Scottish Water sell-off cannot be ruled out

BY ANY measure Scottish Water is a success story. It has slashed operating costs from £450 million to just over £250m by the end of 2008 and the average annual cost per customer of £370 is one of the lowest in Britain.

And it is undertaking a vast programme of improvements to supply, most notably with the creation of new treatment works at Flotterstone to replace Edinburgh's ageing Fairmilehead and Alnwickhill reservoirs and which will use the latest environmentally-friendly techniques to power the plant. But as the last great public utility in Scotland and the only water supplier to remain unprivatised, the debate about its ownership status will not subside and the recommendation from the Centre for Public Policy for Regions that it should be considered for sale needs careful consideration.

It has long been a shibboleth of the left that as it rains a lot Scotland's water should belong to us all and that its success proves not that it should be sold off but that other utilities should be brought into public ownership on similar lines.

But the truth is that successful though Scottish Water undoubtedly is, the pace of improvements elsewhere has been more rapid and repairs cost 150m a year from the public purse – not a figure which will decrease anytime soon.

Continued investment from public funds will be increasingly difficult as cutbacks bite and John Swinney cannot rule anything out to balance his books.