Date: 30 June 2005

'Magic circle' of investment without charge increases means increased threat to water safety

UNISON, the union that represents Scottish Water staff, today reacted with anger and concern over what they termed a 'magic circle' of increased investment with little or no charge increases.

Dave Watson, UNISON's Scottish Organiser for Utilities said, "Scotland's Water Industry is caught in a vice between Ministers who want massive investment, without the political inconvenience of charge increases, and a regulator wedded to an economic theory that has little to do with reality.

"Todays announcement by the Water Industry Commissioner seeks to create this magic circle by proposing further 'efficiency savings' that are unachievable without serious risks to the safety of staff and public. The Water Quality Regulator has already warned of the dangers of the current staffing cuts. These proposals appear to go much further."

UNISON points out that the water industry in England is being asked to deliver a much smaller investment programme in return for a 30% cost increase. Scottish Water on the other hand, has to deliver a large scheme for a 4% increase.

Dave Watson said "These figures do not add up without further unrealistic cuts. "Scottish Water has already made massive cuts at a faster pace than the privatised industry south of the border - 40% over the last four years.

"Scottish Water inherited a massive burden of costly PFI schemes on 25-30 year contracts . They are contracted to pay contractors £112m per year (for 30 years), for assets that cost only £549m to build."

UNISON has outlined the key points that the Water Industry needs to address in its document It's Scotland's Water! This is available on the UNISONScotland website http://www.unison-scotland.org.uk/water/scotlandswater.html

ENDS

For Further Information please contact: Dave Watson (Scottish Organiser) 07787 558 410(m) Chris Bartter (Communications Officer) 0845 355 0845(w) 07715 583 729(m)

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