Committee
Finance Committee, 06 Mar 2007
06 Mar 2007 · S2 · Finance Committee
Item of business
Scottish Water
That was broadly because the Scottish Executive has always budgeted for the upper limits on what Scottish Water thought it might need to borrow. I repeat my initial comment that we did not want Scottish Water to be constrained in going ahead with projects by having to come back to us to get permission. The upper limit on borrowing is fairly flexible. We are relaxed that Scottish Water came in under the borrowing requirement; there would be more of a problem if it had gone over it.
In the same item of business
The Convener (Ms Wendy Alexander):
Lab
I formally open our meeting and welcome the press and public. As usual, I ask that all pagers, mobiles and BlackBerrys be switched off. This is the last meet...
The Deputy Minister for Environment and Rural Development (Sarah Boyack):
Lab
I welcome the opportunity to discuss Scottish Water's performance. I hope that the letter from Tom McCabe—dated 20 November 2006—and my recent letter have ad...
The Convener:
Lab
I thank the deputy minister for her opening remarks and will begin by asking about something that she mentioned.We are interested in reflecting on what happe...
Sarah Boyack:
Lab
Our perspective is that it was more to do with slippage in the capital programme and, related to that, the need to get in place a vehicle to deliver the capi...
Andrew Fleming (Scottish Executive Environment and Rural Affairs Department):
No—that was fine.
Sarah Boyack:
Lab
The headline issue was a slipping capital investment programme but, in addition, we needed to get in place a vehicle to deliver it. That is the explanation o...
The Convener:
Lab
That is helpful. Questions will follow on the extent to which the development constraints that have been experienced over the past four years have been signi...
Mr John Swinney (North Tayside) (SNP):
SNP
I want to follow up on the convener's question by examining the numbers that we have in front of us. In 2002-03, the amount of borrowing budgeted for was £25...
Sarah Boyack:
Lab
There are two issues. The first is about having in place a rigorous system for working out what the priorities were on development constraints. In my opening...
Mr Swinney:
SNP
We are talking about a four-year programme and my point is that it is only in the final year of that programme that the actual borrowing figure is in any way...
Bob Irvine (Scottish Executive Environment and Rural Affairs Department):
In effect, that is what ministers have done in setting the Q and S III objectives, in which relief from development constraints has been given priority. The ...
Mr Swinney:
SNP
I say with the greatest respect that I accept that that may be correct with regard to what has happened over the past 12 months and where we are now, but I a...
Bob Irvine:
We must acknowledge that there was such a difficulty over that period. I suspect that many factors should be taken into account, one of which is the signific...
Mark Ballard (Lothians) (Green):
Green
I was not a member of the Finance Committee when the extensive discussions on Scottish Water took place in 2004. Contrary to what John Swinney said, it strik...
Sarah Boyack:
Lab
That was broadly because the Scottish Executive has always budgeted for the upper limits on what Scottish Water thought it might need to borrow. I repeat my ...
Mark Ballard:
Green
According to my rough maths, the potential borrowing was £1 billion, but only £230 million of it was spent. That seems to be a fairly substantial undershoot....
Sarah Boyack:
Lab
I suppose that it is partly because we now have a fairly consistent level of investment every year in the work that is going on. Andrew Fleming monitored the...
Andrew Fleming:
The key issue to understand is that, like all businesses, Scottish Water draws upon borrowing last, because there is a cost attached to that. It will first u...
Mr Swinney:
SNP
That rather makes my point. There are obviously projects that need to be attended to, which are creating development constraints. Why was some of that borrow...
Sarah Boyack:
Lab
I do not think that we can add to the answer that Bob Irvine gave you. If you are gearing up for a large capital programme, you cannot bring in new projects ...
Mr Swinney:
SNP
I am talking about what happened over four years, not overnight. Given the political pressure that has been applied about the volume of water investment and ...
Sarah Boyack:
Lab
I honestly cannot think of another answer that is different from the previous one.
Mr Swinney:
SNP
Right. Thank you.
Mr Frank McAveety (Glasgow Shettleston) (Lab):
Lab
Members have raised the issue of difficulties with capital investment. The other side of that is charges for customers. Could Scottish Water have considered ...
Sarah Boyack:
Lab
Our view is that we are now in a position where we are reducing charges to customers. We have lower increases than the rest of the UK and our charges have in...
Mr McAveety:
Lab
On the direction of travel for charges, how sustainable is the charging policy over a three, five or 10-year period? Do you see charges levelling out or cont...
Sarah Boyack:
Lab
We see charges continuing on a downward curve, because of the Water Industry Commission for Scotland's agreement with Scottish Water and the Executive about ...
Malcolm Chisholm (Edinburgh North and Leith) (Lab):
Lab
I will move, at least temporarily, to the future, rather than the past. Are you satisfied that in the period to March 2010, Scottish Water's investment progr...
Sarah Boyack:
Lab
We are confident that it will be not be so constrained. The challenge is to keep the pressure on ensuring that the investment programme happens. I was not pr...
Malcolm Chisholm:
Lab
Without going through all the ministerial objectives, which you helpfully outlined at the beginning, I will focus briefly on the one that relates to minimisi...