Press Releases 2007

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News Release 09/2007 - Scottish Water's lower costs bring substantial savings for customers, say water watchdog

08 November 2007

Scottish Water has made excellent progress in reducing its day-to-day running costs, according to a report published today by the Water Industry Commission for Scotland. It has reduced its operating costs for five years in a row. Customers are saving more than £3 million a week, and their bills now compare well with those for customers in England and Wales.

Scottish Water has not cut its operating costs by cutting corners. At the same time as reducing costs, it has improved the level of service to customers. However, there is still scope for Scottish Water to make further service improvements, while maintaining a tight control on costs.

Speaking today Sir Ian Byatt, Chairman of the Commission, said:

“I am delighted that Scottish Water is continuing to reduce its operating costs while improving its service to customers.”

The report notes that the prospects for future bills in Scotland are also good, as Scottish Water continues to meet – and beat – the Commission’s expectations of improved efficiency. Scottish Water’s outperformance is an early indication that the clear incentive framework that is in place to regulate the water industry is serving the interests of customers well.

NOTES TO EDITORS

  1. A copy of the Costs and Performance Report 2006-07 is available at www.watercommission.co.uk. Reports covering Scottish Water’s investment and customer service performance in 2006-07 are also available on the website.
  2. Scottish Water’s annual running costs were £268 million in 2007 (compared with £438 million in 2002). This is around 5% better than our expectations.
  3. The Commission measures customer service performance using the ‘overall performance assessment’ index. Scottish Water’s OPA score increased from 133 in 2002 to 232 in 2007.
  4. The Water Industry Commission was appointed in July 2005, under the Water Services etc. (Scotland) Act. Its members are Sir Ian Byatt, formerly Deputy Chief Economic Adviser at the Treasury and Director General of Water Services in England and Wales; Professor John K Banyard OBE, former Director of Asset Management at Severn Trent Water; Dr Mike Brooker, formerly Managing Director of Dwr Cymru; Mr Charles Coulthard, Chair of the Gas and Electricity Consumers Council in Scotland and formerly Managing Director of Ofgem in Scotland; Professor David Simpson, formerly economic adviser to Standard Life; and Mr Alan Sutherland, Chief Executive, formerly Water Industry Commissioner for Scotland.
  5. The Commission’s statutory duty is to determine price limits for Scottish Water based on the lowest reasonable cost of achieving ministerial objectives for the water industry. In November 2005, the Commission determined price limits for water and sewerage services for the regulatory control period 2006-07 to 2009-10. A document setting out the Commission’s full determination is available at www.watercommission.co.uk.


For further information please call Katherine Russell, Director of Corporate Affairs, on 01786 430200.
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