Scottish Water has dramatically improved its performance at the same time as it has reduced operating costs by more than a third, a report by the Water Industry Commission for Scotland (WICS) has claimed.
The government welcomed the WICS report, which it said justified its decision to rule out privatising the publicly-owned company last year.
The report shows Scottish Water’s operating costs are 35% lower now than they were when the company was formed in 2002.It also found drinking water quality has improved thanks to £2 billion of investment and leakage levels are 36% lower than they were five years ago.
The performance report is all the more striking given that operating costs for water companies in England and Wales have gone up by 13% while services there have not improved.
Alan Sutherland, chief executive of WICS, said, “Scottish Water has not only delivered the challenging savings and performance improvements that we required, but has managed to go further by a significant margin.
“For example, it is providing better levels of service than were funded through bills and has beaten its leakage targets. This out-performance means that customers are getting more for their money.”
At price reviews in 2001 and 2005 WICS challenged Scottish Water to meet government targets for £2.5 billion less than the company originally proposed in its own business plansLower billsAs a result, average household bills are around £105 a year lower than they would otherwise have been.
On top of these savings, Scottish Water has also outperformed in a number of areas.
WICS estimates that Scottish Water’s greater efficiency and additional benefits to customers now equate to around £12 per average household a year.
Mr Sutherland added, “Our regulatory objectives, combined with a determination on the part of Scottish Water’s management to rise to the challenges we set, have delivered significant benefits to customers and the environment.
“Scottish Water has provided efficiencies and additional benefits to customers to the value of around £175 million in 2006-10.”
A Scottish Government spokesman said, “This report is further evidence of Scottish Water’s value and importance to the people of Scotland. We particularly welcome the improvements in customer service, leakage rates, water quality and savings to the taxpayer.
“It follows last week’s Output Monitoring Group, which showed Scottish Water’s £2.45 billion investment programme supported more than 5000 construction jobs in Scotland from 2006-10.”
Last year the government rejected a call by the Independent Budget Review Group to turn Scottish Water into a not-for-profit company, which they said would provide a £3 billion windfall.