February 2008
Introduction
This briefing sets out UNISON Scotland's position
on the Scottish Conservative motion:
S3M-1386 Derek Brownlee: The
Future of Scottish Water—That the Parliament calls on the
Scottish Government to establish a review of the structure and
operations of Scottish Water with a remit to consider whether
the current model delivers best value for taxpayers and customers,
to consider alternative models, including mutualisation, and
to report back to the Parliament on the conclusions of the review
in such time as to allow any changes to the structure of Scottish
Water to be in place prior to commencement of the next spending
review period in 2011.
To be debated in Parliament on Thursday 21 February
2008. We take the view that this is yet another attempt by the
Scottish Conservatives to promote the privatisation of a vital
public service.
Mutualisation
The debate on the merits of mutualisation for
the water industry in Scotland has been characterised by a conspicuous
lack of detail on what such a policy would mean in practice.
The key questions are who has the resources and capacity to
invest in mutual assets, how would this investment be subscribed,
and how would the governance, accountability and management
of a mutual organisation deliver high quality water services
at reasonable prices to Scottish water users?
A core issue is that of investment. The only obvious
sources of funding for investment in a mutual water company
in Scotland are from the private sector. Essentially mutualisation
for the capital intensive Scottish water and sewage industry
is simply a smokescreen for privatisation. The mutual body would
in effect be owned by the financial institutions that provided
(the more expensive) capital funds. To minimise financial risk
they would insist that all services be provided by private contractors,
as happens at Welsh Water. Therefore the so-called mutual option
is in reality a token representation for customers on a board
overseeing a wholly privatised Scottish Water.
So at any time mutualisation/privatisation would
add huge additional costs onto the water charge payer through
higher borrowing costs and private profit. At this particular
time when the banking industry has driven itself into difficulties
worldwide, do we really want to hand over a vital public service
to those very same banks?
Given that water and wastewater services are crucial
for public health and socio-economic development, it is better
to develop an organisation which can fund investment through
the cheapest means possible and where multiple interests are
represented. To ensure democratic accountability the organisation
should remain in the public sector where other interests can
be represented through Parliament. Water is not simply about
customers seeking the cheapest possible water services. There
are wider public policy considerations around health, social
equity and environmental justice.
Conclusion
The water trade unions are always pleased to engage
in a debate about the future of Scottish Water. Indeed we believe
that the future should be based on greater democratisation of
the service. We have identified these issues in the STUC discussion
paper It's Scotland's Water that is attached to this
briefing.
However, the real Scottish Conservative agenda
here is the promotion of privatisation. Across the world communities
are fighting back against the ravages of water privatisation
despite pressure from global financial institutions. Control
over the delivery of safe, sustainable water should rest not
at the whim of the market but with the people of Scotland.
For further information please contact:
Dave Watson:d.watson@unison.co.uk
