Hydro Nation: annual report 2021

Records the development of Scotland's Hydro Nation policy agenda and reports on progress since the publication of the seventh annual report in 2020.

Annex A - Structure of governance

Domestic market

Diagram showing structure of governance in the domestic water market.

Retail (non-domestic) market

Diagram showing structure of governance in the non-domestic water market.

Structures of governance – who does what?

The Scottish Parliament scrutinises the work of the Scottish Government and its public bodies, and holds them to account. Both the Scottish Government and the Scottish Parliament are accountable to the people of Scotland.

The Scottish Government – Scottish Ministers and their officials manage the relationship with Scottish Water and its regulators within the statutory framework established under the Water Industry (Scotland) Act 2002. Scottish Ministers set the objectives for the industry (as set out in the Ministerial Directions) and the principles that should underpin charges (as set out in the Principles of Charging Statement).

The Water Industry Commission for Scotland (WICS) has the statutory duty to set price limits for Scottish Water based on the lowest overall reasonable cost of achieving Ministers' Objectives for the water industry.

Scottish Environment Protection Agency (SEPA) is responsible for ensuring that Scottish Water meets strict environmental requirements. SEPA also advises Ministers on the delivery of and the need for future investment in environmental improvements

The Drinking Water Quality Regulator (DWQR) is responsible for monitoring and confirming that the drinking water supplied by Scottish Water through the public water mains system meets the requirements of the drinking water quality regulations and is safe to drink. DWQR also advises Ministers on the delivery of and the need for future investment in drinking water quality.

The Scottish Public Services Ombudsman (SPSO) is the final stage for complaints about Local Authorities, most licensed providers, the Scottish Government and its agencies and departments.

Central Market Agency (CMA) – On 1 April 2008, competition was introduced into the water industry in Scotland for retail (non-domestic) customers. The CMA is the organisation that administers the retail market for water and waste water services in Scotland. They are a company limited by guarantee and owned by its members.

Key sector stakeholders

Scottish Water is a public corporation accountable to Scottish Ministers and through them to the Scottish Parliament. The service Scottish Water provides to 2.57 million households and 153,000 business premises is essential to daily life in Scotland. Every day, Scottish Water delivers 1.53 billion litres of clear, fresh drinking water and takes away 1.08 billion litres of waste water that it treats and returns safely to the environment. With more than 60,000 miles of pipes and 2,000 treatment works, Scottish Water supports communities the length and breadth of Scotland every day. In providing these essential services to customers, Scottish Water recognises these activities and operations can be visible in the communities it serves. That is why Scottish Water works very hard to ensure it is responsive and sensitive to the needs of its customers in every corner of Scotland and aims to put communities at the heart of the business.

Scottish Water Horizons Ltd is a commercial subsidiary wholly owned by Scottish Water. The company plays a key role in supporting the development of Scotland's sustainable and circular economy by making the most of the public utility's vast array of assets. Drawing on its experience of the remarkable transformation in the water industry in Scotland, it also offers international services to utilities, governments and other clients from around the world, including the Middle East, Canada, Ireland and Australia.

Licensed Providers (LPs) – Retail (non-domestic) customers are able to choose who supplies their water and sewerage services. All water and sewerage service providers must be licensed by the Water Industry Commission for Scotland (WICS). WICS publishes a list of licensed providers and information on the retail market.

The Consumer Futures Unit (CFU) of Citizens Advice Scotland (CAS) represents water consumers, and is a key partner in many areas of policy development.

The Convention of Scottish Local Authorities (COSLA) is the representative voice of Scottish local government. Local Authorities provide the collection and billing for water and sewerage services on behalf of Scottish Water for all domestic (and non-metered) customers.



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