Water Industry Investment Group minutes: March 2026
Minutes from the meeting of the group on 11 March 2026.
Part of
Attendees and apologies
- Darren Knox, Scottish Government (SG), Chair
- James Simpson, SG
- Paul Boyle, SG
- Alex Plant, Scottish Water (SW)
- Simon Parsons, SW
- Rob Mustard, SW
- Wendy Kimpton, SW
- Aileen MacKenzie, SW
- David Reynolds, Drinking Water Quality Regulator (DWQR)
- Colin McNaughton, Water Industry Commission for Scotland (WICS)
- Tom Hall, WICS
- Gail Walker, Consumer Scotland (CS)
- Sharon Forrester, Scottish Environment Protection Agency (SEPA)
Apologies
- Jo Blewett, SG
- Alex Flucker
- Rosemary Greenhill, SG
- Shane Taylor, CS
Items and actions
Welcome and introductions
Darren Knox opened the meeting and welcomed Tom Hall, Director of Performance and Reporting, Water Industry Commission for Scotland (WICS).
Review of open actions from previous WIIG meeting
Darren Knox outlined outstanding and completed actions within the action log.
Outstanding action
- Investment Group (IG) 26.05 Description of outputs. Scottish Water (SW) – in relation to Langlands road and we had reported as 11 outputs, now updated in terms of internal, external, and other. Can confirm relates to nine houses. Will share updated papers.
Closed since WIIG meeting on 10 December 2025
- IG 24.07 - Complete
- IG 26.01 - Complete
- IG 26.02 - Complete
- IG 26.03 - Complete
- IG 26.04 - Complete
- IG 26.06 - Complete
- IG 26.07 – Complete
Working group report, updates from Joint Development Groups (JDGs) and hot issues
WIIG 27-26-01 Working Group (WG) Report
The Working Group met on 18 February 2026 and endorsed a proposed scope change relating to the Londornoch project. This is to be reviewed/approved at this group (Item 6).
Joint Delivery Groups (JDGs)
Scottish Water reported on a meeting with WICS covering the Torra project, the Improving Urban Waters Routemap (IUWR), and Investment Planning Scenarios (IPS).
The Drinking Water Quality Regulator (DWQR) advised that, at its meeting it had highlighted issues relating to the implementation of disinfection requirements.
DWQR noted that the issues at Clatto highlighted considerations around disinfection requirements and that there will be a need for a clear communications strategy to inform stakeholders of the investment required over multiple periods.
Hot Issues
Scottish Water advised that they are no longer in drought conditions and supplies have recovered - overall water resources reported at 97%. It was noted that the experience of the previous year reflected not only low levels but also water quality issues, particularly in the Dundee region, all of which will be taken into account as drought curves are reviewed.
Consumer Scotland queried whether further consideration had been given to customer messaging, noting the recurring pattern of wet winters followed by dry summers and the importance of maintaining public awareness.
Scottish Water provided an update on its delivery arrangements, confirming that the Delivery Vehicle 4 (DV4) enterprise model had commenced, that Delivery Vehicle 2 (DV2) had been extended, and that Delivery Vehicle 1 (DV1) was in the process of closing down. A board for the new enterprise model had been established.
Scottish water highlighted organisational changes, with their new operating model to be launched on 1 April – moving to Water, Wastewater and Customer directorates. Recruitment for a permanent Customer Service Director is underway, with the Chief Operating Officer currently covering the role in the interim.
Scottish Water confirmed that it had signed a lease on the new Waverley Court office, with a move expected in summer or autumn 26. WICS asked about plans for the Fairmilehead site. Scottish Water advised that it intended to seek planning permission to maximise the value of the site and enable housing development, having already engaged with the local authority regarding a change of use. Any proceeds would be used to support the office move or to upgrade facilities elsewhere.
The Scottish Government noted that a substantial leak had been identified in the Dundee area and confirmed that it had engaged with Scottish Water, who are already aware.
Progress Report of performance against the Committed List and update on Strategic Review 2021-27 (SR21) Unsatisfactory Intermittent Discharge (UID) programme
WIIG 27-26-03 (IUWR)
Scottish Water presented with a focus on investment commitments relating to Combined Sewer Overflows (CSOs) and wastewater treatment works. It was noted that the Improving Urban Waters Routemap (IUWR) would be refreshed to align with Strategic Review 2027-33 (SR27) commitments. The commitments set out in the paper do not align exactly with the regulatory period. By the end of 2027, a total of 97 projects and improvements are expected to be delivered. Projects that focus on water quality are often more complex.
Scottish Water explained that the accompanying graph illustrated a mix of project types, reflecting differences in complexity and the fact that some projects were no longer required. Around 15 projects were currently live, many of which are in challenging urban environments. SEPA asked whether delivery of the St John Street CSO could be accelerated. Scottish Water advised that a revised scheme had been developed to achieve completion at St John Street earlier, but this would be at increased cost and would have implications for average unit costs across the programme. Ongoing communications were being shared with SEPA, which had confirmed its regulatory position in relation to water quality and UIDs. It was noted that there had been no significant changes since the previous report.
The Scottish Government queried the baseline presented in the time series, noting that this did not align with original commitments or with SEPA’s expectations, and referred to earlier discussion at Working Group on the need to reflect this more clearly. Scottish Water indicated that there was a difference of view between Scottish Water and SEPA regarding the original IUWR commitments. Scottish Water reiterated that delivery numbers had always been dependent on funding availability and highlighted significant competing demands in SR27. It was noted that Scottish Water had shared detailed lists with SEPA and had agreed an approach to substitution where necessary. While there had been an original list of 108 sites, Scottish Water stated that a formal baseline had never been established. The Scottish Government referred to the 24 water quality UIDs identified through the River Basin Management Plans (RBMP) and noted only 19 are expected to be delivered. Scottish Water agreed to check the number of relevant RBMP projects. SEPA advised that it had written to Scottish Water and could circulate this correspondence to the Group, confirming that SEPA’s position was that 108 represented the baseline expectation and that it was moving towards a regulatory position. In response to a question from SEPA on timescales, Scottish Water confirmed that completion of the St John Street scheme was expected by the end of 2027.
Consumer Scotland raised concerns about low public awareness of the costs associated with sewage and litter, noting that costs related not only to clearing blockages but also to screening. It was suggested that greater transparency around these costs could help encourage better disposal behaviours. Scottish Water responded that local engagement work was undertaken where blockages occurred to help communities understand the causes, and that the forthcoming ban on wet wipes containing plastic was expected to have a positive impact.
The Scottish Government asked whether, of the 900 UIDs identified, Scottish Water had an assessment of how many would remain unsatisfactory if customer behaviours were to change, and whether poor disposal practices were driving the need for investment. Scottish Water advised that, aside from 24 sites, the remainder were linked to aesthetic issues and that numbers were expected to reduce once the wet wipes ban came into force.
WICS expressed concern that a significant number of UID removal projects were being rephased into SR27. Questions were raised as to why delivery had slipped, why projects were being moved to 2027, and what Scottish Water had invested in during the current period instead. It was noted that this issue would be considered as part of the performance report and there was not yet full confidence in the proposed baseline. The importance of understanding whether customers had benefited when investment was moved or rephased was also emphasised. Scottish Water indicated that it was content to engage further to explain the position, noting that discussions with SEPA focused on the number of schemes to be delivered in SR27 and that some projects had also moved into Strategic Review 2033-39 (SR33). Scottish Water added that managing demand and reducing inappropriate disposal into sewers were fundamental elements of its overall strategy and business plan.
SEPA confirmed its view that some SR21 investment had been rephased into SR27 and stated that schemes to be delivered by the end of December 2027 should be considered separately from commitments for SR27. Scottish Water reiterated its view that around 150 would be delivered in SR27, while noting that they would check these figures and confirm.
WIIG 27-26-02 (Committed List)
Scottish Water provided an update, ahead of Quarter 3, total investment of £897 million was forecast. The programme continued to face significant challenges in balancing demand against available financial resources. In performance terms, start on site was reported as 0.1 months behind schedule, acceptance was 2.4 months behind, and financial completion was 0.9 months ahead. Overall, programme metrics and milestones are reported within target, with work ongoing to bridge the gap between acceptance and the point at which delivery risks are fully mitigated.
In relation to the completion programme, Scottish Water highlighted two projects that were now being progressed through alternative options. This included a CSO scheme in Glasgow, which required further review, and the Rockliffe project, which was now moving towards an infrastructure-based solution. Scottish Water confirmed that delivery arrangements for these projects had been revisited. It was also reported that Investment Forecast Against Commitment (IFAC) performance stood at 97.9 per cent, with costs projected at Gate 90 to completion tracking slightly under forecast.
Scottish Water advised that market conditions had not, to date, shown any immediate impact despite recent events in the Middle East, however prolonged disruption could have future implications. An update was provided on digital investment, with preferred bidders now selected for IT security and support. It was confirmed that outputs were still being delivered as intended, although some schemes had required review to achieve the agreed outcomes. Examples included the West Bank Quadrant and Stenny North, where alternative approaches were being considered.
Approve publication of WIIG 27-26-02
The Group agreed that Scottish Water should proceed with publication of WIIG 27-26-02.
Actions
- IG 27.01 – Scottish Water to check numbers of relevant IUWR/RBMP projects
- IG 27.02 – SEPA to circulate correspondence regarding IUWR
- IG 27.03 - SEPA looking for Scottish Water to confirm the numbers of UIDs to be resolved as part of an intervention in SR21 & SR27
- IG 27.04 - SW to publish 27-26-02
Progress Report on interventions to meet the needs on the Development List and Transfers to the Committed List
WIIG 27-26-04 (Development List)
Scottish Water presented an update on the Development List, advising that the forecast investment for 2026/27 was £1,126 million against a planned investment level of £1,210 million, leaving a gap of £84 million. It was explained headroom was required to allow flexibility for responsive investment. Progress against the Progress to Committed List metric was reported at 105 per cent. During Quarter 3, nine appraisals had progressed, with six moving to the next gateway stage and two approved to progress further. The Torra project was approved for commitment and delivery, following a recommendation from the Scottish Water Investment Group. Members were also referred to notes in the paper regarding membrane approvals and decommissioning issues.
An update was provided on the Seafield PFI appraisal, where concerns raised by customers and the local community in relation to odour and sludge treatment had been considered. The Scottish Water Investment Group had approved the project to move to the next appraisal stage. The Scottish Government noted a meeting of the Cabinet Secretary at Seafield and referred to an understanding that an announcement on investment had been made. Scottish Water clarified that the investment referenced was associated with the delivery of commitments already agreed, rather than representing new or additional investment.
In discussion on the Torra project, the Scottish Government highlighted that the paper referred to membranes lacking approval from the DWQR, noting that this sat with the Scottish Government and was affected by a lack of testing capacity. Scottish Water may wish to write to the Scottish Government to escalate the issue. Scottish Water advised that Water UK was exploring options to address the issue. DWQR confirmed that it could support Scottish Water’s engagement with Water UK.
The Group agreed the report could be published subject to a minor amendment.
WIIG 27-26-05 (Transfers)
Scottish Water provided an update on transfers to the Committed List, advising that the total value of investment now stood at £4.7 billion, including additions of £159 million during Quarter 3. This comprised 17 individual projects with a post‑March 2021 forecast cost of £57 million, alongside programmes of work valued at £102 million. Examples included the Compass transformation programme, which uses technology to enable more intelligent control through a remote operating centre, as well as activity linked to digital policy, network execution, UID programmes, and the Saltcoats water rising main.
Consumer Scotland commented that it was difficult to clearly identify the customer or community benefits associated with the investments outlined and suggested that these could be better contextualised, particularly where there were tangible benefits for end users. Scottish Water acknowledged this point, noting that benefits were linked to the outputs being delivered, some of which would be realised in SR27, and confirmed that it would seek to improve how customer benefits were illustrated.
WICS referred to earlier Working Group questions regarding the Compass programme, observing that while costs were visible, the benefits were less clearly set out. Scottish Water explained that the Compass programme was not yet in full delivery and that pilot work, including remote reset and expansion activity, was being used to inform future rollout. It noted the importance of tracking efficiencies within internal processes and presenting this information in a clearer and more accessible way.
WICS further asked whether Scottish Water had a holistic benefits framework to support comparison of the relative benefits of different activities, projects and programmes. Scottish Water advised that, as part of the development of SR21, it had introduced project investment appraisal and management approaches. While progress had been made, it acknowledged that further work was required to strengthen system‑level aggregation of benefits. Scottish Water noted that tools such as Copperleaf would be used to support investment planning, alongside maintenance and statutory commitments, and that dynamic programming would continue during delivery. It was agreed that Scottish Water would follow up with WICS on these points.
Action IG 27.05 – 27-26-04 to be published, with corrections that approvals with SG, not DWQR.
Strategic Review 2025-21 (SR15) Completion Project scope change process – Londornoch
WIIG 27-26-06
Scottish Water presented a proposal relating to the Londornoch SR15 completion project within the SR21 completion programme. The project had been underway but was paused after it became clear that the approved scope was insufficient to deliver the required outcomes, without avoiding abortive expenditure. By that stage, Scottish Water had invested the maximum amount permitted within the existing allowance and estimated that a further £2.25 million would be required to deliver the expanded scope. It was proposed that a £1.125 million adjustment be made through a reduction to the SR21 fixed sum completion allowance. It was noted that milestones should not present a misleading picture of project progress or customer benefit, and that investment should demonstrably deliver benefits for customers.
In response to questions about the remaining £1.125 million, Scottish Water recommended that this funding be redirected towards the water quality programme. The Scottish Government indicated that it was content with the proposal and requested that, should funding be allocated to Croftnahaven, there should be ongoing visibility of progress. Consumer Scotland confirmed its support for option one as the preferred approach. Scottish Water noted that the proposed approach could establish a methodology that may be capable of being applied to similar situations in future. Scottish Water confirmed that there were two other projects affected, both within SR15, and that while the scope of these projects was still being delivered, this was being achieved through alternative approaches.
The Group confirmed its agreement with the proposed scope change.
[IG 26.02] Update on DV4
WIIG 27-26-07
Scottish Water provided an update on the development of the DV4 Enterprise delivery model, noting that contracts have now been issued for signing and that board establishment activity has already taken place. The organisation confirmed that the new model is intended to support delivery of the SR27 investment programme from the outset.
Scottish Water explained that DV2 is being extended to include smaller repair works and to bring smaller partners into the delivery structure, while the remaining DV1 alliances are being closed down.
The Scottish Government asked about the scale of investment expected to flow through the Enterprise model, referencing an estimated £2.5 billion through SR27 and the potential for between £5 billion and £9 billion over the 13-year period. Scottish Water confirmed that the model is expected to grow in line with the wider investment programme. WICS sought clarification on the distinction between the £600 million allocated to major projects and the £2.2 billion allocated to other investment. Scottish Water explained that major projects are those requiring unique or highly specialised approaches. Examples included the replacement laboratory at Juniper House, work at Turriff linked to the DWQR driven ceramic membrane framework, and specific elements of the West Central Bioresources programme relating to Daldowie. These projects have been taken forward outside the Enterprise model in line with Scottish Water’s approach to allocating certain specialist projects to alternative delivery routes.
WICS emphasised that deliverability will be examined as part of both the draft and final determinations for SR27 but acknowledged that Scottish Water is ahead of typical timelines in establishing its delivery vehicles. WICS also noted the need to remain mindful of risks associated with transitioning to the new DV4 model, particularly as changes to design and development processes coincide with a significant increase in investment delivery. They requested to be kept informed of progress, particularly given the reduction to seven delivery partners from eight.
Scottish Water confirmed that the investment profile for the initial years of SR27 is lower than previously anticipated, with the Enterprise model expected to deliver approximately £180-£200 million in its first year. This reduced early profile has allowed Scottish Water to secure resource commitments from partners ahead of the investment ramp up and to adopt a revised approach to risk allocation between Scottish Water and its delivery partners.
Draft revised Investment Planning and Prioritisation Framework (IPPF) for 2027-33
WICS presented the draft revised Investment Planning and Prioritisation Framework for 2027–33. The Scottish Government and Scottish Water both agreed with the slide outlining the role of WIIG, while WICS emphasised that responsibility for final investment decisions ultimately rests with Scottish Water. Scottish Water raised a concern that the proposed reporting requirements could become overly onerous.
The Scottish Government noted its intention to update governance directions for SR27.
Scottish Water explained that, under the updated delivery plan, information would be reported twice a year rather than annually, with data being replicated into tables in June. It questioned whether the proposals were proportionate and sufficiently focused on protecting customers, and cautioned against unintended consequences, including that dynamic planning should not be lost to a change control process. WICS noted these points and confirmed they would be considered.
Consumer Scotland commented on proportionality, noting that while individual changes are often driven by legitimate factors such as regulatory requirements, the cumulative impact of multiple changes could be significant and may affect customer outcomes. Scottish Water reinforced the importance of proportionality, highlighting the detail in some of the tables and that reporting could become burdensome. The approach should focus on protecting customers and delivering agreed outcomes.
The Scottish Government asked whether there was an understanding of what SR21 would have looked like under the proposed framework. WICS advised that work was underway to review this. The Scottish Government also observed that some issues, such as customer flooding, do not always fit neatly within existing Joint Delivery Group structures, creating potential risks of duplication or gaps in coverage. WICS confirmed it would consider this further.
Scottish Water asked how unintended consequences of the framework could be identified, while the Scottish Government suggested that greater aggregation of outcomes and outputs might help. Scottish Water noted that concerns about the volume of reporting had been raised previously. Consumer Scotland asked whether there would be an opportunity for stakeholders to provide feedback. WICS agreed that bilateral engagement would be appropriate and confirmed that it would follow up accordingly. It was agreed that WICS would set up bilateral discussions.
Action IG 27.06 - WICS to set up bilateral discussions
Any other business
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