Scottish Gas Board

The Scottish Gas Board was a state-owned utility providing gas for light and heat to industries and homes in Scotland. The Board was established on 1 May 1949, and dissolved in 1973 when it became a region of the British Gas Corporation.

The first chairman of the board was Sir Andrew Clow who established the headquarters at 25 Drumsheugh Gardens and 12 Rothesay Terrace Edinburgh. He served until 30 April 1956. In the last of his quarterly letters to his senior management, he reflected on the experience of centralising the control of over two hundred independent undertakings. The remainder of the article is abstracted from that letter and includes explanatory remarks.

Each undertaking performed the functions of coal gas production and distribution through underground pipes to domestic, commercial and industrial customers, sales promotion, finance, etc. Some works were too small to remain viable and one at Wigton was closed. Studies were conducted to establish whether previously rival works could be integrated, both managerially and physically by linking their distribution systems.

Most of the larger gas undertakings had been owned by local authorities and employed many expert and talented engineers. However the same authorities were also owners of electricity generating and supply companies (the main rivals of the gas industry); the local authorities had felt no need to promote competition.

Immediately after World War II there was a chronic shortage of pipes (for mains replacement and extension to new customers), and other materials. Most gas pipes were made of cast iron and often leaked at the joints. Actual 'unaccounted for gas' (loss through leakage and other losses) was estimated as being as much as 25%. Refurbishment and replacement of pipes was a priority, for safety reasons. Little preventive work was carried out; distribution engineering was usually initiated by the detection of a leak.

Many gas works had not been adequately maintained, the price of coal and of coke oven gas was rising, contractors were in short supply and the Scottish rating system at that time was such that 'profits might prove as damaging as losses'.

Regarding gas tariffs, the chairman wrote "we must keep the allocation of charges between customers fairly close to our estimate of their individual costs and we do not have the freedom of private companies to discriminate between customers whose conditions are similar." This was a reference to the notion that pricing of state-owned produce should reflect cost as accurately as possible. This was in very sharp contrast to the free market concept of charging 'what the market will bear' i.e. the highest price that still enables sufficient competitive advantage to retain that customer.

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