This item was published during the term of a previous administration that ended in April 2007
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Scottish Water Chair resigns
20/02/2006
Ministers today called on Scottish Water to produce a plan that will allow it to deliver all of the improvements required of it for 2006-2010 following the resignation of the Chair, Professor Alan Alexander.
A delivery plan submitted by Scottish Water on February 1 has been judged by Ministers and Scottish Water's regulators as falling short of their requirements in a number of material respects.
Professor Alexander believes the company's plan is fully compliant and, in view of that disagreement, he has today resigned as Chair of Scottish Water.
Environment Minister Ross Finnie said:
"I thank Alan Alexander for the considerable role he played in merging the three former water authorities to create Scottish Water. Real progress has been made but we are not agreed on the way forward and he has decided to step down.
"We will move quickly to appoint an interim chair who will be tasked with ensuring that Scottish Water delivers the requirements placed on it within the charge limits set by the Water Industry Commission.
"We set Scottish Water objectives to improve customer service, deliver further improvements in drinking water quality, improve environmental compliance and support new housing and economic developments
"We now need urgently a plan for delivering these improvements that command the confidence of Ministers, its regulators and its customers."
Last November the Water Industry Commission, Scottish Water's independent economic regulator, announced limits on Scottish Water's charges for 2006-10. This meant that average water bills would rise by less than inflation and that Scottish Water would be able to deliver all of the Executive's objectives for higher standards and increased strategic capacity in the period.
Scottish Water had the option to seek higher charges by having the Commission's decision referred to the Competition Commission. It announced on 27 January that it would not seek a referral. Consequently, it was required by the Executive to submit a delivery plan setting out how it would deliver all of the Executive's objectives within the financial limits set by the Commission. It sent a plan for 2006-10 to the Executive on February 1, 2006.
The Executive considered the plan carefully and concluded that it did not set out satisfactorily how Scottish Water would deliver all of the objectives in full, within the charge limits allowed by the Commission. This was unacceptable to the Executive. In addition, Scottish Water's regulators, the Commission, SEPA and the Drinking Quality Regulator, expressed material reservations about the plan.
In these circumstances, the Executive decided that Scottish Water must produce a new plan that commands the confidence of the Executive and the regulators. Professor Alexander was informed of this decision and in light of it said that he would step down with immediate effect to allow a change in the leadership of Scottish Water to take place quickly.