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Chamber

Meeting of the Parliament 04 September 2025

04 Sep 2025 · S6 · Meeting of the Parliament
Item of business
Water Industry Commission for Scotland (2022-23 and 2023-24 Audits)
Ruskell, Mark Green Mid Scotland and Fife Watch on SPTV

I join members in thanking the Public Audit Committee. I am not a member of the committee, although I sit on the Scottish Commission for Public Audit. The work that the Auditor General for Scotland has done underlines the importance of Audit Scotland and the AGS. I thank the convener for his powerful comments at the beginning of the debate.

Reading the committee’s report, the word “egregious” springs to mind. At the root of a raft of bad decisions by WICS, there was clearly a lack of focus on its core role as a public body and a deep cultural problem within the organisation. WICS had been encouraged by the Scottish Government to expand its remit into acting as a private sector consultancy on the international stage. Unfortunately, with that came a total indifference to upholding the standards that are required of a public body. There should have been no confusion at all on the part of the chief executive officer, the chair and the board—they should all have known better. The Scottish Government’s arrangements should have worked to rein in excessive and inappropriate spending from day 1, and the Government should have heard the alarm bells ringing far earlier.

The fact that the chief executive officer at the time resigned to avoid scrutiny by the Public Audit Committee is distasteful—that his pay-off cost the taxpayer more than £100,000 even more so. The £70,000 Harvard training courses, funded masters in business administration, £200 dinners and Christmas gifts are all symptoms of an organisation that had lost its sense of responsibility to act in the public interest and deliver value. The whole affair has undermined trust in the regulator and has been damaging to the water industry in Scotland more broadly. However, I am pleased that lessons have now, belatedly, been learned. The organisation has been refocused back on to its public role and will move forward, with further monitoring from the Auditor General.

As Sarah Boyack outlined, now is the time for a renewed focus on the water industry and its regulators. It is 20 years since the Water Environment and Water Services (Scotland) Act 2003 was passed, which established WICS. We are also in the early days of a climate crisis that will be driving huge investment decisions for generations to come. The director general net zero told the committee that WICS provides

“the impetus to deliver on efficiency savings, reduced taxpayer bills and the improvement of the asset”,—[Official Report, Public Audit Committee, 19 February 2025; c 68.]

but there is no fundamental reason why that impetus cannot come directly from Government, with no economic regulator in place. Arguably, WICS helped to bring a focus to Scottish Water in those early days, especially in reducing costs and improving performance. However, is it still fit for purpose? Why cannot that regulatory capacity be built within Government? Other states around the world regulate their nationalised utilities by Governments setting out formal agreements on performance, pricing and other obligations. They manage to focus on improving governance, robust auditing and citizen engagement, without an economic regulator. They manage to get the balance right between the necessary technical decisions and the more political choices.

When WICS was established, at a time when the Scottish Executive was flirting with privatisation, Ross Finnie, the Lib Dem minister, was keen on turning Scottish Water into a mutual, like Welsh Water—public on the outside and private on the inside. In effect, it would have been a public shell company with a business being operated by private contractors. I can see the benefit of an economic regulator in that context, but that is not a model that was ever fit for Scotland. Moreover, the context of the water industry has changed dramatically around the United Kingdom, even in just the past couple of years. With a water bill inevitable in the next session of the Scottish Parliament and further regulatory reforms coming in England, it is time to consider whether WICS is still fit for purpose.

It is a separate issue from the historical bad practice that the Auditor General has reported on, and it should remain so, but there are broader questions about the future of water industry regulation in Scotland, and we should not be afraid to discuss them.

In the same item of business

The Deputy Presiding Officer (Annabelle Ewing) SNP
The next item of business is a debate on motion S6M-18680, in the name of Richard Leonard, on behalf of the Public Audit Committee, on the 2022-23 and 2023-2...
Richard Leonard (Central Scotland) (Lab) Lab
Being the convener of the Public Audit Committee is a privilege, and it is one which I will never take for granted. So I am grateful to be opening this after...
Graham Simpson (Central Scotland) (Reform) Reform
On that last point, does the convener agree that the committee never had an adequate explanation as to why the limit was removed?
Richard Leonard Lab
I thank Graham Simpson, who has been a very active member of this inquiry by the committee. I agree with him that there are still many unanswered questions. ...
The Cabinet Secretary for Climate Action and Energy (Gillian Martin) SNP
I am grateful for the opportunity to speak about the matters that are raised in the Public Audit Committee’s report on the Water Industry Commission for Scot...
Jamie Greene (West Scotland) (LD) LD
I make this intervention as a member of the Public Audit Committee rather than as its deputy convener. What do the failures of governance at executive or sen...
Gillian Martin SNP
Jamie Greene makes a fair point, which is one of the reasons why we carried out a review of the sponsorship arrangements between the Scottish Government and ...
Douglas Lumsden (North East Scotland) (Con) Con
Has there been any review of other organisations to see whether there have been other breaches of policies and processes similar to those that we have seen a...
Gillian Martin SNP
As I said, the sponsorship arrangements between the Government and public bodies have been completely reviewed. As part of that, we are ensuring that there a...
Sarah Boyack (Lothian) (Lab) Lab
One of the committee’s key recommendations was that a robust whistleblowing policy should be put in place for staff. It is one thing to have a sponsorship te...
The Deputy Presiding Officer SNP
It would be helpful if you could bring your remarks to a close soon, cabinet secretary.
Gillian Martin SNP
Sarah Boyack makes a very good point. One issue that was uncovered was that those in the lower ranks at WICS were afraid to speak out. That was part of a cul...
Douglas Lumsden (North East Scotland) (Con) Con
It gives me no pleasure to make this my first speech after recess. I thank the committee for its forensic analysis of what went wrong at WICS. I welcome the...
Gillian Martin SNP
I invite Douglas Lumsden to tell me what was missing in my speech. What more would he like to see from me by way of answering any of the questions in the rep...
Douglas Lumsden Con
The first thing that I would like to hear is an apology to the people of Scotland for all the money that has been wasted. WICS was under the remit of the Sco...
The Deputy Presiding Officer SNP
Always speak through the chair.
Douglas Lumsden Con
I would like to know whether the Scottish Government is doing a full review of all organisations to see whether such a culture exists in other places. Outsid...
Mark Ruskell (Mid Scotland and Fife) (Green) Green
Made a request to intervene.
The Deputy Presiding Officer SNP
The member is concluding.
Douglas Lumsden Con
That is set against the SNP Government’s never-ending preaching on what it thinks is best for the Scottish public. The cabinet secretary should hang her head...
Sarah Boyack (Lothian) (Lab) Lab
I thank the members of the Public Audit Committee for their work, and the clerks to the committee for their support. This is a damning committee report. Th...
Mark Ruskell (Mid Scotland and Fife) (Green) Green
I join members in thanking the Public Audit Committee. I am not a member of the committee, although I sit on the Scottish Commission for Public Audit. The wo...
The Deputy Presiding Officer SNP
We move to the open debate. I advise back benchers seeking to speak in the open debate that I require speeches of up to four minutes. 16:14
Colin Beattie (Midlothian North and Musselburgh) (SNP) SNP
I begin by thanking my colleagues in the Public Audit Committee, and the committee clerks, whose hard work helped to produce the report. The report is about ...
The Deputy Presiding Officer SNP
I call Tim Eagle, who is joining us remotely. 16:18
Tim Eagle (Highlands and Islands) (Con) Con
I apologise for not being able to be present in the chamber for this debate. I intend to keep my remarks brief, as Douglas Lumsden outlined perfectly the man...
Monica Lennon (Central Scotland) (Lab) Lab
I suspect that most of my constituents had never heard of WICS until this scandal erupted. Many more of them are now aware of this important regulator becaus...
Elena Whitham (Carrick, Cumnock and Doon Valley) (SNP) SNP
I, too, thank the committee for its dogged investigation into the matter. Proper spending of public money is of the utmost importance. The principle is not o...
Graham Simpson (Central Scotland) (Reform) Reform
Let us be clear: this was a major scandal. We have had some robust meetings, but these were some of the most astonishing meetings that I have ever been invol...
Douglas Lumsden Con
Will the member take an intervention?