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North Of Scotland Hydro Electric Board

Volume 116: debated on Thursday 14 May 1987

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asked the Secretary of State for Scotland what progress has been made by the North of Scotland Hydro Electric Board in following up the report on the board by the Monopolies and Mergers Commission published in October 1985; and if he will make a statement.

I have now received the second response of the NSHEB to the MMC report published in Autumn 1985. This decribes progress on steps taken by the board to meet the commission's conclusions. I have placed copies, in the Library.The board has responded in a constructive way to most of the MMC recommendations and good progress has been made since my statement to the House on 7 March 1986.I am particularly pleased to note the positive steps the board has taken in relation to the areas for priority action identified by the commission.The management services function has been expanded, manpower planning procedures have been developed, productivity monitoring procedures have been overhauled, and further work directed at establishing optimum manning levels is in hand. These initiatives are resulting in tighter control of manpower resources and their utilisation.In line with MMC recommendations, the board's corporate plan now includes a range of specific operational and financial targets which have been set and will be monitored by the board. The efficiency review committee has been strengthened, measures to reduce the costs of meter reading billing and collection have been implemented and a revised debt collection policy is being introduced. I hope soon to agree with the board a new set of cost reduction performance aims to begin in the current financial year.Good progress has been made in the development of management information systems designed to improve monitoring and guidance manuals have been issued over a range of activities—for example, planning, personnel and computer development.An assessment procedure for allocating priorities within the distribution system refurbishment programme has been developed and is being applied to all projects. The resources now being devoted to the programme represent a major commitment on the part of the board.Investment appraisal guidelines which take into account the commission's recommendations have been drafted and significant progress has been made towards developing a computer-based system covering both the financial and engineering aspects of project control.In response to other recommendations, the board has set in hand a review of tariff structure and work designed to improve its forecasting methodology.

My officials will be keeping in touch with the board on these and other areas in which action to implement the MMC's recommendations is continuing. I have asked the board for a final round-up report in about two years time.

I should like to thank the MMC for its report on the North of Scotland Hydro Electric Board. Its findings have been useful to the board in helping it to increase efficiency and reduce costs.