Scottish Water was formed in 2002 after East, West and North of Scotland Water Authorities merged. They are now the only water and waste water services provider in Scotland, the 4th largest in the UK, covering a huge area of 79,000 square kilometres.
Scottish Water supplies approximately 5 million customers in 2.3 million households. 46,000 kilometres of water pipes and 39,000 kilometres of sewer pipes provide 2.3 billion litres of water and take away 1 billion litres of waste water every day. Water is treated at 1896 water treatment works including 1274 septic tanks, pumping stations, sludge treatment centres and reservoirs. Over 800 water samples are taken each day and 99.44% of water quality tests carried out in 2003 complied with regulations.
Under the Water Services Act (Scotland) 2005, Scottish Water had to split its operation into wholesale (Scottish Water) and retail (Business Stream) units. Formerly known as Scottish Water Business Stream and ostensibly remaining a part of Scottish Water, Business Stream is a new business working completely independent of its parent company in order to ensure fair and transparent retail practice under the rules of the new deregulated marketplace for business customers.
That's a brief history of Scottish Water in the past eight years. In the past few years there have been rumblings and mumblings about privatising Scottish Water. Last week an independent review on Scotland's budget recommended that ownership should be transferred to a 'public interest' board with powers to borrow money from banks rather than rely on taxpayer funding. This would free up the £140m a year currently earmarked for the utility.
Ministers would also get back more than £1bn already given in loans to Scottish Water, helping them to pay for the new infrastructure projects such as the £2bn new Forth Bridge which seems to be having problems already. Maybe they've been following the dreadful situation which has developed with the Edinburgh tram project.
The Independent Budget Review (IBR) last week warned that as many as 50,000 jobs would have to be axed in the public sector over the next four years to cope with what it described as the biggest crisis in public spending since WW2. One of the key areas under strain is Scotland's capital budget - which pays for infrastructure work.
The panel said they were aware of 'strongly held public views' that the service should not be privatised'.
John Swinney, the Finance Secretary, said he believed Scottish Water - which was performing extremely well - should remain under public ownership, yet he was careful not to rule out the not-for-profit option as he did for other of the budget review's recommendations, such as that ministers should reconsider their decision to 'ring-fence' the NHS from cuts and their commitment to free personal care for the elderly and concessionary travel. He has invited opposition parties to talks on the budget review.
The main finance problem we have in Scotland is that we don't have borrowing powers. To create an arms length company to manage Scottish Water will be a disaster for customers. Glasgow City Council tried this on a much smaller scale and it has been spectacularly unsuccessful. Our water should stay in public ownership. It is forecast there will be a world shortage of water and we must hold onto this utility for bargaining purposes. Since gas and electricity have been privatised consumers have borne excessive price rises while companies have made excessive profits.
Scottish Water should stay under government control, although with a change of management because the present management has not been efficient, but I do think it's inevitable it will be sold in the near future. Our water could be an excellent campaigning issue for the SNP. Will they realise that?
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