What is WICS and why is it at the centre of a national scandal?
It highlighted "serious concerns" over failings in the Scottish Government's approach, with a complete failure by the Government to challenge the culture at WICS, which led to an "unacceptable use of public funds".
What is WICS?
The Water Industry Commission for Scotland (WICS) is the economic regulator of Scotland's water and sewerage services. Established in 2005, it operates as an executive non-departmental public body of the Scottish Government, based in Stirling.
WICS oversees Scottish Water, the publicly owned utility serving over 2.5 million households and 150,000 businesses across Scotland.
What is WICS's core role?
WICS's primary function is to promote the interests of water and sewerage customers in Scotland by ensuring they receive high-quality services at a reasonable cost. Its responsibilities include determining price limits for Scottish Water to deliver ministers' objectives at the lowest reasonable overall cost and assessing Scottish Water's performance in areas such as customer service, investment, costs, and leakage.
It also oversees the competitive retail market for non-household water and sewerage services.
It supports the sector to achieve its long-term vision, challenging Scottish Water to attain best-in-class service levels, and becoming an international leader in economic regulation.
How does WICS support Scotland's water sector?
WICS plays a pivotal role in ensuring that Scottish Water operates efficiently and effectively, balancing the need for investment in infrastructure with the goal of keeping customer bills affordable.
By setting price limits and monitoring performance, WICS ensures that Scottish Water meets the objectives set by the Scottish Government including improvements in water quality, environmental performance, and customer service.
Why is WICS in the public spotlight?
It has faced significant scrutiny due to revelations of financial mismanagement and governance failures. An Audit Scotland report highlighted inappropriate public spending, including: a £77,000 Harvard Business School course for a senior executive, lavish spending on meals, with some exceeding £200 per head and £100 gift vouchers for staff, surpassing the £75 limit for gifts.
READ MORE: Scots watchdog using public funds to settle 1000s in unpaid staff tax
The payouts also included sending the head of external relations and strategy on a 13-day transatlantic executive development programme course costing £20,404 in 2019 at Columbia University in New York. Travel and accommodation expenses amounted to £1,056.
The expenditure was deemed non-compliant with Scottish Government rules and did not represent value for money.
What were the consequences of these revelations?
It led to significant leadership changes. Alan Sutherland resigned as WICS chief executive on New Year's Eve 2023. He received a payment of £86,268, representing half a year's salary in lieu of a six-month notice period, along with additional payments covering legal fees and employer National Insurance contributions.
Donald MacRae, the chairman of WICS, stepped down in October 2024 following criticism over the handling of the financial issues.
Were there other issues within WICS beyond financial mismanagement?
Yes, a workplace stress survey conducted in February 2024 revealed that nearly a third of WICS employees reported experiencing bullying at work. This pointed to a toxic work culture within the organisation, compounding the concerns raised by the financial mismanagement.
How has WICS responded to these challenges?
WICS has acknowledged past weaknesses in governance and financial controls. The organization has committed to implementing changes to improve its operations, including developing a 21-point improvement plan to address the issues identified in the audit.
It said it would be undertaking cultural change efforts to improve the work environment and prevent bullying.
Why has the Scottish Government been criticised?
The scandal has dented trust in the Scottish Government's stewardship of public funds, especially given that WICS is a regulator meant to promote efficiency and value for money.
A lack of oversight. Officials did not adequately challenge or question large expenditures, even though they were notified of them. This included the Harvard course and excessive hospitality bills.
Critics say there were signs of mismanagement as early as 2020, yet the Scottish Government did not step in decisively to address them.
WICS is the economic regulator of Scotland's water and sewerage services.The civil servants in charge of "sponsoring" or supervising WICS were found by an internal audit to lack the rigour and curiosity necessary to spot and stop poor practices.
Opposition parties have accused the Scottish Government of 'negligence,' 'mismanagement,' and even covering up failings.
What is the current status of WICS?
As of May 2025, WICS is undergoing a period of transformation to address the issues that have come to light. The organisation is working to implement the recommendations from the independent review and its own improvement plan.
Leadership changes have been made, and efforts are underway to improve governance, financial controls, and workplace culture.
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