WICS praises Scottish Water's performance – but warns of longer-term risk

(by Karma Loveday)

Scottish Water achieved its highest overall service score to date in the 2024-25 assessment of its performance in by the Water Industry Commission for Scotland (WICS), the regulator’s fourth annual report of the 2021-27 period.

The company secured its highest-ever Outcome Performance Measure score, improving in eight of nine measures, including supply interruptions, low-pressure incidents and serious pollution events. WICS noted that favourable weather conditions supported improved service levels.

Drinking water quality remained strong at 99.9% and customer satisfaction remained stable (high), with developer satisfaction also continuing to improve.

Scottish Water broadly maintained its investment programme, with £2.825 billion invested to date, and opex broadly on track.

All of that was delivered for the second-lowest average household bills in the UK. That was due to Scottish Water applying smaller increases than allowed over the first four years of period to support customers during the cost of living crisis. However, that resulted in it collecting £250m less revenue than expected, albeit that was mostly offset by £220m of savings on financing costs and other expenditure, £120m of which related to interest benefits.

However, WICS highlighted the following risks around Scottish Water’s longer-term commitments:

• Capital investment for the 2021–27 period was forecast to be around £4.45bn, which is around £400m below the level assumed in the final determination. Along with the revenue shortfall, this also reflects rising costs. WICS said the gap could reduce to £300m if Scottish Water maintains strong financial and operational performance.

• Work to reduce carbon emissions is behind the milestone set out in the Net Zero Routemap, with a 52% reduction achieved against a 60% target. 

• Scottish Water has also indicated that it is unlikely to deliver all 108 high-priority unsatisfactory wastewater discharges by December 2027, although it expects to complete the majority.

• Leakage levels, household water consumption and discharge permit compliance are higher than the industry average across Great Britain.

WICS is introducing a broader set of performance measures as part of its approach for the 2027-33 regulatory period.