Scottish Water loses £350 million deal to Anglian Water

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A £350 million water contract has been taken away from publicly-owned Scottish Water and handed to a private-firm based in the south east of England, the Scottish Government today confirmed.

Infrastructure Secretary Keith Brown said the deal with Anglian Water will save £40 million a year which can be poured back into public services.

But the prospect of the deal had already provoked anger from opposition parties who say Scotland’s water should be used for the public good not for lining “shareholders pockets.”

Currently the billing and servicing of water for council buildings, hospitals, universities, prisons and the Scottish Parliament is carried out by Edinburgh-based Business Stream.

This is 100 per cent owned by publicly-owned Scottish Water.

But Mr Brown today insisted that Anglian Water Business (AWB) has emerged as the most competitive bidder for the contract, which will see Scottish Water continue to provide the water for the 96.5 per cent of Scotland’s population it currently supplies.

He said: “This is the best deal for Scotland under the rules that bind us, and this contract will save public bodies up to £10 million annually for the initial three year period of the contract with the option to extend for a further 12 months.

“Legislation introduced by a previous administration to safeguard the public status of Scottish Water requires us to tender out these services.

“But we have ensured that Scottish Water remains in public hands, and we have secured the best possible deal to ensure Scotland benefits.”

AWB’s bid offered immediate savings of £5 million a year compared to the nearest bid, and water efficiency support to reduce customers’ water consumption.

As well as helping the environment, these ‘green’ measures could reduce bills by a further £5 million a year. This means the contract will save public bodies up to £40 million over the next four years.

The biggest benefit of all will be the money that can be ploughed back into the services provided by those buildings – the schools, hospitals and public offices – throughout Scotland.”

An extension was put in place on the selection process to allow all the bidders to consider initial feedback and provide on-going service to public bodies. The current contract will be continued until December 31 to allow for a seamless transition to the new management.

The Government says the new contract will be managed from AWB’s Edinburgh office and bring jobs, apprenticeships and training to Scotland.

Any transferring staff will be protected as well as creating savings for public bodies.