Scottish Water faces crisis, warns ex-chief

The SNP government’s vision for Scottish Water has come under fire from the former head of the Water Commission.

Sir Ian Byatt said the approach of the SNP regime reminded him of the way ministers dealt with the old nationalised industries of the 1970s and dismissed proposals which could see the utility become self-financing through green electricity.

He also warned that Scottish Water must be allowed to borrow money from markets to fund future investment – a move which has been ruled out the Scottish Government who say Scottish Water must remain a nationalised firm.

“Lending to Scottish Water has been cut to zero in the current financial year,” Sir Ian writes in an article for The Scotsman today. “The intention is to restore it in subsequent years, but where will the money come from? The crunch is only just the beginning in Scotland.”

He suggests the firm could be converted into a public interest company and allowed to borrow on the markets – and scoffs at SNP suggestions which would see it producing green electricity at prices that would make it self-financing. “As we have seen in multi-utilities in England and Wales, water and electricity mix only with difficulty,” he adds.

He also says finance secretary John Swinney had not developed plans for a Treasury function in Scotland as the prospect of borrowing powers loom.

“I sometimes wonder whether current ministers are more concerned with independence from money than independence from England.”