I can think of more than a few generals who have successfully copied Hannibal’s double envelopment tactic at the Battle of Cannae.  

I accept this trend is not always progressive. I watched David Starkey on Politics Live last week, at his pompous, arrogant worst, as he patronised a young woman panellist.

The teaching of history in our schools has come in for some criticism. Professor Tom Devine argued some years ago that pupils are leaving school with little knowledge of their nation’s past because history is being squeezed out of the curriculum. When Scottish Ministers raised this issue, some argued this was a nationalist plot to indoctrinate young people. I didn’t agree then or now. 

Many people in Scotland would benefit from a better grasp of our history. Last year I was on the Culloden battlefield when a visitor was telling his son and me that this was where the English murdered the Scots. He wasn’t too happy when I politely pointed out that we were standing on the spot in the ‘English’ line held by the Royal Scots Fusiliers, supported in the second line by the King’s Own Scottish Borderers. And don’t even start me on Braveheart, Scottish knights fighting with Edward at Bannockburn or the recent Netflix film on a well-known descendant of the Norman French de Bruis family!    

This also plays into concerns that there has been a narrowing of subject choice in Scotland’s schools. The Scottish Parliament’s Education and Skills Committee is conducting an inquiry into that very issue. Lindsay Paterson also makes a case for a broad curriculum in yesterday's Sunday Times.

This is one of the issues raised in Scottish Labour’s current education policy consultation. That paper also asks how we can develop Scotland’s working class and labour movement archives and increase access to our industrial museums?

We have a strong heritage sector in Scotland, with good museums that strengthen our understanding of the past. My encounter at Culloden might not have been necessary if the excellent revamped visitor centre had been open. But many of our battlefields are not so well preserved. Even Culloden is threatened by development, as is Prestonpans and Transport Scotland are planning to do further damage to the Killiecrankie battle site. 

Our industrial museums operate on very modest funding levels. Local government cuts have added to the pressure on local historical facilities. The People’s Palace in Glasgow was only saved after a local campaign. It has just reopened after a £350k refurbishment, but the Winter Gardens remain closed.

The Scottish Government held a consultation last year on a draft culture strategy. The responses generally support the ambition and approach while emphasising the need to support the capacity financially. Extra funding can be levered in, but stable government funding is crucial.

Neither should we be parochial. The responses emphasised the importance of an international focus. Not just in promoting Scotland's diverse cultural assets, but in enriching and renewing our culture at home through meaningful contact and exchange with cultural policy and best practice from around the world.

That is reflected in the growing popular interest in world history. The National Trust is a large membership organisation, and historical societies of all kinds are well supported. Well written popular history helps, but it also drives broader study. I am always pleasantly surprised when picking up a book in my local library on what

even I think is an obscure historical subject, to find how many times it has been borrowed.

So, while we need both economics and history, let’s think about how we can better support our history through education, museums, sites and events. Not just to remember the past, but also for what it can tell us about the issues of today.

Radical climate action needs social justice and a just transition

There is a broad consensus on the need for ambitious targets on tackling climate change, but there are some differences around the edges when it comes to taking practical action.

The Climate Change (Emissions Reduction Targets) Bill is being debated in parliament today. Timely, as the Intergovernmental Panel on Climate Change is meeting in Edinburgh. I was pleased to be able to support the rally outside parliament, which included many references to the recent inspirational protests by school pupils.

This is the First Stage debate, so parliament is only considering the general principles. These mainly revolve around how ambitious the revised targets should be. Climate change campaigners, co-ordinated by Stop Climate Chaos Scotland, supported by Labour and the Greens, want the Bill to go further. SCCS are calling for a reduction in emissions of 80% (on 1990 levels) by 2030 and net zero emissions by 2045 at the latest. They also want the new legislation to provide assurances of transparency in how public funds are spent to contribute towards emissions reductions and commit to policy change to give warm homes, cleaner travel and support for greener farming.

The Scottish Government is not opposed to this in principle. The climate change minister argues in today's Scotsman that Scotland is at the forefront of global ambition on climate change. They are awaiting next month's UK Committee on Climate Change's advice on the credibility of a 100% reduction. 

The case for taking radical action is not in dispute, except for a few climate change deniers, or the subtler delayers. Denial is, as Mary Robinson described recently, not just ignorant, but ‘malign and evil’.

As the poll published by SCCS today shows, there is broad public support for climate action. 70% of respondents support Scotland taking greater action in transport, food and homes to tackle climate change. And the concern is growing, with one in three more concerned about climate change than a year ago.

So far so good. However, there have been some differences over the measures required to deliver on climate action.

For example, the Scottish Greens tabled a motion calling for a climate emergency, which called “on the Scottish Government to recognise that the policy of maximum economic recovery of oil and gas is incompatible with addressing the climate emergency.”

I would agree that the fossil fuel industry has to recognise that some reserves will have to stay in the ground if we are to achieve the necessary reductions in carbon emissions. The problem at this stage is that it is unclear how much of the existing reserves will be needed and how quickly technological developments will allow us to achieve this. Crucially, the motion omitted any mention of a Just Transition that protects jobs. Workers in the oil and gas industry have noted the absence of a Just Transition in the renewables sector, and we certainly don't want to repeat the experience of the coal industry, which blights many communities across Scotland to this day.

That is why we need to develop a new industrial strategy based on a Green Industrial Revolution that demonstrates a credible pathway to new jobs. This is an approach that a Green and Labour MP have come together on at Westminster, with their Green New Deal Bill. A statutory Just Transition Commission in the Climate Change Bill is an essential element of that approach.

Similar considerations apply to the Workplace Parking Levy. Penalising workers who have little option but to use a car to perform their duties or get to work, before we have a functioning public transport system, is not going to persuade anyone.

In essence, we need to put the horse before the cart, not the other way around. If we don't, we risk losing the argument on climate change and fuelling a backlash. The Gilets Jaunes protests were triggered by increasing fuel prices, and they were not an isolated example. Research by Davide Natalini at the Global Sustainability Institute has recorded 44 different events worldwide.

He argues that the design and implementation of new policies need to become more inclusive. The rich can buy their way out of climate action, the poor cannot. Climate policy needs to be seen as relevant for those communities if they are to support its implementation. Cash transfers, what I would call the redistribution of wealth, needs to ensure that those who cannot shift to more sustainable and expensive options quickly are supported.

There also needs to be better communication of why these measures are required to ensure the support of communities who are likely to be most affected.

The case for radical action on climate change is undeniable. But to win support for what will be a difficult transition we need to take workers and those least able to bear the cost of change with us.