New Scottish Labour leader Richard Leonard has become embroiled in a row with the SNP over public ownership.

The MSP, who defeated Anas Sarwar for the leadership on 18 November, made a speech alongside UK party leader Jeremy Corbyn where he argued that many Scottish services should be brought back into public ownership.

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He said public services such as “our railways, our buses, energy and Scottish Water” should return to Scottish public ownership.

However, a number of SNP politicians and journalists claimed that Scottish Water was already publicly owned, including Roseanna Cunningham MSP and former MP John Nicolson.

So who is right? Ferret Fact Service found Mr Nicolson’s claim Mostly True.

Evidence

Scotland’s water services are provided by Scottish Water, a publicly-owned company answerable to Scottish ministers.

The corporation is regulated through a number of bodies including the Water Industry Commission for Scotland, which sets the prices for water and sewerage.

It was set up in 2002 after the Water Industry (Scotland) Act amalgamated the existing regional authorities into a national statutory corporation.

Water privatisation took place in England and Wales in 1989 when Margaret Thatcher’s government turned the ten regional water authorities into private limited companies.

This did not come into force in Scotland, with water supplies remaining in public hands.

However, some aspects of water provision have since allowed involvement from the private sector.

Scottish Water inherited a number of Private Finance Initiative (PFI) contracts for sewage plants which are contracted for between 25 and 40 years. These treat around 45 per cent of Scotland’s waste water.

The Water Services etc (Scotland) Act 2005 established a new system of competition for non-household customers. This was passed into law by the Labour-led coalition at Holyrood and backed by the SNP.

This means Scottish Water does not directly manage supplying water to businesses but instead a service provider is chosen. The company added a separate retail arm – Scottish Business Stream.

Scottish Water explained the move, saying: “Under the Water Services etc. (Scotland) Act 2005, Scottish Water had to split its operation into wholesale (Scottish Water) and retail (Business Stream) units. Although ostensibly remaining a part of Scottish Water, Business Stream is working completely independently of its parent company.”

Scottish Business Stream is a subsidiary of publicly-owned Scottish Water which deals with the non-domestic water market. This covers water supply for businesses, hospitals, schools and industrial plants.

Scottish Water owns the treatment works and networks which provide water for properties and businesses in Scotland. The exception is a small number of mainly rural properties which have a private water supply. Scottish Business Stream buys these services from Scottish Water.

Scottish Business Stream initially held a near complete market share in Scotland’s non-household market, but this has reduced.

In 2015, the Scottish Government chose Anglian Water to provide water management services to the public sector in Scotland in a £350m contract. This previously made up around 25 per cent of Scottish Business Stream’s revenue.

Anglian Water now provides services for “200 Scottish public sector organisations and over 15,000 sites” including council buildings, hospitals and prisons.

In a statement after the contract was awarded, the Scottish Government blamed the enforced tendering process and EU competition rules for the contract leaving public control.

The move was criticised by opposition politicians and unions, including Unison and Scottish Labour.

Ferret Fact Service verdict: Mostly True

The claim that Scotland’s water is publicly owned is essentially accurate. The water supply is provided by state-owned Scottish Water which supplies the vast majority of Scotland. However, in 2005 the non-household market was opened up to private sector competition. This has allowed companies to bid for water services, most notably Anglian Water gaining government contracts to manage services for Scotland’s public bodies.

Mostly True

Ferret Fact Service (FFS) is a non-partisan fact checker, working to the International Fact-Checking Network fact-checkers’ code of principles. All the sources used in our checks are publicly available and the FFS fact-checking methodology can be viewed here. Want to suggest a fact check? Email us at factcheck@theferret.scot or join our community forum.

This fact check appeared in the Daily Record on 1 December.