Investing in and paying for water services: consultation

Ministerial Objectives – Final Draft

Scottish Ministers are required to set the investment objectives for the water industry in Scotland. It is important that these fully support the Government's core purpose - to create a more successful country, with opportunities for all of Scotland to flourish.

Final Draft Objectives for 2021-27 and beyond

The draft statement of investment sets out Ministers' policies in relation to the standards of service that must be delivered in the period 2021-27. Over the past year the Government has worked with Scottish Water, the regulators and customer representatives to formulate a final draft set of Ministerial Objectives. These are based on progress made to date, studies undertaken in the current regulatory period, and known legislative requirements. The final draft statement is attached at Annex C.

This statement is largely aligned with the initial draft consulted on in 2018 but builds on it in the following particular areas:

• ensuring Scottish Water is taking the lead in working with partners to pursue action towards the realisation of the co-created sector vision; and
• including the commitments made by Scottish Water in the 2019 Programme for Government, to develop and implement a strategy that will see it take a leadership role in working with others to increase the renewable energy generated or hosted on its land and assets to 300% of its annual usage by 2030 and to achieve net zero emissions by 2040.

The statement sets objectives in the following areas:

1. Long Term Water Sector Vision – Scottish Water should take the lead in working with partners to begin to pursue action towards the realisation of the co-created vision.

2. Standards of service – Scottish Water should maintain or improve current levels of service over the long term.

3. Asset Maintenance – Scottish Water should develop an evidence-based strategy that will inform the long term capital maintenance needs of the industry.

4. Supporting Sustainable Economic Growth – Scottish Water should continue to invest in water, sewerage and drainage infrastructure to provide capacity to enable development.

5. Drinking Water - Scottish Water should comply with drinking water quality duties and develop investment plans to remove contact of potable water with lead pipes in its network.

6. Environment - Scottish Water should build upon compliance levels with its current environmental licences and develop investment plans that address risks of impacts on the environment from its assets.

7. Flooding/Surface Water Management – Scottish Water should pursue further partnerships with Local Authorities and other stakeholders to develop delivery and monitoring arrangements that will secure improvement for storm water management.

8. Security & Resilience – Scottish Water should develop, and act upon, strategies and plans, which will maintain and improve the resilience and security of Scottish Water's services and protect its network and information systems from malicious attack.

9. Climate Change, Adaptation and Mitigation - Scottish Water should understand the impacts of climate change on its assets and implement its plans for adaptation measures necessary to protect services. In response to the climate change emergency, it should also develop and implement a strategy that will see it take a leadership role in utilising its land and assets, and working with others, to achieve its climate change commitments.

10. Private Finance Initiative funded contracts - Scottish Water should develop plans to manage its PFI contracts to secure the best value for money for the future operation of these facilities.

Further detail on these requirements can be found in Annex C. Whilst we are not seeking specific feedback on the draft Investment Objectives, we would welcome general comments.

Question 6 – Do the key policy objectives provide a sound basis upon which to plan the delivery of services from 2021?

The document is set at a very strategic level at this time, but will be developed into a statutory direction to Scottish Water following the consultation.