A new academic report launched today (Monday) has concluded Scottish Water is undergoing ‘privatisation by stealth’ and calls for an urgent independent inquiry into the publicly owned provider, says UNISON.
Commissioned by UNISON Scotland, the report warns the service is being hollowed out from within and transformed into a market-driven utility, increasingly indistinguishable from the system of privatised firms operating in England.
The findings raise serious concerns about a breakdown in industrial relations, growing reliance on outsourcing and weakened democratic oversight, says UNISON. There are also questions about long-term financial commitments that could bind future governments for more than a decade, without adequate financial scrutiny, the union adds.
Among the key issues identified in the report are:
Outsourcing – Although Scottish Water remains publicly owned, it’s estimated most workers delivering infrastructure projects are now employed by third-party contractors. This model has created a fragmented, ‘two-tier’ workforce with staff and contractors operating under different terms and conditions.
A breakdown in industrial relations – Industrial relations have gradually eroded and information is typically delayed, incomplete or absent, making it difficult for union representatives to carry out their roles. The report says the failures to consult ‘appear deliberate’ and aimed at hollowing out collective bargaining.
Procurement – A procurement process estimated to be worth between £5bn and £9bn is advancing ahead of the forthcoming Scottish Parliament election and risks locking in successive administrations without proper parliamentary scrutiny. The report warns that decisions taken now could shape Scotland’s water infrastructure model for more than a decade.
Customer charges – As of 31 March 2024, Scottish Water had accumulated a £4.3bn debt to the Scottish government. Interest payments on this debt are used to offset wider government expenditure, raising concerns that customer charges may be set above what is strictly necessary, allowing revenue to be used to plug gaps rather than reinvested in the water network. While customer bills rose by 8.8%, the remuneration package for the chief executive officer grew three times higher (28%) and workers faced pay restraint.
The report calls for a wide-ranging independent inquiry into governance structures and decision-making processes, a shift away from external contractors, more effective oversight and improvements to industrial relations, says the union.
UNISON Scotland regional organiser Rae Montgomery-Cahill said: “This report should serve as a wake-up call to the Scottish government. What’s needed is an independent inquiry urgently.
“Scottish Water is being privatised by the back door and it’s all but the same as the private water regime south of the border.
“This is no way to treat a public service. There’s a gradual and deliberate shift towards outsourcing, weakening accountability and sidelining the workforce.
“Anti-union bosses should have no place in Scotland’s public sector. Everyone will pay the price if the water industry continues to operate without proper democratic scrutiny.”
Notes to editors
– UNISON is Scotland’s largest public services union, representing 160,000 members. It is the union for Scottish Water staff.
– The report Scottish Water: creeping privatisation can be viewed here. It was written by Des McNulty (the University of Glasgow ) and Alan McKinlay (Newcastle University) and was commissioned by UNISON Scotland.