Proposed Scottish Water sell off

It is becoming increasingly evident that the Scottish Government is no longer averse to selling off Scottish Water, with the pressure of cuts here and coming.

The government has been shadow-boxing on this for some time, claiming that it has no intention of selling the company as rumours to the contrary have gathered strength.

In recent days it has become known that the Scottish Futures Trust is proposing a part-privatisation of Scottish Water, for £3.5 billion.

Scottish Water itself is manifestly keen on the idea – there is always money to be made for managers in such deals.

Tonight its Chair, the deeply unimpressive Professor Alan Alexander, has been on television , intending to soften up public opinion and uttering the most inane reassurances – that what matters is management not ownership.

Management is certainly what is wrong with Scottish Water – but ownership is all. It is intellectually blinkered, lazy and disingenuous to suggest that there cannot be both ownership and good management in the public sector.

There must be both.

The challenge for the Scottish Government is not how to sell the easy option of privatisation to a suspicious and largely hostile public.

Its challenge is to create a template for well managed, cost-efficient and well scrutinised pubic sector businesses, operating with accountability to government and electorate.

If there is no will to meet this challenge – and poor management, along with constipation and wax in the ears, is a very British disease – then other ways must be found to stop the financial drain of Scottish water, short of selling what is arguably the most vital resource of all.

The leasing option

When he was Environment Minister, the current Education Secretary Michael Russell, proposed the leasing to private forestry interests of 25% of Scotland’s forest estate for a period of 75 years.

If the current government has neither the skills nor the will to reshape Scottish Water as a well managed and cost-efficient public sector organisation, why not look at an appropriate version of Mr Russell’s forest leasing scheme for water?

If we have been unduly  harsh with Professor Alan Alexander for his unqualified statement that ownership is far less important than management – then private sector interests, similarly more concerned with management than ownership, could see an advantage in a well structured deal of this kind, with Scotland’s continuing ownership of its vital water resources assured.

Any water leasing scheme would have to have a series of inbuilt straetegic safeguards, for example:

  • against selling water outside Scotland for increased profit in times of scarcity. Any external sales – and contracts for such sales- would first have to be formally approved by the Scottish Government of the day.
  • setting a spectrum within which profit margins would operate and describing the criteria to govern movement towards either end of the spectrum
  • establishing a rubric for required maintenance and infrastructural investment
  • specifying the circumstances and penalties attaching to any early handing back of the lease
  • identifying and specifying the circumstances in which the Government of the day would be required to terminate the lease.

The politics of water

It is accepted that future wars will be fought over water as global warming exacts its toll.

The SNP is said to be considering reviving the war-cry of ‘Scotland’s Oil’. If, in government, the Scottish National Party sells off a fundamental national resource now even more valuable for the future than is oil, ‘Scotland’s water’ will be the giveaway that will seal its defeat and taint its memory.

Against such an action,  any attempt to shout ‘Scotland’s Oil’ will be risible and will be met with the counter-cry of ‘Scotland’s Water’.

One thing is certain. If the SNP administration sells off Scotland’s water, the coming political cost in Argyll of the Dunoon-Gourock ferry service to be, will be a mild rebuke compared to the electoral damage the party will sustain across Scotland.

We have been generally supportive of the current Scottish Government – for good reason. It has largely been an effective, engaged, go-ahead, hardworking and honourable government and, as such, it has raised Scotland’s expectations of independent thinking and capability in devolved administrations.

But if this government privatises Scotland’s water, we will campaign vigorously against it in the 2011 elections.

Money is here today, gone tomorrow and even the best government wastes it on mistakes and foolish schemes.

If we do not own and control our own water we are – literally – toast.

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Related Articles & Comments

  • Whilst it is absolutely true that attracting private investment into Scottish Water is desirable there is no hint of changing its ownership, the SNP has always been firmly committed to SW remaining in public ownership. Vested interest may float stories from time to time but as someone in touch with both Ministers and the grass roots of the Party I am absolutely clear that the thought of privatising Scottish Water is counter intuitive to us. I share For Argyll’s aversion to the mere suggestion!

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    Ron Simon July 23, 2010 10:40 am Reply
  • Sign upto the Facebook page Say No To Privatisation of Scottish Water http://www.facebook.com/group.php?gid=146442512035878&v=wall

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    Alisdair MacLennan July 23, 2010 3:00 pm Reply

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