Anglian Water Business (AWB) has emerged as the most competitive bidder for the £320 million contract to supply water services to Scotland’s public sector- the existing contract has been held by Scottish Water subsidiary Business Stream since 2011.

The new contract will be managed from AWB’s Edinburgh office and protect any transferring staff. New staff are being recruited in Scotland to manage the new contract - AWB will more than double their Edinburgh workforce, as well as planning for new apprenticeships and trainees. The Scottish Government have also secured a Living Wage guarantee from AWB.

AWB’s bid offered immediate savings of £5m a year compared to the nearest bid, and water efficiency support to reduce customers’ water consumption. As well as helping the environment, these ‘green’ measures could reduce bills by a further £5m a year. This means the contract will save public bodies up to £40m over the next four years.

Cabinet Secretary for Infrastructure, Investment and Cities Keith Brown said:

“This is the best deal for Scotland under the rules that bind us, and this contract will save public bodies up to £10m annually for the initial three year period of the contract with the option to extend for a further 12 months.”

“Legislation introduced by a previous administration to safeguard the public status of Scottish Water requires us to tender out these services. But we have ensured that Scottish Water remains in public hands, and we have secured the best possible deal to ensure Scotland benefits.”

“AWB will also work with public bodies to reduce their impact on the environment and reduce their water consumption.

“But the biggest benefit of all will be the money that can be ploughed back into the services provided by those buildings – the schools, hospitals and public offices – throughout Scotland.”

The existing contract with Scottish Water subsidiary Business Stream was due to expire on March 31. AWB emerged with the most attractive bid but an extension was put in place to allow all of the bidders to consider initial feedback and provide on-going service to public bodies.

The current contract will be continued until December 31 to allow for a seamless transition to the new management.

The new contract is worth around £80m a year over four years. Scottish Water remains the wholesale provider – only the retail element is subject to competition (reading meters, processing bills and offering water efficiency support).

Scottish Ministers will ensure that Business Stream, as a public entity, maintains the no compulsory redundancy policy.