Scottish Water recently announced the completion of a huge civil engineering project across the Hebrides. With ongoing investment in water infrastructure across Scotland, businesses can reap the benefits while also taking advantage of a regulated market.
A recently concluded public consultation on water services has taken into account both water charges and investment. The results will inform the strategy for the coming 2027 to 2033 regulatory period.
Scottish Water is planning on continuing work for replacement, repair, refurbishment and other improvements totalling £6.2 billion of investment from 2021 to 2027. The work, when completed, will have a direct impact on businesses based in Scotland.
How is the water supply structured in Scotland?
Water for businesses in Scotland is structured into two groups, responsible for different aspects of supply.
Scottish Water
The publicly-owned organisation was restructured when the market was deregulated to be in line with private sector companies. It is responsible for operating the water network, improvements to infrastructure and treatment of potable and waste water.
Licensed Retailers
Over 20 companies are registered as licensed water retailers in Scotland, supplying approximately 160,000 non-household supply points.
Retailers include Castle Water, Wave, Commercial Water Solutions Ltd and more. Business Stream is the largest supplier and is part of the Scottish Water Group, operating as its non-domestic retailer.
Why was the Scottish water market deregulated?
In 2008, Scotland deregulated its water market, becoming the first country in the world to do so. The wholesaler, in this case Scottish Water, remained the physical supplier of water and is responsible for its infrastructure.
The deregulation allowed for competition and broke the monopoly that Scottish Water had over the water retail.
The competitive nature of the market means licensed retailers can provide discounted rates and a better, more tailored service.
It forced improvements in the sector by giving charities, businesses and public sector organisations the right to choose a change business water supplier in Scotland.
It allowed companies to switch water providers to benefit from cheaper business water rates. However, it did not apply to domestic properties that cannot yet choose their water supplier.
The water company, or retailer, takes care of billing and customer service and pays the network supplier a wholesale rate. These wholesale charges, along with new connection charges from developers, are used for operating costs and infrastructure improvements.
What investment has there been in infrastructure across Scotland?
In the 18 years since water retail was privatised in Scotland, there have been numerous large investment projects across the mainland and its islands. Some of the more recent water network improvements are detailed here.
Ayrshire and Glasgow
Major upgrades to Ayrshire, East Renfrewshire and Glasgow, completed in 2025, made supply to the area more resilient. The improvement to pipe networks and the introduction of a two-way connection will mean potable water can flow in both directions.
In practical terms, it will mitigate the risk of interruptions to supply for homes and businesses. Should a water main burst in the area, the water supply can be rerouted, which will lessen the impact on businesses in the area.
Edinburgh and East Ayrshire
In the Edinburgh area, investment of £500 million has been committed to improve urban waterways and networks, including installing monitoring for sewage networks and improving water quality.
A focus on storm overflows and reducing sewage debris is also part of the plans due to be completed in 2027. The project, named ‘Draining the Rain, Enhancing the Environment’, also includes works in East Ayrshire.
By reducing the debris and better sewage overflow monitoring, a proactive approach to preventing flooding can be implemented, enabling business as usual during rainy seasons.
Another benefit of the project is to make areas around watercourses more enjoyable and safer for residents who live there.
Inner and outer Hebrides
A £35 million water infrastructure improvement project was completed in 2026 in the Hebridean islands. Homes and businesses on Lewis, Skye, Benbecula and Mull will all benefit from upgrades to the water network.
The project aimed to create a more resilient supply by replacing aged water mains and modernising the supply for the communities living and working there. In doing so, the risk of unplanned interruptions to the drinking water supply will be reduced.
By making the water supply more reliable and improving its long-term stability, the hope is that future weather and climate change challenges will have less of an impact on business as usual for the islanders.
What are the key benefits of water network investment for Scottish businesses?
The improvements to water infrastructure across Scotland will no doubt make daily life easier for domestic consumers, but how will businesses benefit?
Fewer interruptions to the supply
A more resilient water network can handle crises better, and so reduce the number of unplanned interruptions to supply. Businesses that are heavily reliant on water can benefit from not losing days and therefore revenue when the water supply is short or stopped.
Withstanding the weather
Floods and droughts can be handled better with improvements to water infrastructure, enabling continuity throughout winter and summer peak seasons. As climate change shifts weather patterns, a more robust infrastructure can ensure a stable water supply.
Less contamination
Reliable potable water supplies, particularly for the islands, are not just important for domestic use. Tourism, leisure, hospitality, food industries and manufacturing firms can all benefit from a better supply of high-quality drinking water.
Encouraging commercial developments
Increasing the volume of supply available allows businesses to expand and new businesses to develop in the area. In turn, this can boost the local and national economy with investment in construction, services and manufacturing.
