Investing in and paying for water services: consultation

Annex C – Ministerial Objectives - Final Draft

Statement of Proposals – Investing in Water and Wastewater Services 2021-27

Investment Areas

1. Long Term Water Sector Vision

Ministers are supportive of the long term vision set out by the water industry (see Annex A below) and ask that Scottish Water take the lead in working with partners, and engaging with customers and communities, to start to pursue action towards its realisation.

2. Standards of service

Ministers expect that current levels of service shall be maintained or improved over the long term. They expect Scottish Water to engage with stakeholders and customers to establish appropriate standards of service for the 2021-27 regulatory period, and beyond, and to report annually on performance against these standards. They also request that performance assessment criteria are reviewed to ensure that they remain fit for purpose.

3. Asset Maintenance

Ministers recognise that maintaining high levels of performance are dependent onadequate maintenance, and when appropriate, replacement of existing assets. Theyrequest that Scottish Water develops an evidence-based strategy that will inform thelong term asset replacement needs of the industry. The strategy should also set outthe programme being undertaken to understand the condition of assets in particularthose of a critical nature for maintaining service delivery.

This strategy mustcommand the confidence of Scottish Water's regulators and ensure that assetmaintenance is fully integrated with other areas of the investment programme.

4. Supporting Sustainable Economic Growth

To support the Scottish Government's purpose to increase levels of sustainable economic growth, Ministers confirm that Scottish Water should continue to invest in water, sewerage and drainage infrastructure to provide capacity to enable development.

Ministers recognise that, in a number of locations in Scotland, the levels of headroom available to accommodate new demand is not sufficient to support future forecast demand for capacity. They ask Scottish Water to work with stakeholders to influence strategic development in areas where there is already capacity and to consider all possible measures to release capacity in existing assets before requiring enhancement of water and wastewater infrastructure.

Ministers recognise that a small percentage of Scotland's population currently relies on private water and sewerage arrangements. In line with their commitment to delivering the United Nation's Sustainable Development Goal 6, Ministers expect that Scottish Water will work with the Scottish Government to support the Government's objective of ensuring reliable and sustainable rural water and waste water services.

5. Circular Economy

Ministers wish Scottish Water to consider opportunities highlighted in Scotland's strategy "Making things last" and to apply the principles of a circular economy to water and wastewater services, in particular exploring the potential for resource recovery from sewerage.

6. Drinking Water

Ministers expect Scottish Water to comply with drinking water quality duties, ensuring that plans are in place to address failures, including the risk of failures, of standards in the interests of further enhancing public health protection. They also request that the plans already developed to address the resilience of supplies be updated and that progress be made to secure further improvements.

In the light of expert advice from the World Health Organisation, Ministers request that Scottish Water develops investment plans to remove contact of potable water with lead pipes in its network. These plans should be informed by studies and pilots undertaken in the 2015-21 period, should ensure Scottish Water delivers water which is compliant with the lead standard and regulations, and should highlight the continued removal of lead as a priority for the 2021-27 period. In developing and pursuing action towards the water sector vision, Ministers expect Scottish Water to play a leading role in collaborating with the Scottish Government, DWQR and other stakeholders towards a lead-free Scotland.

7. Environment

Ministers expect Scottish Water to build on the current level of compliance with its environmental licences, by continuing to develop and implement investment plans that address risks of impacts on the environment from its assets.

Ministers have set out, their objectives for Scotland's water environment in their River Basin Management Plan (RBMP), in particular, how public bodies, businesses and land managers will work together to protect and improve the environmental quality of Scotland's rivers, lochs and seas over the period to 2027. They request that Scottish Water, as a key player, sets out in its 2021-27 Delivery Plan how improvements to water and sewerage infrastructure in the period 2021-27 are expected to contribute effectively to the RBMP objectives. Regular updates from Scottish Water should then detail the progress it has made towards delivering its RBMP obligations.

Ministers commend Scottish Water's efforts to develop drainage and wastewater management plans so as to gain a better understanding of the performance of sewer networks and to plan for improvements. They expect these to be further developed with a view to limiting the amount of plastics reaching the water environment through these routes.

Ministers recognise that pollution of the water and marine environment arises, not only from assets but also from product design and customer behaviour. They request that Scottish Water supports SEPA in working with the manufacturing sector, the Government, customers and stakeholders to control, at source, plastics and priority substances.

8. Flooding/Surface Water Management

Scotland needs to focus on surface water management to address customer flooding, water quality issues, climate change and growth. Ministers commend the partnership working between Scottish Water and Local Authorities to develop a greater understanding of the performance of drainage and sewerage networks. Ministers request that Scottish Water pursue further partnerships with Local Authorities and other stakeholders to develop delivery and assurance arrangements that will secure improvements to storm water management, including those for which joint delivery solutions will be required.

9. Security & Resilience

Ministers request that strategies and plans are developed and acted upon, in order to maintain and improve the security of Scottish Water's network and systems, and protect them from malicious attack.

Similarly, they request strategies and plans be developed and acted upon, subject to appropriate prioritisation, to maintain and improve the resilience of the Scottish Water network to best ensure continuity of service.

Such strategies and plans should be prepared in line with advice from Government security advisers and informed by industry best practice.

10. Climate Change, Adaptation and Mitigation

Scotland is already feeling the impacts of climate change. Ministers request that Scottish Water ensures that it understands the impacts of climate change on its assets and implements its plans for adaptation measures necessary to protect services.

In response to the Scottish Governments recognition of the global climate emergency, Scottish Water committed to achieve net zero emissions by 2040 and to increase the renewable energy generated or hosted on its land and assets to 300% of its annual energy usage by 2030. In line with these commitments, Ministers expect Scottish Water to develop and implement a strategy that will see it take a leadership role in utilising its land and assets, and working with others. In doing so it should make substantive progress in the 2021-27 period and ensure it is on an appropriate trajectory to meet or exceed these targets.

Ministers support the introduction of Scottish Water's network of Top Up Taps. Ministers ask that Scottish Water continue to work with customers and the wider industry to support measures that reduce water use in homes and businesses, and ensure only appropriate items are flushed down the toilet or put down the sink.

Before the end of 2020 Ministers expect Scottish Water to commission a competition amongst all Scottish Universities for the creation of a new Chair under the title of 'Scotland the Hydro Nation: Chair of Water Studies'. Once appointed, Scottish Water should continue to support the Chair throughout the 2021-27 period, ensuring they receive appropriate financial support, which will help the water industry manage the challenges of climate change and the transition to net zero emissions.

11. Private Finance Initiative funded Projects

Ministers recognise that 3 of the 9 PFI contracts mature in the period 2021-27. They request Scottish Water develops plans to manage these contracts to secure the best value for money for the future operation of these facilities. Plans should be prepared for contracts that end in the period following 2027.

Annex A

Water Sector Vision

Scotland's water sector will be admired for excellence, secure a sustainable future and inspire a Hydro Nation.

Together we will support the health and wellbeing of the nation. We will ensure that all of Scotland gets excellent quality drinking water that people can enjoy all of the time. Scotland's waste water will be collected, treated and recycled in ways that generate value and protect the environment. We will enable the economy to prosper.

We will transform how we work to live within the means of our planet's resources, enhance the natural environment and maximise our positive contribution to Scotland achieving net zero emissions.

We will involve and inspire Scotland's people to love their water and only use what they need. We will promote access to the natural environment and encourage communities to enjoy and protect it.

We will be agile and collaborate within the sector and with others to be resilient to the challenges which will face us. We will keep services affordable by innovating and delivering the greatest possible value from our resources, helping those who need it most. We will serve all customers and communities in a way that is fair and equitable to present and future generations.

We are a vital part of a flourishing Scotland.