Let's look at the facts when debating the water white paper

It is disappointing to see that the debate about the forthcoming Water White Paper takes little, if any, account of the facts that are available. I recently bemoaned this issue in a Soap Box piece for Utility Week. It is probably just as well there was a 650 word limit!

There is no question that Scottish Water’s Business Stream has reduced its costs considerably and that the level of service is not just much improved, but, perhaps even more importantly, is much more tailored to customers’ needs.

I have looked carefully at purported analyses of the likely costs, benefits and risks of implementing a wholesale and retail split. Some use old data (or rather ex ante estimates) long since superseded by actual experience. Others appear to have misunderstood the cost/benefit analysis that supported Martin Cave’s excellent advice to Government.

We intend shortly to publish a definitive assessment of the costs incurred in Scotland. Each number in the analysis will be linked to the reported information in either regulatory or statutory information. The analysis should therefore be able to be replicated by anyone interested in what actually happened in Scotland.

Second, we will publish a paper on the lessons that we learned from having implemented the wholesale/retail split.

And finally, we are planning an analysis of how the split of retail activities actually helps deliver environmental benefits to us all.

 

Comments

At 3/15/2011 1:08:44 PM, peter nelson wrote:

Domestic Water Meters in Scotland and the discriminatiom intrenched in Scottish Water.  I have just compared the total costs of receiving the domestic service in all of it's complexity direct from Scottish Water via the Council Tax (Band D) and receiving the same service via a water meter. As I understand it the purpuse of a water meter is to pay as you go and to encourage the reduction of water usage and therefore reduce household costs.  The Council tax supply route is fixed at (Band D)is presently £393.57p for an unlimited supply. The cost of a supply of just 25 cubic meters of fresh water per year via a meter works out at £479.94p plus the statutary survey fee and installation costs of up to £1000.

Where is the justfication in the difference?  Telephone enquiries with Scottish Water confirm that they have to offer the option of water meters but on the other hand actively put customers off by informing them that their charges are much higher for domestic meter use!
I also note that having a Meter means paying more for the water and waste collection etc
I ask the question, is Scottish Water really operating for the benifit of the Scottish householder or is it a financially unstainable Institution having to operate a monopoly to survive in a non competitve environment?

At 3/18/2011 5:06:01 PM, billy_murdoch wrote:

That is a great example I wish I had used it.  However I calculate that the bill for 25m3 in Scotland would be £501.8 and I think that an average installation cost would be £1000 you will also be charged a survey fee of £81.90 whether you go ahead or not. If you were to purchase the same 25m3 from Thames Water the total cost ( water and waste charges ) would be £114.00 and installation of the meter would be free. Take a look at the Customer Forum part of Alan's Blog. You will see that I have included a table ( corrupted in pasting I am afraid ) which benchmarks Scottish Water against Thames Water and Yorkshire Water. If you can't make sense of it you can easily get the prices from Thames Water and Yorkshire Water websites. I am waiting for a response to my last comment. I am hoping Alan will explain how the Scottish Water detailed metering charges have been arrived at. Justifying the difference between Scotland and England and Wales might be a bit of a challenge.

About Alan

Alan Sutherland

I’ve been Chief Executive of the Water Industry Commission for Scotland since its establishment in July 2005. Prior to that I was the Water Industry Commissioner for Scotland having been appointed to that role by Scottish Ministers in November 1999. In 1998 and 1999 I was a managing director of Wolverine CIS Ltd, a division of Wolverine World Wide. Prior to that I worked in strategic consultancy with Bain and Company and in the investment banking industry with Robert Fleming and Company.