Water and wastewater reform

 Let’s talk about water and wastewater. A subject that is rarely discussed in Scotland for two main reasons. Firstly, it rains a lot, so we don’t think there is a water scarcity issue. Secondly, with a public water service, we have avoided the shambles of the privatised system in England and Wales. However, both of these assumptions are misleading.

While we are better placed in terms of water use than many countries (2 million people worldwide die annually due to water-related causes), water scarcity is a growing problem, particularly in the east of Scotland. The chart below shows that half the population will face water scarcity by 2050, with drought conditions occurring every 3 years instead of every 20. The population is rising (13% p.a.), we have large rural areas that often rely on poor private supplies, and there is growing industrial demand caused by developments, including large data centres.

In response to this, we need to use water more efficiently. Water consumption in Scotland is higher than in other European countries, partly driven by cultural assumptions about abundant water and by very limited household metering. 

Scottish Water has a big investment programme (£886m last year) to strengthen the ageing water and wastewater infrastructure. However, this is only 40 per cent of the need, so they prioritise. There is also the cost legacy of the Private Finance Initiative (£170m p.a.). New household design developments are increasing water run-off, with 2300 properties at risk of sewer flooding (up 60% by 2050). Scottish Water has limited monitoring of outflows compared with England, although progress is being made.

To reduce investment costs, we need to use water more efficiently. That includes reusing water as recommended by a World Bank report. This could save 50-80 litres of water a day in a typical household. We also need to invest in green infrastructure (green roofs, permeable pavements and retaining gardens), mandating some of these through the planning system. Modern data and computer models make this more achievable. All of this requires replacing the outdated legislation, as the EU is currently doing. The Scottish Government has consulted on this, but progress has been glacial.

That leaves reforming our current public service structure. I set out much of this in a paper for the STUC, based on research commissioned by the University of Strathclyde. This essentially involves abolishing the costly and unnecessary regulatory model, which is identical to the failed English model. As the recent scandals have highlighted, the Water Industry Commission is no longer fit for purpose, if it ever was. This model has also driven the stealth privatisation of Scottish Water, which now has 400 private contractors (2,000 staff) delivering around half the service. Some 45 per cent of wastewater treatment was privatised using PFI, and the entirely unnecessary non-household marketisation has created additional costs for businesses. 

A public service model would enable a better industrial relations approach, with a worker director and a partnership structure based on the NHS Scotland model. It is hardly surprising that Scottish Water increasingly looks like a failing English water company (with managerial bonuses to match), when most of its board comes from the privatised sector. There is also a case for greater decentralisation, including better community engagement on water solutions. 

As a country, we need to better understand the issues surrounding water and wastewater, and a Citizens’ Assembly approach might help. We may be in a better position than England and Wales, but that won’t last much longer unless we act now.

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. 

World Water Day

World Water Day, on 22 March every year, is about focusing attention on the importance of water. This year’s theme, ‘Nature for Water’, explores nature-based solutions (NBS) to the water challenges we face in the 21st century.  

Water is a human right according to the United Nations, which in 2010 declared that every man, woman and child should have access to clean drinking water and safe sanitation.  As the most precious life source the earth has to offer, without which humans cannot survive, the recognition of water’s importance to human beings as equal to their right to life and dignity goes without saying.

In Scotland, we take the provision of clean water from our taps and the safe removal of waste water for granted. Sadly, this is not the case in many parts of the world:

• 2.1 billion people lack access to safely managed drinking water services. 
• By 2050, the world’s population will have grown by an estimated 2 billion people and global water demand could be up to 30% higher than today. 
• Around 1.9 billion people live in potentially severely water-scarce areas. By 2050, this could increase to around 3 billion people. 
• 1.8 billion people use an unimproved source of drinking water with no protection against contamination from human faeces. 
• Globally, over 80% of the wastewater generated by society flows back into the environment without being treated or reused. 

This February, the European Commission published the Re-cast of the Drinking Water Directive. We have been waiting four years for this first concrete outcome of the European Citizens Initiative, following the Commission’s unambitious Communication in 2014. The proposed Directive, as the ETUC and others said at the time, is a step forward, but misses the opportunity to recognise the Human Right to Water. Now we have to mobilise allies in the European Parliament, the European Social and Economic Committee and the Committee of the Regions to push the European Union to commit to really implementing the Human Right to Water. Hopefully it will happen before Brexit, but I wouldn’t hold your breath.

In Scotland, we have the benefit of a largely public sector water service. Despite Scottish Water’s persistent reference to ‘the company’, they are in fact a public corporation. This public service delivers a quality service more cost effectively than private companies in England, despite the additional costs of managing water in Scotland. The private sector has crept into a few corners of the service through competition measures in the non-domestic market and through ruinously expensive PFI schemes. However, the core service remains in public hands. 

There is a case for greater democratic accountability and moving away from the regulation model that seeks to copy the private sector model in England and Wales. We could also do much more with water as an economic asset, something envisaged in the Hydro Nation concept. Sadly, that vision hasn’t been realised in full. I hope that is something Scottish Labour and other political parties will consider in the run up to the next Scottish Parliament election. 

The sharks are always circling around Scottish Water and we need to remain vigilant. Scotland’s water is not for sale.

Scottish Utilities and the EU

Like so many aspects of our economic life, the EU is an integral part of our energy and water systems. That's why almost everyone you meet in the industry will be voting Remain on Thursday. They are joined by most environmental campaigners, in a rare alliance. Why? Because in an interconnected world, both groups recognise that action at the level of the nation state is no longer enough.

It is not well known that the UK imports around 6% of its electricity through undersea cables linking it to the European mainland. Some of this electricity will even reach Scotland, as we increasingly rely on our interconnector with England when the wind isn't blowing. Such interconnectors would be possible outside the EU, but wouldn't be priority for other states. Being connected to Europe's energy networks is also an important element of energy security in an unstable world.

Having an EU energy policy does involve some sharing of sovereignty. Britain has had a significant influence on that policy. Admittedly not always positive, such as liberalising EU energy markets, but more positively in the shift from fossil fuels to renewables. I would argue that British sovereignty in respect of energy and climate change policy has been expanded, not diminished, by EU membership. And in the language of Brexit, they’re not “imposed” by “Brussels”. They are subject to voting and a range of checks and balances. In addition, the UK has flexibility on how policies are implemented.

Renewables and energy efficiency rely heavily on new technologies. The EU offers a larger market and harnesses economies of scale so that products are cheaper. They are also developed to similar standards and regulations, making it easier for companies to trade and create jobs.

If we vote for Brexit on Thursday the UK will either exist in an energy isolation that is both more expensive and less secure, or it will be a second-tier member of that market, bound to accept the rules made by EU members but having no influence over how they are agreed. 

There could also be an impact on energy bills. I am a bit sceptical about the suspiciously round number of £500m a year claimed by the energy secretary, but the basic premise is sound. Her claim was based on a report, commissioned by National Grid, which found that leaving the EU, and exiting the internal energy market, could cost consumers £500m or more each year. This is the equivalent of £20 per household – or about a third less when business consumption is taken into account.

The arguments against Brexit are confirmed in a survey of industry professionals by the Energy Institute. On eight out of nine issues, from supporting renewable energy to improving energy efficiency – the majority of respondents said leaving the EU but remaining in the single energy market would have a “negative” or “very negative” effect on Britain’s energy system. Supporting innovation and research was the issue for which the most respondents thought Brexit would be detrimental, followed by addressing climate change and sustainability.

Energy Institute president professor Jim Skea said: “An overwhelming majority of contributors to the Barometer foresee negative effects on the UK energy system in the event that the UK were to leave the EU. In terms of securing energy supplies, renewable energy development, climate change and sustainability, and air quality, about four times as many respondents anticipate negative effects.”

There are similar arguments in relation to water, an industry that has benefited from common regulatory standards. Those who support Brexit often point to the constraints of such regulation. This reminds me of the 'Yes Minister' sausages episode, when EU regulation demanded that sausages should actually contain some meat! Wastewater regulations that limit the pouring of raw sewage into the sea, ruining our beaches, are a definite plus for me. 

The seriousness of water-related problems is recognised in the EU, in a way that simply wasn't the case before. So is the need for better ways to manage water resources and the water environment. Heavy fines for polluters are supported. These measures and more are made possible by EU water policy. Yes, we could do these things outside the EU, but the fact is we didn't.

In summary, for Scottish utilities the EU has been largely positive and Brexit could result in lower standards, higher costs and put energy supply at risk. That's why the industry and those who watch it, support Remain.

World Water Day

Today is World Water Day. The 22nd March is designated as World Water Day by the UN to mark the importance of water and sanitation.

This year's theme is 'Better Water, Better Jobs'. 1.5 billion people work in water related sectors and nearly all jobs depend on water and those that ensure its safe delivery. Yet the millions of people who work in water are often not recognised or protected by basic labour rights. The theme in 2016 is therefore focusing on how enough quantity and quality of water can change workers' lives and livelihoods - and even transform societies and economies.

In Scotland we benefit from a public water service, unlike the rest of the U.K. Recognised trade unions ensure that basic labour rights are protected and we have a high quality water and wastewater provision, delivered at a reasonable cost.

However, we should not be complacent. The privatisers have been chipping away at Scottish Water for years.

Many of our wastewater plants were updated using the ruinously expensive Private Finance Initiative (PFI). Those plants are still managed by private water companies and even the Water Industry Commission has suggested buying them out.

Contractors have been taking over large chunks of Scottish Water. 92% of the capital programme is delivered by private contractors.

This year the Scottish Government awarded a £350m contract to Anglian Water to provide water and wastewater to the Scottish public sector. Anglian is one of a number of English water companies who are happy to take public contracts, but less enthusiastic about paying Corporation Tax.

Finally, on the horizon we have the trade agreements, CETA and TTIP. Both of these put public provision at risk, by allowing corporations to challenge democratic decisions to return services to public ownership. For example, Anglian Water is part owned by Canadian pension funds.

The EPSU was going to press their enormously successful European Citizens Initiative 'Right2Water' today. It calls on EU institutions and Member States to ensure that all citizens enjoy this right, that water supply and management be excluded from “internal market rules” and commercialisation, and that the EU increase its efforts to achieve universal access to water and sanitation. Despite huge support for the Right2Water movement, the European Commission has failed to act. An unambitious Communication released by the Commission in 2014 has been followed by two years of silence and no concrete legislation.

The tragic events in Brussels meant today's event was called off, but the campaign goes on.

World Water Day is an opportunity for us to remember that the clean water and sanitation we take for granted is not available world wide. We should celebrate our public provision, but remain vigilant. The privatisation sharks have not gone away.

Why CETA has implications for Scottish Water

The CETA trade agreement could lock in water privatisation in England and have implications for Scottish Water.

The Council of Canadians has warned that if the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) were ratified, it would pose a serious obstacle to the remunicipalisation of privatised water services in England. That's because the Ontario Teachers' Pension Plan owns 27 per cent of Northumbrian Water Group Plc, which sells its water services to about 4.4 million 'customers' in England, and the Canada Pension Plan owns one-third of Anglian Water Services, which sells water services to approximately six million people in England.

The pension funds could use the investor-state dispute settlement (ISDS) provision in CETA to sue for future profits should the water utilities be brought back into public hands by a future government.

There is a certain irony here as Scottish Water International has recently won a second contract to advise the Canadian city of Calgary on its water supply. We export public service water expertise to Canada, they export privatisation back!

The Scottish Parliament's European and External Relations Committee is currently holding an inquiry into CETA and the EU Commission will be giving evidence to the committee on 4 February. While Scottish Water is a public service, many of its services are delivered by the private sector. As Utilities Scotland previously highlighted, almost all the capital programme is delivered by contractors and a number of wastewater plants are run by contractors under PFI schemes.

In addition, the Scottish Government recently handed a contract for public sector water and wastewater services to Anglian Water - who are part owned by Canadian pension funds. This opens the possibility of a future Scottish Government being sued under the ISDS process if they sought to bring all of Scottish Water back into public ownership.

This isn't a theoretical risk. In 1999, Azurix, a subsidiary of Enron Corporation, sued the Argentinian government after water supply failures led to a consumer boycott . A 2007 ICSID [International Centre for Settlement of Investment Disputes] tribunal found in favour of the company and ordered the government of Argentina to pay $165 million in compensation. In 2010 the ICSID again ruled in favour of a water company, in a dispute involving the French transnational Suez. This time it was the Argentine government that rescinded the contract, because of concerns over water quality, lack of wastewater treatment, and mounting tariffs.

If TTIP was agreed we would have a whole new batch of problems with US firms getting in on the act. The Flint River crisis highlights the risks of privatised water supply. The decision to switch the Michigan city’s drinking water source to the Flint River was aimed at saving $5m, but almost two years later the cost to treat the water supply carries a tag of $45m together with concerns over lead poisoning and contamination. President Obama cited Flint’s water crisis as an example of why the government’s role in public safety is so crucial, He said; “It is a reminder of why you can’t shortchange basic services that we provide to our people and that we, together, provide as a government to assure the health and safety of the American public is preserved".

As Food & Water Europe has highlighted; "TTIP, CETA and TISA all pose major threats to many of the victories that civil society has achieved over the decades to make the human right to water a reality and to promote and recover public control over water management. ...[Trade agreements] can make privatisation processes iron-clad. Investment protection mechanisms would allow corporations to challenge processes of water remunicipalisation, the powerful wave of local governments taking back public control over water, like in Paris and Berlin."

Much of the focus in campaigns against TTIP and CETA have been on the NHS. Let's not forget that our public water supply is equally at risk.

 

Scotland's public sector water contract privatised. Confused? You should be!

A £350m contract to provide water and wastewater to Scotland’s public sector has been awarded to a privatised utility firm in East Anglia. Confused?

Scotland has a public water corporation, Scottish Water that is 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.

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.

The market was created by the Water Services etc. (Scotland) Act 2005. The then Labour led administration was persuaded that this was the least they could get away with due to the provisions of the UK Competition Act 1998. The 2005 Act prohibited common carriage and household competition and put a licensing regime in place for non-domestic competition. UNISON Scotland opposed the legislation and would argue that it has simply created an unnecessary bureaucracy. The claimed savings are almost entirely down to water efficiency measures that do not require competition to implement.

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. It could be argued that this was not the best way to organise this tender.

It appears that Anglian Water has submitted the lowest price bid in an evaluation that was 50/50 price and quality. The Scottish Government is not obliged to accept the lowest bid, but it would have to have a good reason for not doing so under the utilities procurement regulations. In fairness, the Scottish Government had few options because the system of retail water competition is the ultimate in market madness. £350m will be paid to Anglian Water in Huntingdon, only for most of that money to be repaid to Scottish Water in wholesale charges. The cost of this crazy system is picked up by the taxpayer. However, it was unwise to include savings from water efficiency measures that should be undertaken anyway to spin out the alleged benefits of the contract.

It would also be interesting to know if the evaluation panel took into consideration the risk that this bid was a loss leader to give Anglian Water a base in Scotland. This is important because contractors who do this squeeze a margin post-contract from quality.

The direct job implications are not likely to be huge, but significant for those impacted. Competition only covers the customer facing services i.e. call centre, customer service and transactional staff within Business Stream.

This procurement also highlights the importance of addressing tax dodging in procurement, an issue UNISON and other civil society organisations campaigned for during the passage of the Procurement Act. There should be pre-qualification disclosure of company taxation policies and public bodies should be able to evaluate a tender on the basis of which company pays tax or not. Assessment of bids could make use of the Fair Tax Mark.

The significance with this contract is that Anglian is one of a number of private water companies who are happy to take taxpayer funded public contracts, but less happy to pay corporation tax. A consortium called Osprey, made up of asset and pension managers in Canada and Australia, owns Anglian Water. Corporate Watch reported that Anglian paid £151 million to its private owners, but just £1 million in tax in 2012, after an operating profit of £363 million. It avoids millions in tax by routing profits through tax havens by way of taking on high-interest loans from their owners through the Channel Islands stock exchange.

Anglian Water was described as a “significant repeat offender” in an Environment Agency report on polluters and was fined for polluting five years in a row. Friends of the Earth said of the company: “Clearly, this company is a classic example of a company which sees pollution fines as a legitimate business expense and doesn't care about the environment”. It would be interesting to know just how much weight the evaluation panel gave to this in their quality weighting.

Non-domestic competition is not the only area of privatisation within Scottish Water. 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.

Scottish Water works well, is good value for money and water customers support the corporation staying in the public sector. While there were limited options for the Scottish Government on this occasion, we should be aware of the pressures for privatisation and the lessons to be learned for future procurement.

 

Water is returning to public service delivery

Water privatisation is in retreat. Water and wastewater is returning to local authority ownership across the world.

The Public Services International Research Unit (PSIRU), Multinational Observatory, Municipal Services Project (MSP) and European Federation of Public Service Unions (EPSU) have released new research on the growing wave of cities worldwide that are taking previously privatised water supply and sanitation services back under public control, in a process called remunicipalisation.

Over the last 15 years, 235 cases of water remunicipalisation have been recorded in 37 countries, impacting on more than 100 million people. Moreover the pace of remunicipalisation is accelerating dramatically, doubling in the 2010-2015 period compared with 2000-2010.

After huge problems in the developing world, private companies have been shifting their efforts to the developed world. It is therefore interesting that recent remunicipalisation is concentrated in high-income countries, with 184 cases compared to 51 in low- and middle-income countries. The great majority have taken place in two countries: France (94), home of two of the world’s private water companies, Suez and Veolia, and the United States (58).

Transnational Institute water expert Satoko Kishimoto said: "This report shows that water privatisation, which has been promoted so heavily in recent years, is increasingly being rejected by cities worldwide after years of failed promises, poor services and high prices. The pendulum is swinging back in favour of public water, because of the strong evidence that remunicipalisation brings immediate cost savings, operational effectiveness, increased investment, higher levels of transparency and accountability."

The former Deputy Mayor of Paris Anne Le Strat, who was behind the flagship 2010 remunicipalisation of water in the French capital added; "Moreover, public water operators are now joining forces within and across countries to support and learn from each other so we can achieve the human right to water for all."

The book Our public water future: The global experience with remunicipalisation comes out as global leaders are gathering for the World Water Forum, which is dominated by private water operators and has been a key proponent of water privatisation in recent years.

The delivery of clean water and sanitation also has to be seen the context of a global water crisis with supplies running dry at an alarming rate. The world’s population continues to soar but that rise in numbers has not been matched by an accompanying increase in supplies of fresh water.

The consequences are proving to be profound. Across the globe, reports reveal huge areas in crisis today as reservoirs and aquifers dry up. More than a billion individuals, one in seven people on the planet, now lack access to safe drinking water.

We should therefore be doubly grateful that we live in a wet country with a public water service. And we want to keep it that way. Well, the public service bit at least!

 

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.

 

 

Remember the Hydro Boys

On Thursday this week, the Scottish Parliament will debate a motion from Annabelle Ewing MSP that remembers the contribution of the workers, many displaced persons from post-war Europe, who built our hydro power system.

S4M-10672# Annabelle Ewing: Remembering the Contribution of Those who Built the Dams and Tunnels—That the Parliament notes plans by Scottish and Southern Energy to develop a new state-of-the-art visitor centre at Pitlochry Dam and salmon ladder; recognises the contribution that this and other hydroelectric dams and tunnels throughout Scotland can make as tourist attractions as well as their primary function contributing to Scotland’s renewable electricity generation; respects the contribution made by the men, of many nationalities, who built the dams and tunnels, such as the Lednock "Tunnel Tigers", who set a world record by tunnelling 557 feet in seven days in 1955 while working on the St Fillans section of the Breadalbane Hydro-Electric scheme; further recognises that this was hard, dangerous work and that a number of men lost their lives and countless others experienced injury or illness that affected them for the rest of their lives; understands that some of the public visitor information boards list several nationalities of workers in the tunnels but make no reference to Irish workers, and looks forward to the new visitor centre properly reflecting the contributions of all of the men who built the dams and tunnels.

When most people remember the building of Scotland’s hydro schemes, they think of the vision of Tom Johnston who got the projects going, despite political and landowner opposition. However, it’s also a story about people, many of whom paid the price with their lives. Emma Wood’s book ‘The Hydro Boys’ tells the story well. I covered this in a blog post in 2011 in the context of immigration in the Highlands and cuts in HSe inspections.

In this week's debate we should not forget the human sacrifice of those who built the hydro schemes that serve us to this day.

 

 

Posted with Blogsy

The sharks are circling Scottish Water

Scottish Water is a public corporation that delivers a publicly owned water and sewerage service to the people of Scotland, unlike the privatised service in the rest of the UK. It's a model that has served Scotland well, delivering clean fresh Scottish water to homes and businesses and removing sewage along some 60,000 miles of pipes. Despite our challenging geography the average Scottish water bill is lower than the average bill in England and Wales.

Scottish Water has delivered a massive capital programme to update our aging infrastructure. It spends just under £500m a year on infrastructure including pipes and treatment works, funded largely by the water charge payer with borrowing support from the Scottish Government.

While Scottish Water is a public service there has been an incremental drift towards privatisation. Firstly, through hugely expensive PFI schemes that even the pro-privatisation Water Industry Commission (WIC) has criticised as being poor value for money. This has been followed by a broader PPP scheme, Scottish Water Solutions and the extensive contractorisation of Scottish Water.

The insider web site ‘Utilities Scotland’ has submitted FoI requests to ascertain the extent of privatisation in the delivery of the capital programme. The table below sets out the capital programme for each of the last five years and the proportion by value that is delivered by Scottish Water and external contractors.

This table shows that in the last four years for which figures are available, 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.

Scottish Water likes to claim that over 85% of Scottish Water’s supplier spend is with organisations who have locations in Scotland. They also say that the delivery of the capital expenditure has involved a total of 135 framework contractors – 106 being Scottish based and 29 being UK based, “helping to support jobs in the Scottish economy”.

Utilities Scotland sought to test this claim by asking Scottish Water to break down the amounts spent into companies headquartered in Scotland, rest of the UK or outwith the UK. This is important because ‘locations’ doesn’t necessarily mean Scottish companies or even Scottish jobs. It could simply mean a depot for a particular project. The number of ‘framework contractors’ is also fairly meaningless without knowing the value of the contracts. Lots of small value local contracts, or extensive sub-contracting could skew the significance of this statistic.

It hasn’t been possible to test these claims of Scottish jobs because Scottish Water says they do not hold the information on headquarters, they only record whether contractors have a Scottish or UK base.

Scottish Water has benefitted from a fairly stable political environment for a number of years. The SNP, Scottish Labour and the Greens have supported public ownership with only the Conservatives and Liberal Democrats making the case for privatisation. However, it is perhaps surprising that the White Paper ‘Scotland’s Future’, has no mention of a commitment to a public water service should Scotland vote for independence in September. Given current SNP policy, it would be helpful if the Scottish Government gave some reassurance that this is simply an omission.

The reaction of the European Commission to the citizen’s initiative, ‘Right to Water’, falls short of what 1.9 million people across Europe asked for. In particular, there is no proposal for legislation recognising the human right to water. The Commission has also not committed to explicitly exclude these services from the trade negotiations such as the Transatlantic Trade and Investment Partnership (TTIP) in their Communication. This could also have implications for Scotland’s public service model.

Scottish Water is a public sector success story, but we are only too aware that there is a powerful lobby for privatisation. The gradual drip of privatisation has reached epic proportions in these disclosures about the capital programme. The privatisation sharks are still circling Scottish Water and Scotland needs to remain vigilant.