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Scottish Water ownership debated Review ordered into water utility
(about 2 hours later)
A change in the ownership of Scottish Water is to be considered by the Scottish Government. The Scottish Government has agreed to review the national water authority, but the move is unlikely to lead to privatisation or mutualisation.
BBC Scotland has learned Finance Secretary John Swinney will agree to review the company's future during a Holyrood debate on Thursday. The move over Scottish Water came following opposition pressure, but ministers are confident the review will back the government's current approach.
It is understood ministers are willing to consider public sector alternatives to government ownership, including mutualisation. Labour, which has not previously backed mutualisation of the publicly-owned utility, agreed to the review.
This would allow Scottish Water to borrow from financial institutions. The Tories and Liberal Democrats support mutualisation.
It could mean an additional £200m of public money would be freed up annually for other priorities. During a Conservative-led debate in parliament, infrastructure minister Stewart Stevenson promised to keep an open mind, but added: "There is a very clear consensus that Scottish Water is doing well, there is not a particularly robust suggestion that we should change the model."
The proposal had previously been rejected by both the SNP and the Labour Party, but both are now backing a review. The minister agreed to support Labour calls to review the structure and operations of Scottish Water, with mutualisation included as a possibility, but within the public sector.
Water charges Taxpayers' money
Mr Stevenson also pointed out average water charges in Scotland were lower than those in England and Wales, and would rise by less than the rate of inflation north of the border.
The Scottish Conservatives have long supported a change in ownership and the Liberal Democrats said Scottish Water would operate more efficiently as a mutual company.The Scottish Conservatives have long supported a change in ownership and the Liberal Democrats said Scottish Water would operate more efficiently as a mutual company.
Tory finance spokesman, Derek Brownlee, said: "Scottish Water costs each family around £100 a year, above and beyond their water bills. The Tories claimed the move would save more than £180m of taxpayers' money each year.
"Every year over £180m of taxpayers' money which could be spent on schools, hospitals or reducing the burden of tax is instead spent on Scottish Water. " Unison, the largest union representing water and sewage workers, and the Greens, said mutualisation was a smokescreen for privatisation.
However, Unison, the largest union representing water and sewage workers, said the plan was "crazy" and claimed it was simply a smokescreen for privatisation. Unison Scottish organiser, Dave Watson, said: "To borrow that money at expensive interest rates and allow private companies to extract further profits would add hugely to water charges."
Scottish organiser, Dave Watson, said: "To borrow that money at expensive interest rates and allow private companies to extract further profits would add hugely to water charges."
Green MSP Patrick Harvie said the "sudden shift" by Labour and the SNP was worrying, adding: "We believe mutualisation will begin an inevitable slide toward privatisation."