The Scottish Building Federation (SBF) has today put its weight behind mounting calls for Scottish Water to be restructured in a way that would allow it to raise funding via the open markets.

SBF Chief Executive Michael Levack argues that any money saved from restructuring the utility should be ploughed back into a reinforced programme of capital investment to support Scotland’s beleaguered construction industry and stimulate the country’s economic recovery.

The Federation was responding to an initial call for contributions to the Scottish Independent Budget Review, which closes today.

Set up by the Scottish Government in February and led by a Review Panel comprising Crawford Beveridge CBE, Sir Neil McIntosh and Robert Wilson, the Review’s remit is "to inform public and Parliamentary debate in advance of the next UK Comprehensive Spending Review (which will cover the three years 2011-12, 2012-13 and 2013-14) about the challenges and choices which will exist in a significantly constrained public spending environment".

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Annual savings to the Scottish Budget from allowing Scottish Water to raise funds on the private markets have been estimated at anywhere between £180 million and £360 million.

The SBF submission to the Review also repeats calls for the creation of a National Infrastructure Investment Bank to help fund the £2.3 billion new Forth Crossing and further ease pressure on the public finances.

Michael Levack commented: "The Independent Budget Review has been put in place to help the Scottish Government and the Scottish Parliament prioritise public spending effectively as the Scottish Budget faces a cut of around £1 billion each year between 2011 and 2014.

"Our concern is that we need to sustain capital investment throughout this period in order to accelerate the recovery of the Scottish economy while also supporting our hard-hit construction sector.

"In light of this, we think it’s no longer tenable for Scottish Water to retain its status as the only entirely publicly owned and funded water utility in the UK. Whether via mutualisation or some other means, restructuring the ownership and funding of Scottish Water will generate significant savings to the public purse which we would argue should be re-invested in affordable housing, new schools, hospitals and infrastructure"

He added: "Such a strategy would put the Scottish economy on a clear path towards long-term sustainable economic growth, while helping to retain skills and capacity in a construction industry that employs 8% of Scotland’s workforce, generates around 10% of Scottish GDP and last year provided 42% of modern apprenticeship places in Scotland."

(GK)