£3m strikes cost to Scottish Water in 'fat cat' bonus & pay row

The Herald Scotland

2 days ago

The three Scottish Water staff unions, which also include Unite and Unison, have already written to chief executive Alex Plant accusing the company of acting in bad faith, condemning its management culture in failing to deal with the dispute.
Seven day action involving hundreds of workers which started on Monday has the potential to disrupt essential services, including water supply maintenance, waste water treatment, and emergency response to leaks or flooding.
But Scottish Water has previously said that contingency plans are in place to enable it to maintain a normal service.
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It has told users: "We will do all we can to ensure customers do not experience any disruption to their water supplies and that treatment of the country's waste water continues as usual, despite the planned industrial action.
Union members on the picket line (Image: Andrew Milligan)
"A reliable water source is vital for everyone. Maintaining public health and protecting the environment are our priorities, and it is the responsible course of action for us to have contingency plans ready."
The estimates of the current strike action are based on revelations that it contingency plan costs of dealing with four days of strikes between November 10 and November 13 in 2023 amounted to £1.603m.That included a £947,000 bill for water operations and customer service contractors
It means that Scottish Water would be facing a further estimated bill of £2.8m to cover the third strike of the latest pay dispute which is to last seven days.
It follows three 24-hour strikes, one in March and two in April which is estimated to have cost a further £1.2m
Union sources say that Scottish Water would, however, be making an estimated saving of £125,000 a day on strike staff labour costs which would amount to £1.25m over the 10 days of strikes so far..
On Wednesday, striking Scottish Water workers staged a demonstration about over fair pay to Scottish Water's Glasgow offices in Renfrew Road.
GMB Scotland says the dispute has potential to become one of the most significant in Scotland's public sector, with both sides miles from reaching an agreement.
Further discussions over a new offer were being mulled over yesterday [Thursday].
It comes amidst a row over Mr Plant receiving a 50% rise in the existing pay package - despite public sector pay rules saying he should expect to have a 10% cut.
The £483,000 remuneration for Alex Plant over just ten months of 2023/24 is nearly £100,000 more than the outgoing chief executive Douglas Millican, received in his last full year before taking flexible retirement which resulted in a cut in salary and reduced pension benefits.
The Scottish Government's public sector pay policy has since 2010 included an "expectation" that the remuneration of a new chief executive appointment will be at least 10% lower than that of the outgoing officer.
MSPs raised their concerns in the Scottish Parliament after The Herald further revealed that executives of the nation's state-owned water supplier saw bonuses hiked by over a third in one year - taking a five-year total to nearly £1.6m despite public sector pay rules suspending the payments.
While Scottish Water has remained included on the list of public sector organisations that should conform with the pay policy, the Scottish Government say that they are exempt.
The GMB said Mr Plant attended the talks on Tuesday for the first time after his absence had been criticised for only staying a few minutes before leaving.
GMB Scotland said the Scottish Water strike costs should "shame" its negotiating team.
Claire Greer, the union's organiser at the publicly-owned utility, said management have allowed the pay dispute to escalate without the apparent will or expertise to resolve it.
She said: 'The cost to the public purse of this ongoing industrial action is likely to far outweigh what it would have cost Scottish Water to find a resolution to what should have been a very straightforward pay negotiation.
Claire Greer (Image: GMB)
'That is beyond the pale and should dismay taxpayers and alarm ministers. It has become impossible to guess if Scottish Water are trying to play games in these negotiations or are simply incompetent.
'What is certain is that clear and transparent talks should have resolved this dispute months ago.
"It is shameful that millions of pounds of public money is on the line because the management of this company is unwilling or unable to engage in pay talks in a competent manner.'
Scottish Water workers downed tools on Monday after rejecting the company's latest pay offer.
It initially offered workers a basic pay rise of 3.4% or £1,050 for those on the lowest grades.
But after a 24-hour strikes in the spring, the offer was changed to 7% over two years.
The strike comes as water bills have risen by 9.9% from April with the public utility firm saying it was necessary to cope with period of "drought and intense rainfall" brought on by climate change.
Ms Greer has written to Gillian Martin, the Scottish Government minister responsible for Scottish Water, urging her to encourage executives to seriously engage with negotiations.
She highlighted a number of concerns around the negotiations accusing management of trying to bypass unions and negotiate with workers directly; making a revised offer that was worse than one already rejected by workers; and quoting incorrect and misleading salary details in a formal offer.
She states: 'Management have clearly demonstrated they do not intend to engage in good faith with trade unions, take the basic and necessary steps to avert strike action, or deliver a pay offer that values the workforce.'
'Industrial relations are at an all-time low because of a management culture which seems anti-union and holds the workforce in complete disregard.'
Unions have warned that the pay rises and bonuses to executives have only increased the frustration of Scottish Water workers.
After being challenged about the bonuses in the Scottish Parliament, climate action minister Alasdair Allan defended the pay policy saying: "The Scottish Government does seek to ensure that executive pay is kept under control".
And he said it had sought that "when new chief executives come in to post that there are controls around wages and bonuses put in place".
Scottish Water has defended the salary packages saying that they maintain and operate a "simple remuneration structure" with a pay policy that aims are to "attract, develop, motivate and retain highly talented people at all levels of the organisation" and to "incentivise and reward good individual and corporate performance as well as out-performance".
Scottish Water operates under an annual borrowing limit set by the Scottish Government. The annual borrowing limit controls the amount by which Scottish Water can increase externally sourced finance.
As at March 31, 2023, government loans totalled £4.5 billion.
Net new borrowing by Scottish Water from the Scottish Government was planned to be to the tune of £196m in 2023/24 alone to carry out its activities.
A spokesperson for Scottish Water said: 'We are committed to constructive talks with our trade union colleagues to find a sensible solution to this dispute.
"The best way to avoid additional costs caused by the industrial action is for the strikes to stop and a resolution to be found as soon as possible.'