Fear over Scottish Water's future

The unions fear Scottish Water's future could be under threat

Unions have voiced fears that Scottish Water could be privatised and its future threatened by "unreasonable demands" from regulators.

They said a failure to get pricing limits right could damage services and even put public health at risk.

The Water Industry Commission's new charging regime has been the unions' main concern.

However, the Scottish Executive said it remained committed to keeping Scottish Water in the public sector.

The regional secretaries of Amicus, GMB, Unison and the T&G said there was a multi-million pound shortfall in vital investment, adding that Scottish Water must be given fair targets and adequate funding when the new commission unveils its plans on Wednesday.

Scottish Water has proved it can match many of the private English water companies on efficiency and price Unions' statement

The commission has been set to reveal how much money the company can raise from water and sewage charges, on top of borrowing from the executive, to meet ministers' investment objectives outlined in February.

These objectives, including improved drinking water for 1.5 million Scots and the cleaning up of 330 miles of rivers and coastal waters, have been earmarked for delivery by 2014 without any above-inflation rises in customers' bills before 2010.

In June, the then Water Industry Commissioner Alan Sutherland, now chief executive of the successor commission, said the 2006-10 investment plans, which Scottish Water had costed at £3.3bn, could be delivered for £2.1bn.

'Economic zeal'

In a joint statement, the unions said: "We will not allow unreasonable demands from the Water Industry Commission to undermine the future of a public water service in Scotland.

It is claimed there has been a multi-million pound investment shortfall

"We will fight to keep Scotland's water in public control.

"Scottish Water has proved it can match many of the private English water companies on efficiency and price.

"What has taken 17 years to achieve down south has been achieved in four years in Scotland.

"We won't let that be ruined by the misconceived economic zeal of the regulator."

The unions highlighted an academic study, published last year, which argued that Mr Sutherland had used flawed methods in drawing up his strategic review of charges for 2002-06.

In June, Scottish Water said it was running the industry for nearly £2m a week less than its predecessors did three years previously.

It is in everyone's interest that the right financial framework is put in place Scottish Water spokesman

The company - which increased domestic water prices by 2.8% this year - said the £283 average bill was lower than six of the 10 firms in England and Wales.

No-one from the commission was available to comment on the unions' concerns.

However, a Scottish Executive spokeswoman said: "It is in the customers' interest to have an independent regulator to ensure that Scottish Water's investment programme can be delivered at the lowest cost to consumers."

Scottish Water said it could not comment on the commission's targets before they were announced on Wednesday.

However, a spokesman said: "Tremendous progress has been made transforming the water industry over the last few years.

"It is in everyone's interest that the right financial framework is put in place to allow us to continue to deliver improvements for our customers over the next four years."