From Laggard to Leader: How Scottish Water Turned a Public Utility Into a High-Performer
Exec Exchange – Episode highlight with Alex Plant, Chief Executive, Scottish Water
When Scottish Water was created in 2002 by merging three regional bodies (East, West and North of Scotland Water), it started from a difficult baseline.
On almost every metric – service quality, efficiency, cost performance – it sat below the worst-performing English company. A fragmented footprint, legacy structures, dispersed offices and a culture shaped by local authority delivery all compounded the challenge.
Two decades on, the picture is very different.
Scottish Water now:
- Serves 5.5 million people across the whole of Scotland – from Dumfries to the Western Isles and Shetland
- Is top quartile on cost efficiency and service performance
- Achieves consistently high customer satisfaction, leading UK water companies and scoring strongly even compared with other Scottish utilities
- Operates as a publicly owned but commercially run corporation with independent economic, environmental and drinking water regulators
In this episode of The Exec Exchange, Alex Plant, Chief Executive of Scottish Water (and formerly Director of Strategy & Regulation at Anglian Water), joins Dr. Piers Clark to unpack how that transformation happened – and where he wants to take the business next.
A Different Governance Model – And a “Natural Experiment”
Scottish Water is structurally different from utilities elsewhere in the UK:
- Publicly owned, but
- Commercially run, with
- Independent regulation for:
- Economic performance (Water Industry Commission for Scotland)
- Drinking water quality
- Environmental compliance
Alex describes the wider UK as a “natural experiment” in water governance:
- England – privately owned PLCs and privately held companies
- Scotland – public corporation, arm’s-length from ministers but accountable via government acting as shareholder on behalf of the public
- Northern Ireland – much closer to direct government operation
Scottish Water’s model isn’t presented as “the only way”, but Alex is clear:
“I’m not saying the private model is wrong or can’t work. I think it absolutely can.
I’m simply observing that our model seems to work quite well in Scotland.”
Public ownership brings baseline trust and political legitimacy. Commercial disciplines and strong regulation drive performance and efficiency. The combination has underpinned the last 20 years of improvement.
From Behind the Pack to Top Quartile
When Scottish Water was formed:
- It lagged significantly behind English companies on service and cost
- Regulatory benchmarking from the Water Industry Commission for Scotland (WICS) made that brutally clear
- The first regulatory determinations set very stretching efficiency and service targets – some insiders thought they were impossible
Alex is candid about the role of regulation in the story:
“Without robust economic, environmental and quality regulation, we would not have got to where we are.
It’s a story of effective policy frameworks, a sensible model, and people in the company rising to the challenge.”
Key ingredients in the turnaround:
- Customer at the centre – shifting mindset to:
- “We exist to serve customer needs”
- “All money comes from customer bills – so both service levels and cost efficiency matter”
- Willingness to transform – including:
- Taking out cost where appropriate
- Re-designing processes and organisations rather than just salami-slicing
- Using benchmark competition – constant comparison with English and Welsh companies sharpened focus and created a clear external reference point
- Investment in technology & methods – smarter ways of operating that simultaneously improved performance and reduced costs
The outcome: Scottish Water is now comfortably top quartile on efficiency and service, and enjoys strong support from:
- Customers
- Economic and environmental regulators
- Scottish Government, which is “proud” of the company’s performance
Serving a Complex, Diverse Geography
Scottish Water is:
- The largest UK company by land area
- Around fourth largest by customer numbers
The footprint includes:
- Major cities (Glasgow, Edinburgh, Aberdeen, Dundee)
- Remote rural communities
- Island populations in Shetland, Orkney and the Western Isles
- Areas with big seasonal tourism peaks, where populations – and water demand – surge in summer
Despite Scotland’s reputation as a wet country, water scarcity is real:
- East of Scotland is relatively dry
- Some island and tourist areas experience seasonal shortages
- Climate change is making variability and drought risk more pronounced
One of Alex’s missions is to get Scotland to “think differently about water” – moving beyond the assumption that abundance is guaranteed.
The Power of Collaboration
A recurring theme in the episode is collaboration:
- Between Scottish Water and other UK utilities – sharing and learning in both directions
- Across government, regulators and the company – focused on common goals rather than adversarial postures
Alex sees this as part of the Scottish “way of working” and credits it, alongside regulation and internal transformation, with the company’s progress.
“We work really well together across government, regulators, companies.
Recognising there’s a common goal, being honest about what you’re trying to do, and then following through on it – that’s been key.”
What Comes Next: Empowerment, Demand and Mindset Shift
Alex has inherited a strong base – he’s open about the quality of the platform left by his predecessor. His focus is now on the next wave of change.
Three big priorities stand out:
1. Empowering People and Unlocking Creativity
Internally, Alex wants to:
- Push decision-making down
- “Free people from the yoke of heavy decision-making processes” that slow innovation
- Encourage staff to bring forward new ideas on service, efficiency and environment
The aim is a more agile, creative utility which still meets stringent regulatory requirements.
2. Raising the Profile of Water and Cutting Demand
Scottish customers currently:
- Use around 20% more water per person than the world average
- Pay for water through council tax, with no metering for most households
- Get no usage signals (no bills based on consumption), beyond generic conservation campaigns
Alex sees this as unsustainable in the face of climate pressure:
- He wants to raise the profile of water as a finite resource
- Begin to shift public attitudes – from “it rains all the time here” to a recognition of genuine scarcity in parts of Scotland
- Drive a demand reduction trend over the coming years
Metering is one obvious tool, but the bigger challenge is mindset: getting a nation that thinks of itself as perpetually wet to recognise that local and seasonal shortages are already here.
3. Staying Relentlessly Customer & Environment Focused
Scottish Water’s transformation was built on customer-centricity. Alex wants to deepen that:
- Maintain and improve service levels
- Continue driving down pollution incidents – already reduced to single numbers annually, but “still some way to go”
- Use technology and process change to align cost efficiency and environmental performance, rather than trading one against the other
Values, Integrity and Leadership
The episode closes on a personal note. Asked what he owes his parents, Alex talks about values:
- Fairness
- Honesty
- Being true to your word
With divorced parents and step-parents on both sides, he credits all of them with instilling those principles – which now shape how he leads and collaborates.
“Recognising there’s a common goal, being honest and transparent about what you’re trying to do, and then following through on it – that’s what I’ve inherited from my parents.”
For a publicly owned national utility tasked with stewarding an essential resource, that combination of integrity + collaboration + performance is not a bad formula.
Why This Episode Matters for Utility Leaders
This conversation with Alex Plant is particularly valuable if you:
- Operate in a publicly owned or politically sensitive utility and need to prove commercial discipline
- Are trying to move a historically underperforming organisation into top-quartile performance
- Want to understand how regulation, governance and culture can reinforce – rather than undermine – transformation
- Are grappling with water scarcity in a place that “should” be wet and need to shift customer behaviour
Scottish Water’s journey offers a rare case study: a public sector utility using private-sector disciplines, robust regulation and collaborative politics to move from the bottom of the league table to the top.
To hear the full story – including more on benchmarking, transformation and future plans for demand and resilience – listen to this episode of The Exec Exchange with Alex Plant, Chief Executive of Scottish Water.