Water merger plans tabled

The moves could lead to standardisation of charges

Environment Minister Sam Galbraith has unveiled plans to merge Scotland's three water authorities.

Mr Galbraith said the move was designed to help the industry fight off private competition and would result in savings of £100m a year.

The new body, to be called Scottish Water, will set a uniform water rate for the whole of Scotland.

However, the minister revealed that water bills, which have risen sharply in the last two years, would have to continue to go upward to pay for £2bn of environmental improvements.

Sam Galbraith: Savings in the pipeline

He also said discussions would take place with the unions representing the 6,000 water workers but he hoped redundancies would be kept to a minimum.

The minister signalled the Scottish Executive's intention to move to a single authority during a meeting at the Scottish Parliament's transport and environment committee.

The committee has been conducting an inquiry into the water industry to assess the effects of planned changes which could see increased competition for some water services from the private sector.

Mr Galbraith said: "Our conclusion is that substantial change in the way the authorities operate will be needed whether these opportunities are captured by collaborating within single structures or by moving to a single authority.

"But a single authority, with a single board and management, is a more reliable way of delivering the improvements."

He added it would be better equipped to compete and enable it to use the managerial talent in the Scottish industry to best effect.

He insisted there was a need for the water industry to achieve efficiency and become more competitive.

Broad welcome

Highlands and Islands MSP Maureen Macmillan said: "I am happy to hear that the executive is committed to a single authority as it will be of great benefit to the north."

North of Scotland Water Authority chairman Colin Rennie said: "The creation of Scottish Water is the only option if we want to secure the survival of a public water authority in Scotland.

"Scottish Water would be big enough to beat off competition from south of the border.

"It will also provide a fairer charging system where everyone shares the cost of delivering services to remote rural areas, not simply those people living in urban areas of Grampian and Tayside."

The proposed changes were broadly welcomed by opposition MSPs.