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| Scottish ministers award £320m water contract to private firm | Scottish ministers award £320m water contract to private firm |
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| Nicola Sturgeon’s government has awarded a lucrative £320m contract to supply all Scotland’s schools, hospitals and councils with water to the private firm Anglian Water after months of delay. | Nicola Sturgeon’s government has awarded a lucrative £320m contract to supply all Scotland’s schools, hospitals and councils with water to the private firm Anglian Water after months of delay. |
| Five days after postponing a decision for the third time, the Scottish government revealed that Anglian Water had substantially outbid the publicly owned company Scottish Water, despite ministers’ repeated efforts to grant the latter extra time. | Five days after postponing a decision for the third time, the Scottish government revealed that Anglian Water had substantially outbid the publicly owned company Scottish Water, despite ministers’ repeated efforts to grant the latter extra time. |
| Related: Scottish ministers delay awarding water contract to English company | Related: Scottish ministers delay awarding water contract to English company |
| Ministers defended the deal, insisting it would save public services up to £40m over the four-year expected lifetime of the contract, and protect jobs, but it leaves the Scottish National party government open to charges of hypocrisy and opportunism. | Ministers defended the deal, insisting it would save public services up to £40m over the four-year expected lifetime of the contract, and protect jobs, but it leaves the Scottish National party government open to charges of hypocrisy and opportunism. |
| Sturgeon, the first minister and SNP leader, had campaigned heavily against increasing privatisation of the public sector in England during the referendum campaign and the general election, particularly in the NHS. Now all Scottish hospitals will buy their water and waste water services from the privatised utility, as well as nearly 100 other public sector bodies, including all universities and colleges. | Sturgeon, the first minister and SNP leader, had campaigned heavily against increasing privatisation of the public sector in England during the referendum campaign and the general election, particularly in the NHS. Now all Scottish hospitals will buy their water and waste water services from the privatised utility, as well as nearly 100 other public sector bodies, including all universities and colleges. |
| The contract was first due to be awarded in February, with Anglian Water made preferred bidder. A decision was delayed three times, leaving ministers vulnerable to legal action by Anglian. The contract with the previous supplier, the private supply arm of Scottish Water called Business Stream, was again temporarily extended last week until 31 December 2015. | The contract was first due to be awarded in February, with Anglian Water made preferred bidder. A decision was delayed three times, leaving ministers vulnerable to legal action by Anglian. The contract with the previous supplier, the private supply arm of Scottish Water called Business Stream, was again temporarily extended last week until 31 December 2015. |
| The SNP is also making deliberate overtures to the trade union movement after the Conservative party began pushing through an overhaul of unions after winning the election, but this deal was opposed by Unison and other unions. | The SNP is also making deliberate overtures to the trade union movement after the Conservative party began pushing through an overhaul of unions after winning the election, but this deal was opposed by Unison and other unions. |
| Patrick Harvie MSP, economy spokesman for the Scottish Greens, said ministers in Edinburgh should have done more to ensure Scottish Water’s company kept the contract. The delays had meant uncertainty for its staff and the public sector. | |
| “This was an opportunity to prevent the supply of water services to Scotland’s public sector falling into the hands of a private firm whose profits won’t benefit the Scottish economy, and specifically a company that paid no corporation tax this year yet handed shareholders a £180m dividend,” Harvie said. | “This was an opportunity to prevent the supply of water services to Scotland’s public sector falling into the hands of a private firm whose profits won’t benefit the Scottish economy, and specifically a company that paid no corporation tax this year yet handed shareholders a £180m dividend,” Harvie said. |
| “The market for business customers in Scotland was opened up due to competition legislation brought in by Tony Blair’s government. Scottish ministers must show determination to defend the public sector’s role in Scotland’s economy.” | “The market for business customers in Scotland was opened up due to competition legislation brought in by Tony Blair’s government. Scottish ministers must show determination to defend the public sector’s role in Scotland’s economy.” |
| Willie Rennie, the Scottish Liberal Democrat leader, said: “Embarrassment reigns over this private sector deal among SNP ministers. [Their] press release issued this morning was a masterpiece of misdirection but people should not be fooled. Ministers have exaggerated the savings to pull the wool over our eyes. They went to bizarre lengths to include statistics on 96.5% of households even though the private contract is not for householders. | Willie Rennie, the Scottish Liberal Democrat leader, said: “Embarrassment reigns over this private sector deal among SNP ministers. [Their] press release issued this morning was a masterpiece of misdirection but people should not be fooled. Ministers have exaggerated the savings to pull the wool over our eyes. They went to bizarre lengths to include statistics on 96.5% of households even though the private contract is not for householders. |
| “This is a private sector deal from a government which has told us it is utterly against such a thing. The simple fact is that this deal will see Scottish taxpayers hand profits to a private sector group. The real beneficiaries of this deal are the investors in Australia and Canada who own the vast bulk of Anglian Water Business.” | “This is a private sector deal from a government which has told us it is utterly against such a thing. The simple fact is that this deal will see Scottish taxpayers hand profits to a private sector group. The real beneficiaries of this deal are the investors in Australia and Canada who own the vast bulk of Anglian Water Business.” |
| Ministers defended the deal, arguing it was required under EU legislation. Anglian would take on Business Stream’s workforce and had pledged new apprenticeships; it had undercut Business Stream’s offer by £5m a year and was pledged to shave £5m off bills through increased water efficiency measures. | |
| Keith Brown, the Scottish infrastructure minister, said: “This is the best deal for Scotland under the rules that bind us, and this contract will save public bodies up to £10m annually for the initial three-year period of the contract with the option to extend for a further 12 months. | Keith Brown, the Scottish infrastructure minister, said: “This is the best deal for Scotland under the rules that bind us, and this contract will save public bodies up to £10m annually for the initial three-year period of the contract with the option to extend for a further 12 months. |
| “Legislation introduced by a previous administration to safeguard the public status of Scottish Water requires us to tender out these services. But we have ensured that Scottish Water remains in public hands, and we have secured the best possible deal to ensure Scotland benefits.” | “Legislation introduced by a previous administration to safeguard the public status of Scottish Water requires us to tender out these services. But we have ensured that Scottish Water remains in public hands, and we have secured the best possible deal to ensure Scotland benefits.” |
| The contract will still leave Scottish Water supplying wholesale water and sewerage to public bodies. Anglian Water will provide the billing, meter reading and water efficiency support. “We are delighted the contract award is moving forward,” the firm said. “The formal standstill period remains in force for another 10 days, but we look forward to the contract being awarded and being able to work with Scotland’s public sector, bringing similar savings to them as we have for our many other Scottish customers.” | The contract will still leave Scottish Water supplying wholesale water and sewerage to public bodies. Anglian Water will provide the billing, meter reading and water efficiency support. “We are delighted the contract award is moving forward,” the firm said. “The formal standstill period remains in force for another 10 days, but we look forward to the contract being awarded and being able to work with Scotland’s public sector, bringing similar savings to them as we have for our many other Scottish customers.” |
| Johanna Dow, the chief executive of Business Stream, said: “We are very disappointed by the outcome, having lost by the narrowest of margins. We have a proven track record of delivering excellent results working in partnership with Scotland’s public sector over the past seven years, with savings of more than £36m delivered over the term of the existing contract. | |
| Dave Watson, the head of bargaining and campaigns at Unison Scotland, said it was perverse to award a contract to a private firm to save money for the public sector if that firm was not paying corporation tax. The union was deeply disappointed that Anglian had won the contract. | |
| “In fairness, the Scottish government had few options because the system of retail water competition is the ultimate in market madness. Some £350m will be paid to Anglian Water in Huntingdon, only for most of that money to be repaid to Scottish Water in wholesale charges. The cost of this crazy system is picked up by the taxpayer.” | “In fairness, the Scottish government had few options because the system of retail water competition is the ultimate in market madness. Some £350m will be paid to Anglian Water in Huntingdon, only for most of that money to be repaid to Scottish Water in wholesale charges. The cost of this crazy system is picked up by the taxpayer.” |