24 February 2006
The chair of Scottish Water has resigned following a dispute with ministers over the utility's £2bn investment plan for the next four years.
Professor Alan Alexander stood down this week after Environment Minister Ross Finnie said that the investment plan fell short of ministers' and regulators' requirements 'in a number of material respects'.
The surprise resignation will require the plan to be revised. 'We now need urgently a plan for delivering these improvements that commands the confidence of ministers, its regulators and its customers,' Finnie said.
Alexander had been chair since the quango was set up four years ago to replace three separate regional water authorities. In a brief statement, he said: 'I am sorry to be leaving Scottish Water over this difference of opinion.
'However, I am pleased to have delivered significant improvements in the water industry in Scotland over the past four years.'
Alexander's departure comes in the wake of problems that arose last November when the Water Industry Commission in Scotland, headed by Sir Ian Byatt, ruled that Scottish Water's investment should be reduced from £3.3bn to £2.15bn and that charges should rise by 0.5% less than inflation.
Scottish Water had the option of having the commission's decision referred to the Competition Commission, but it announced last month that it would not seek a referral.
As a result, the Scottish Executive asked it to submit a plan explaining how it would meet all the Executive's objectives within the commission's financial limits. Scottish Water sent its plan, covering 2006 to 2010, on
February 1.
But the Executive concluded that the plan did not meet its requirements. In a statement, it said that Scottish Water must produce a new one that commanded the confidence of the Executive and the regulators.
A spokesman said: 'Professor Alexander was informed of this decision and in the light of it said that he would step down with immediate effect to allow a change in the leadership of Scottish Water to take place quickly.'
It is understood that Alexander took the view that the utility's plan did fulfil its obligation, and so he decided to quit.
Finnie said the Executive would appoint an interim chair to ensure that Scottish Water met its objectives within the commission's limits.
PFfeb2006
