Water Industry Investment Group minutes: March 2025
Minutes from the meeting held on 12 March 2025.
Part of
Attendees and apologies
- Darren Knox, Investment & Risk Team Leader, Scottish Government (SG), Chair
- Rosemary Greenhill, Head of Water Policy, SG
- John Doherty, Policy Officer, SG
- Jo Blewett, Deputy Director for Water Industry and Corporate Operations Division, SG
- James Simpson, Head of Sponsorship, Investment & Risk, SG
- Simon Parsons, Director of Environment, Planning and Assurance, Scottish Water (SW)
- Rob Mustard, Director of Capital Investment, SW
- Alex Plant, Chief Executive, SW
- Aileen MacKenzie, Regulatory Assurance Manager, SW
- Colin McNaughton, Director of Performance and Reporting, Water Industry Commission for Scotland (WICS)
- David Satti, Interim Chief Executive, WICS
- Shane Taylor, Consumer Scotland
- David Harley, Head of Water and Planning, Scottish Environment Protection Agency (SEPA)
- David Reynolds, Drinking Water Quality Regulator (DWQR)
- Matthew Bower, DWQR
Apologies
- Gail Walker, Consumer Scotland
- Sharron Forrester, SEPA
- Wendy Kimpton, Director of Strategy & Regulation, SW
Items and actions
Welcome and introductions
Darren Knox opened the meeting. Apologies were given by Wendy Kimpton and Sharon Forrester. Darren Knox welcomed Shane Taylor to his first meeting of Water Industry Investment Group (WIIG).
Review of actions from previous WIIG meeting
- 20.05 – Closed. Superseded by actions at last meeting in December
- 21.01 & 21.02 – Closed. To be taken forward via a task and finish group
- 21.03 – Closed. To be picked up elsewhere
- 21.05 – Closed. SW delivered presentation at Working Group back in February
- 22.01 – Closed. SW to present a separate session on this outside of Investment Group
- 22.02 – Closed. Meeting held on 11 March. 2 actions to provide additional information and 1 action for a further discussion around the ruleset for managing the completion budget
- 22.03 – In progress. Has been actioned in part
- 22.04 & 22.05 – Closed. Will be picked up through Future Investment Group.
- 22.06 – In progress
- 22.07 & 22.08 – Closed – on agenda for later today
- 22.09 – Closed
Working group report
Darren Knox provided attendees with a report on the previous month’s Working Group (WG).
Working Group met on the 12th of February to review progress at the end of Q3 24/25. Format was changed slightly with standard papers taken as read and members asked to provide feedback in advance.
Discussions took place on the scope change process and completion projects and presentations were given on the water distribution and water storage Management Approaches.
In the meeting, Working Group approved Scottish Water’s proposed adjustments in relation to “Need 536” – provide autoshutdown capability where none exists, in agreement with DWQR.
Additionally, agreement was achieved to bring updated management approaches to this group, which is on today’s agenda.
Also of note in the meeting was that the number of bursts had increased over the winter – Darren Knox extended once again Scottish Government’s thanks in relation to their handling of these bursts.
Updates were given on key projects, the Improving Urban Waters Routemap and updated forecasting of high priority needs to be delivered by December 2027.
WICS registered concerns around scope change process at Londornoch.
Improvements were agreed to be made to papers/governance arrangements.
Next WG will be on 4th June 2025. Hosted by SW.
Darren Knox opened the floor to attendees for comment.
Questions were asked around the increase in bursts over what had been a relatively mild winter, when these increases typically occur during periods of colder weather. The presence and age of Asbestos Cement Mains (ACMs) was given as a key reason behind this increase.
Action 23.01 SW to provide attendees with copy of presentation around ACM bursts.
Hot Issues
Darren Knox thanked members for their contribution to the exercise. Of note is the fact that some common issues appear to be cropping up among stakeholders. Some of the key common issues flagged by stakeholders were:
- a desire to achieve better understanding of progress towards Ministerial Objectives (MOs)
- a desire for more information on SW’s performance towards levels of service
- difficulties in relation to the water quality programme
Jo Blewett raised that there is responsibility for everyone to consider what we need out of this meeting, what data do we need from SW. Comments were made about what this group should be here for – i.e. exception reporting and remediation.
It was raised that there is a no Joint Development Group for WICS and Consumer Scotland with Scottish Water.
Actions
- 23.02 SW to bring more evidence to the working group in August demonstrating progress towards MOs, the outputs required to deliver these outcomes, and performance in relation to levels of service measures.
- 23.03 Separate WICS specific Joint Development Group (JDG) to be established
- 23.04 Creation of Joint Development Group between Consumer Scotland and Scottish Water to be discussed
- 23.05 Consideration to be given to how Joint Development Groups feed into this group
- 23.06 SG to be looped in to all JDGs for awareness
- 23.07 All attendees to feedback to Scottish Water on what baseline information reporting and evidence they would like SW to provide
- 23.08 Hot Issues to be maintained as an agenda item, with a process for ensuring Issues remain “hot” to be established
Progress report of performance against the Committed List
The accompanying paper for this agenda item was taken as read. SW presented some key points:
- performance at a glance – main metrics in report. Erring towards top end of planned tier 1a investment. Piece of work around whether this is above or below forecast burn rate
- Indicator of Progress of Overall Delivery (IPOD) – within range, but with some pressure on Gate 100
- Investment Forecast Against Commitment (IFAC) – within range
- treated water storage programme is being used as a testing ground for a Lean approach, a precursor to wider adoption in Strategic Review 2027-33 (SR27) delivery model for Delivery Vehicle 4 (DV4).
- completion and water quality have been and are continuing to be challenging programmes
The floor was opened for comment:
Consensus existed for SW’s approach of taking their time to make sure works are carried out properly without creating further downstream issues.
Although RAG status is red, attendees were comfortable that mitigations were in place and benefits being delivered for customers. The main concern is not the status while in progress, but rather the status at the end of the regulatory period.
A question was raised around what negative consequences may be caused by unexpected delays related to the approach of taking care to complete projects correctly (i.e. without causing potential downstream issues), particularly whether there will be an impact to cost. The response was that this will cost somebody more within the system, but not necessarily SW or the customer, with supply chain contractual agreements being flagged as providing an insulative role.
Progress report on interventions to meet the needs on the Development List
SW took attendees through the progress report. Main messages: maturity of investment programme is strong. Work still being promoted. Highlights in terms of investment appraisals.
All attendees were content for publication pending the correction of outstanding errata.
Questions were raised over the ongoing utility of the Progress to the Committed List (PCL) measure, particularly as we move into SR27.
WICS raised a desire to take a sample of projects to review whether the scope is appropriate and analyse the cost itself, with an aim to look at 2-3 projects ahead of SR27. SW flagged that it’s necessary to ensure that this is predicated on a whole life cost and benefit assessment, rather than a more simplistic measure, with comparisons drawn to regulators elsewhere limiting these analyses to purely a 5 year cost/benefit measure. Also of note is that some of the benefits may not be monetarily quantifiable.
Discussion of this analysis work also centred around looking at why other alternative solutions weren’t considered for a specific project – not necessarily just looking at cost but looking at the accompanying benefits provided – potentially scope for a solution that costs more but brings with it greater social or environmental benefits that don’t necessarily have an easily assignable monetary value. The Strategic Review 2021-27 (SR21) final determination had allowance for schemes that cost more but delivered more social or environmental benefit – with support amongst attendees for maintaining a similar approach.
Actions
- 23.09 Aileen MacKenzie and Jo Blewett to meet to discuss the Project Investment Appraisal (PIA) process
- 23.10 WICS and SW to liaise over proposed WICS review of sample of projects
- 23.11 SG and WICS to discuss with SW how the current appraisal process works and how this could work in the future
Transfers to the Committed List
SW took attendees through the Transfers to the Committed List paper.
20 projects progressed onto Committed List. Split between water/waste/support services. The 20 projects are contained within the appendices.
Update on Management Approaches
SW provided a paper updating on their Management Approaches which is typically provided to Working Group.
Discussion
Attendees expressed positive views on the usefulness of seeing this paper.
Draft Terms of Reference (ToR) for WIIG and its working group
Darren Knox took attendees through the draft Terms of Reference for SGIG, and SGIG Working Group and proposed changes.
It was proposed to rename the group from Scottish Government Investment Group to the Water Industry Investment Group. Attendees were content with this change.
Attendees were content with changes suggested to the group’s remit.
Discussion
It was flagged that it may be a little odd that SW documents are currently published through the SG website, with a suggestion for SW to publish these documents – with SG hyperlinking where necessary.
SW were content with a public facing dashboard, but skeptical of having it in place by the end of SR21 – with a view that it makes more sense to have it in place for the commencement of SR27. This dashboard could then be updated regularly following these meetings.
It was flagged that there is still a need for us to have a collective view on progress towards the Ministerial Objectives, not potentially conflicting views as individual stakeholders. It was also raised that progress towards Ministerial Objectives is not met solely through capital investment.
Consumer Scotland raised the fact that we need clarity over purpose of group and for whose benefit – is it about demonstrating progress against the delivery programme or is it about providing assurance – and if about assurance, to who? Ministers or customers?
SG flagged a belief that this group is about providing assurance to ministers over delivery towards ministerial objectives and that this needs to be maintained. SW flagged that this is purely about the investment part of that however.
There was a view that this meeting should still keep the focus on the capital delivery programme.
Comments were made by attendees flagging the similarity of the Terms of Reference. Concerns were raised that the ToR for main group and working group may be too similar, and may not adequately separate the purposes for the main group and working group.
It was questioned whether we should be looking solely at outputs or whether outcomes should come into it.
Concerns were raised over whether looking at performance metrics on a monthly basis is potentially too granular – there is a lot of month to month and seasonal variation. What is the optimum time to look at them? Ultimately, context is important to this point.
Comments were made that Working Group should act as a task and finish group, potentially act more efficiently. Simply reviewing papers that go to this group can be done offline.
Actions
- 23.12 Darren Knox to reflect on feedback, update ToR via tracked changes and circulate to attendees
- 23.13 All attendees to provide any additional feedback after this call
Any other business
The progress of the Cunliffe Review of the sector in England and Wales was raised. Ministers will respond on behalf of SG.
Action 23.14 SG and SW to liaise with regard to responses to the Cunliffe Review.
