Scottish Water invested a record £886 million in the last year – but the water company is warning it will need higher investment levels in future to maintain vital services in the face of a changing climate and ageing water and waste water assets.
The warning has been highlighted in Scottish Water’s Annual Performance and Prospects report, which covers the 2022/23 financial year.
Writing in the report, Douglas Millican, the former Chief Executive of the publicly-owned organisation – who stood down on May 31 - said that despite investment levels increasing significantly in the last two years the utility was currently investing around only 40% of the necessary long-term replacement rate.
He said:
“We owe it to our customers to be honest with them about the cost of delivering the services they rely on and expect, and will continue to expect, and keep transitioning towards a more sustainable future.
“There is not a stand-still option. Assets are ageing and need replacing. Our climate is changing and we must adapt.
“As with all our investment programme, we need to decide which areas are the greatest priority for investment with the resources we have. And, as with most things, people across Scotland will have differing opinions on what they should be. We will continue to work with communities to listen to their views and work with partners, including local authorities, to introduce sustainable infrastructure”.
The report has also highlighted how Scottish Water delivered sustained levels of drinking water quality and environmental performance, despite a number of serious challenges caused by extreme weather patterns.
The former Chief Executive flagged up the use of Combined Sewer Overflows (CSOs), which are designed to spill at times of very heavy rainfall an area of growing concern and said the utility was committed to doing more to better protect Scotland’s rivers and coasts.
Douglas Millican commented:
“CSOs are very much in the spotlight just now with considerable media coverage, and in turn public attention, on the issue of CSO spills and river health.
“We are committed to building on the improvements already made and doing more to further protect the water environment where we are making progress with implementing our Improving Urban Waters Routemap. This will see us invest up to £500 million in the waste water system, including treatment works and CSOs, to improve the quality of waste water discharges and protect rivers and coastal environments.”
He highlighted how Scotland already has one of the best quality water environments in Europe with 87% of waterways achieving “good’ or better condition” for water quality but said it was vital more was done to protect water bodies.
The report also highlights how Scottish Water has started to install monitors on CSOs to provide better data on spill events and aims to have 1,000 of them in place at high priority sites across the country by the end of next year. Technology will also be fitted upstream in some areas to reduce the risk of overflow spills.
The new report also reveals that the utility had delivered cumulative emissions reduction in the last two years of 15,681 tCO2 e, despite a number of challenges including global supply chain issues and third party issues regarding access to peatland restoration area needed to reduce carbon loss.
Douglas Millican said the company remains focused on achieving the long-term targets in its Net Zero Routemap, an ambitious plan to reach Net Zero carbon emissions by 2040 and that in the last year Scottish Water had delivered more energy efficiency projects and several renewable energy projects.
In 2022/23 Scottish Water worked with 400 suppliers to deliver its investment programme. Three quarters of its suppliers were Small Medium Enterprises (SMEs) - and 90% of the annual spend was on organisations located in Scotland.
Click here to read the Annual Report 2022/23 in full