Investment Planning and Prioritisation Group report: quarter 4 2021 to 2022

Section 1 – Summary of Current Investment Maturity

The current outturn forecast of investment over the 6-year investment period is provided below (in Figure 1). This shows the maturity of investment across the period and how it has developed since the previous quarter (Q3 versus Q4). Live Investment is categorised by Plan (Gate 30-60), Prepare (Gate 70/80), Deliver (Gate 80 -120) and Non-live Investment, (Pre Gate 30). The "Deliver" category includes both projects which have been committed for delivery (post Gate 90) and those at detailed design stage but not yet committed.

A tabular view of the data represented in the figures is available in Appendix 1, this also contains the Indexation (RPI 2020 and 2021, CPI from 2022 onwards) assumption assumed within the Delivery Plan.

Investment for Quarter 3 and Quarter 4 for each year of the investment period categorised by Tier 1a and Tier 2 investment is shown in Figure 1. This includes an allowance for risk associated with the potential additional cost increase of the SR15 Completion programme during the initial years of the investment period.

At the end of Quarter 4 2021-22 Scottish Water's total investment for the year was £799million within the Delivery plan range of £790m - £830m. Tier 2 Investment in the year was £623m, within the delivery plan range of £570m - £650m.

As we enter Year 2 (2022-23) we have £820m of total investment which includes £669m of Tier 2 investment passed Gate 30. £566m of the Tier 2 investment is beyond Gate 70 and is already with our deliver teams. This level of investment provides confidence that the Year 2 investment levels, as set out in our 2021-22 Delivery Plan of £610m to £680m, will be achieved and we are now increasing the maturity of investment in Year 3 (2023-24).

Investment for Quarter 3 and Quarter 4 for each year of the investment period categorised by Plan (Gate 30-60), Prepare (Gate 70/80), Deliver (Gate 80 onwards) and Non-live Investment is shown below (Figure 2). The "Deliver" category includes projects which have been committed for delivery (post Gate 90) and those at detailed design stage but not yet committed.

The data shows how the investment has matured over the past Quarter. As expected there is more Live investment in the early years and the comparison between the quarters show that the movement that has happened in the Quarter. For example in Quarter 4 we have seen the Year 3 investment in Prepare and Delivery increase from £327m to £517m and a further £200m in Plan. For later years the majority of investment is Non-Live and we expect this to mature as inspections and investigations trigger the development of investment.