Scottish Water

Parent Company:         Scottish Government

Regulated utility:           Scottish Water Ltd

Ownership:                     Public sector

The organisation of water and waste water in Scotland is totally different to England and Wales. In Scotland the provision of water and sewage services is the responsibility of Scottish Water a nationalised, public sector organisation answerable to the Scottish Parliament.

Scottish Water replaced East of Scotland Water, North of Scotland Water and West of Scotland Water and provides water and waste water services to household and business customers across one third of the land area of Britain. Scottish Water is the 4th largest water services provider in the UK and the 12th biggest business in Scotland by turnover. It came into being in April 2002.

It had a 'rocky' start as it was under considerable pressure to control costs while delivering a massive capital investment programme. At its formation Scottish Water was seen as being very cost inefficient and a long way behind the English water companies. Being a nationalised company and supplier of an essential commodity for life - water - it was and is very much in the public eye.

Now eight years on performance has significantly improved with massive capital investment delivered (2.4 billion in the period 2006-10) and service significantly improved to its best ever. The company is much more efficient with costs down by over 40% and performance matching the rest of Britain's water companies. In 2008 Richard Ackroyd (ex Yorkshire Water) took over as Chief Executive with the aim of continuing the rapid progress that Scottish Water has made.

Scottish Water is accountable to a number of regulatory bodies. Scottish Ministers appoint the Chair and Non-executive Directors. The economic regulator is the Water Industry Commission for Scotland (WICS). This is a non-departmental public body with statutory responsibilities. It has a small team of only around 25 people and acts independently of Ministers. It is similar to Ofwat but works on a four year rather than five year review cycle.

The environmental regulator is the Scottish Environmental Protection Agency (SEPA) while drinking water has its own quality regulator. Waterwatch Scotland represents the views of customers.

Scottish Water delivers its capital investment programme partially via an in-house capital delivery team and via a Joint Venture called Scottish Water Solutions 2. This JV is between Scottish Water and the Thistle Water consortium comprising Jacobs UK Ltd, Laing O'Rourke Infrastructure Ltd and Veolia Water UK plc.

In the current period (2010-2014) Scottish Water has to deliver over £2.5 bn of capital investment in maintaining assets and improving environmental performance. Two issues are particularly important, reducing leakage by a third by 2014 and reducing rain and ground water seepage into its overloaded sewer systems.