Richard Ackroyd

Introduction

According to his Scottish Water Biography, where he is currently Chief Executive, "Richard Ackroyd was appointed as Chief Executive on 25 March 2008 and has twenty years experience in the water industry. Prior to joining Scottish Water Richard had been Director of Regulation and Investment at Yorkshire Water since 1996 with, amongst other issues, responsibility for regulatory matters and investment programmes. Richard was also Chairman of Water UK from 2006 to 2008. He is a solicitor by profession and has previously been Head of Legal Services for Yorkshire Water following a period in private practice" .

It is said that Richard Ackroyd's style of management is less conducive to partnership working with the employees of Scottish Water than that of his predecessor, Jon Hargreaves. On November 27th 2008 Scottish Water staff took industrial action for the first time in a number of years. The workers justified their action by the forced imposition of a pay offer and the resultant wihdrawal of Scottish Water from the ongoing pay negotiations. The offer itself was a 2.4% increase, whilst inflation is currently running at nearer 5%, this alongside the manner of the offer was unacceptable to the the members of the three Unions in the water industry. Richard Ackroyd and the management of Scottish Water were not sufficiently persuaded to increase the offer to meet the demands of their employees. Richard Ackroyd himself earns £260,000 per annum. This unrest does mark a new phase in the short 6 year history of Scottish Water however, how it develops in the future will test Richard Ackroyds capacity as Chief Executive.

Background and experience

Richard Ackroyd served as Director of Capital Investment and Regulation at Yorkshire Water Services. The experience gained there will undoubtedly prove invaluable at Scottish Water. The Mutualisation of Scottish Water is, and has, persistently been mooted by various parties, as an ownership model that should be considered seriously for Scottish Water. Richard Ackroyd was very involved in preparing the (doomed) Kelda plan to mutualise Yorkshire Water, which they owned. In short, he has previous experience in preparing a utility for mutualisation. So much so, he was to become the Managing Director of the Mutual company, had it successfully mutualised. The plan by Kelda was seen as opportunist by Ofwat the English regulator however.

According to David Hall and Emmanuelle Lobina at the PSIRU "Kelda would realise £2.4bn – more than five times the 1989 purchase price – from the sale of the water business’s assets built up by generations of taxpayers and consumers. This would have enabled Kelda to pay back YW’s existing debt and that of the other subsidiaries, and return up to £1bn to shareholders. This is more than twice the value of their original investment, and comes on top of the £350m paid out in dividends thus far. And this would still have left enough cash for further acquisitions. Free of the regulated business, Kelda could pursue its declared objective of ‘focusing aggressively on shareholder value’”. They go on to write how "Local reaction was hostile.... The local Yorkshire newspaper, the Northern Echo, said in a leader: "Yorkshire Water has amassed colossal debts, the core water supply business is struggling to make profit and the share price is depressed. The directors' answer to the mess they have created is to give the business back to the public. Having milked it dry with excessive dividends and excessive wages and share options for themselves, they are walking away. And even then they have the nerve to want to continue to run the company - no doubt at a profit - saddling the public with the pounds 1.4bn debts they have left behind. The effrontery of these directors beggars belief. As one union leader put it yesterday: "The time has obviously come when the pigs have had their feed at the trough and there is nothing left." The Government must not allow Yorkshire Water's proposals to go ahead as outlined yesterday. While the concept of public ownership of a vital economic resource is laudable, the prospect of Yorkshire Water profiting from its catalogue of failures is not."

The proposal was rejected by the regulator. Ofwat explained the decision was due to the fact that Kelda's plans failed to: "set out clearly how customers would benefit from the change in ownership" (by contrast, shareholders would certainly gain); "properly inform Yorkshire Water's customers about the proposals and consult with them" (eg inform customers about the financial consequences of the proposal); "ensure that the Drinking Water Inspectorate and Environment Agency are able to enforce the required quality standards" (there would be a risk "of confusing liability for environmental damage and asset failures"); "demonstrate clear independence between the proposed mutual and Kelda .

For the plan of Kelda's to mutualise Yorkshire Water see reference below

Links and Affilliations

Richard Ackroyd is due to speak at a so-called 'influencers dinner' hosted by the Scottish Council for Development and Industry (SCDI) and co-sponsored by Morrison Construction at Inverness in January 2009 .

Scottish Water, through Water UK is a member of the National Joint Utilities Group (NJUG).