Public Services Management: Rebellion north of the border: Scottish landowners, trade unionists and even Tories seem united against water privatisation. Liza Donaldson explains

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The Independent Online
'IF THE Government were to privatise water in Scotland the level of civil disobedience would be far greater than that seen under the poll tax.' The view of a senior council official is widely held north of the border. The privatisation option, one of eight on the future of water and sewerage in Scotland put forward by the Government, has raised the hackles of even loyal Conservative supporters.

Councillor John Young, chairman of the Association of Scottish Conservative Councillors, said his personal opinion was against privatisation and that 'any attempt to introduce privatisation would make the poll-tax problems look like a Sunday picnic'. At the opposite political pole, Roseanna Cunningham of the Scottish National Party, a lawyer, has declared that she would be prepared to go to jail to prevent the hated concept of privatisation being foisted on the Scots.

Opponents can count on the support of personalities such as the actors Tom Conti and Bill Paterson and the QC Helena Kennedy - and overwhelmingly on the public. More than 85 per cent of the 5,000 responses to the Government's consultation paper, Investing for our Future; Water and Sewerage in Scotland, came from private individuals. Poll after poll has shown nearly 90 per cent of the public against privatisation.

Ian Lang, the Secretary of State for Scotland, has said he will pronounce on the matter before Parliament rises on around 23 July. But why is it such an emotive issue for the Scots? The reasons are an explosive mix of the lessons drawn from water privatisation in England and Wales. The proposed changes touch on things dear to Scottish heart: a shared public heritage of water and sewerage service ownership managed for the common good by the 12 island and regional councils; questions over the most economical use of money; and fears about the future prospects of sports such as angling and of the water-using industries. The Malt Distilling Industries Association in particular opposed privatisation, its members depending on pure water for whisky - a name derived from Gaelic for the water of life.

The Government argues that change is necessary because it is reorganising local government into single-tier, instead of two-tier, authorities. To achieve its goals of highest quality services at lowest cost to the consumer, it says it will need to invest pounds 5bn over the next 15 years or so. Privatisation of services, Mr Lang told BBC radio, has 'major advantages' because 'it reduces the pressure on the Government's expenditure programme and borrowing requirement'. It is also, he added, 'a more advanced and varied science than it was 12 years ago'. This explains the other private sector option of franchising. Five public sector options and a hybrid alternative make up the eight choices set out.

Most comment has been directed against privatisation and in favour of continuing local authority control, according to an analysis by Scottish and Westminster Communications. A 16- page supplement in the Glasgow Evening Times highlighted some of the worst aspects of privatisation in England and Wales: metering; higher bills than Scotland, with average rises 5 per cent more than inflation since privatisation; and disconnections - outlawed in Scotland - running at 20 per cent more than before.

One story - headed 'Where the victims of cut-offs wallow in their own dirt, the men who head the profit- driven water boards are getting filthy rich' - denounced as exorbitant the salaries of some chairman of the 10 privatised water companies, who earn up to pounds 169,000 a year, with preferential share perks worth a total of pounds 7.5m. Scottish public sector water chiefs' salaries, between pounds 40,000 and pounds 80,000 a year, look modest by comparison.

The full costs of privatisation in England and Wales were also unearthed. Following a critical Committee of Public Accounts report into the sale, John McAllion, Labour MP for Dundee East, calculated that far from saving public money, privatised companies in England and Wales had enjoyed a write-off of pounds 5.5bn capital debt, a 'green dowry' of pounds 1.5bn and tax allowances running into the next century - in gross, pounds 14bn. The public purse received pounds 3.5bn from the sale - a net loss of pounds 10.9bn.

Citizens Advice Scotland warned of the public health risks of disconnections, citing a Midlands tower block where water was cut off and excrement thrown from windows. CAS urged that 'the problems encountered in England must not be repeated here'.

Meanwhile the Scottish Landowners' Federation, a non-political organisation on the centre-right with 3,600 members, came out publicly against privatisation. It said that it would rather the money paid in water and sewerage bills was invested in better services than creamed off by shareholders. The Scottish Trades Union Congress held a mass march through Glasgow in January to mark the end of the short 10-week consultation period spanning Christmas - a timetable so tight that even the Confederation of British Industry Scotland, which favoured keeping water in the public sector - had difficulties meeting.

The Scottish Association of Directors of Water and Sewerage Services (SADWSS), a far from militant group, warned that it would be 'impossible to achieve a satisfactory transition to the private sector in the time available' and that 'the evident strength of public and political opposition would put the service at risk during and after transition'. The chairman, Rod Rennet, warned that a poll tax- style non-payment campaign could have 'a devastating effect' on the operation of water and sewerage, and that implementation of EC directives on drinking, bathing and urban waste water could be delayed by any wholesale change to the system.

SADWSS argues that franchising is 'the worst possible option', 'a recipe for the disintegration of the service', and points to 'public disquiet' over the regulatory system down South. It puts the case for remaining in the public domain, controlled by consumer-friendly councillors, but recognises that reorganisation into three large water/sewerage bodies might be a possible outcome.

The Convention of Scottish Local Authorities (Cosla) points to surveys which showed 89 per cent of consumers in Scotland were very or fairly satisfied with their water services, compared with 73 per cent in the south of Britain. Cosla claims that financial considerations are at the heart of the water shake-up. However, it says arguments about adding to Public Sector Borrowing Requirement (PSBR) are spurious. It demonstrates that water and sewerage services are self-financing, paid for from fees and charges to consumers - at an average well below those in England and Wales, with capital borrowed from the markets, European Investment Bank or Public Works Loan Board. While not disputing that large investment is needed, it argues that the Government has changed the rules regarding private investment for its own capital expenditure projects. 'There is nothing whatever to stop a similar change in the rules governing capital expenditure in water and sewerage services in Scotland,' Cosla tartly notes. Strongest of all, it argues for continuing democratic control of councils. John Connolly, a Labour councillor and Cosla's water and sewerage committee convener, said: 'The Scottish people are saying: leave the service with democratically elected and non-profit-making local authorities.'

John Young of the Association of Scottish Conservatives agrees: 'Accountability is the crux of the matter. You can kick out councillors if you don't approve of them. With water board chairmen, who in some cases have had obscene pay rises, you can't do that.' Above all: 'We don't want to be dragged kicking and screaming to follow England.'

(Photograph omitted)