Ministers criticised over £360m Anglian Water Business contract

The contract affects billing and meter reading and not the supply of water

The Scottish government has been criticised for awarding a £360m contract to a private water company.

Billing and meter reading services for council buildings, hospitals and prisons had been run by an Edinburgh-based subsidiary of Scottish Water.

However, from January it will be run by Anglian Water Business (AWB).

The Scottish Green Party leader Patrick Harvie said delays in awarding the contract had led to months of uncertainty.

But Infrastructure Secretary Keith Brown said he believed Anglian Water Business could save the public purse up to £40m.

He pointed out that Scottish Water would continue to provide the water supply.

The existing contract with Scottish Water subsidiary Business Stream had been due to expire on 31 March.

But the Scottish government extended the deadline, saying it would "allow all of the bidders to consider initial feedback and provide on-going service to public bodies".

'Best deal'

Mr Brown 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.

"New staff are being recruited in Scotland to manage the new contract and we have secured a Living Wage guarantee.

"In addition, AWB will more than double their Edinburgh workforce, as well as planning for new apprenticeships and trainees."

He added: "But the biggest benefit of all will be the money that can be ploughed back into the services provided by those buildings - the schools, hospitals and public offices - throughout Scotland."

'Very disappointed'

Business Stream said it was "very disappointed" by the outcome of the contract award.

Chief executive Johanna Dow said: "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."

Scottish Labour public services spokeswoman Jackie Baillie said the decision had "effectively privatised water management for our schools and hospitals".

She added: "The SNP government extended this decision beyond the general election because they knew it would be politically embarrassing to hand this contract to a private firm rather than the publicly owned Scottish Water."

Dave Watson, from Unison, said the union was "deeply disappointed" at the deal.

He added: "In fairness, the Scottish government had few options because the system of retail water competition is the ultimate in market madness.

"£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."

"We have always said that Scottish Water should stay in Scotland in public hands it works, is good value for money and water customers support the corporation staying in public hands."