Press Releases 2007

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News Release 07/2007 - Water watchdog warns of slow start to Scottish Water's investment programme

25 October 2007

Scottish Water has made a slow start in 2006-07 in delivering the capital investment programme to meet objectives for the water industry set by the Scottish Government, according to a report published today by the Water Industry Commission for Scotland.

This report focuses on Scottish Water’s performance in delivering the outputs, which will bring better service for customers, improve drinking water quality, and provide cleaner beaches and rivers. These outputs are decided by Ministers and paid for by customers.

In 2006-07, Scottish Water invested only £413 million. This is much less (£127 million) than was allowed for in customers’ bills and less even than Scottish Water had forecast in its May 2006 delivery plan (by £37 million). The Commission is concerned that the lack of progress during 2006-07 (the first year of an investment programme that runs until 2010) may mean that benefits paid for by customers are delayed.

The delay is particularly worrying because Scottish Water is tasked with delivering a very large investment programme – the largest programme being undertaken by any water company in Great Britain.

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

“Customers will be concerned at the slow start of the investment programme that they are financing through their water bills. And we must ensure that they do not pay twice for it.”

NOTES TO EDITORS

  1. A copy of the Investment Report 2006-07 is available at www.watercommission.co.uk

  2. Investment in maintaining and improving the assets to provide water and sewerage services accounts for around half of the money that Scottish Water spends.

  3. The Commission monitors and reports on delivery of the investment as part of the ‘Output Monitoring Group’. The group, which is chaired by the Scottish Executive, includes representatives from Scottish Water, the Scottish Environment Protection Agency, the Drinking Water Quality Regulator, Waterwatch Scotland and the Commission.

  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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