Private Members' Business. - Local Government (Financial Provisions) Bill, 1997: Committee Stage (Resumed) and Remaining Stages.

SECTION 9.

I move amendment No. 11:

In page 11, subsection (3)(b), lines 12, after "authority" to insert "or authorities (each of which is referred to in subsections (5) and (10) as a 'facilitated local authority')".

Amendment agreed to.

I move amendment No. 12:

In page 11, subsection (5), line 28, after "If" to insert ", in relation to a facilitated local authority,".

Amendment agreed to.

I move amendment No. 13:

In page 11, subsection (5), line 33, to delete "the second-mentioned authority in that subsection" and substitute "that facilitated local authority".

Amendment agreed to.

I move amendment No. 14:

In page 12, subsection (10), lines 13 and 14, to delete paragraph (a) and substitute the following:

"(a) each facilitated local authority concerned,".

Amendment agreed to.
Section 9, as amended, agreed to.
Sections 10 and 11 agreed to.
SECTION 12.

Acting Chairman

Amendment No. 15 is out of order as it involves a potential charge on the people.

This section of the Bill is about charges and I would have thought this amendment was in keeping with the context of the Bill.

The Government can impose a charge. That is its prerogative.

Amendment No. 15 not moved.

Acting Chairman

Amendment No. 17 is related to amendment No. 16 and they may be discussed together. Is that agreed? Agreed.

I move amendment No. 16:

In page 15, subsection (3), between lines 42 and 43, to insert the following:

"(1A) Nothing in subsection (1) of this section shall be construed as preventing a local authority from recovering a charge made by it, on or before the 31st day of December, 1996, for a disposal by it of domestic sewage after that date.".

Section 12 of the Bill removes the power of local authorities to levy charges for a supply of water for domestic purposes or the disposal of domestic sewage. A supply of water for domestic purposes in this context means a supply for ordinary household purposes to a dwelling house or to a group water scheme. Amendment No. 16 is a technical amendment to ensure that a local authority will not be prevented from recovering a charge properly made before 31 December 1996 for the disposal of domestic sewage by it after that date. No local authority may impose a charge subsequent to 1 January 1997 yet I wish to ensure that charges levied lawfully and notified to householders before that date are lawful.

Amendment agreed to.

I move amendment No. 17:

In page 15, subsection (3), line 43, to delete "(1A)" and substitute "(1B)".

Amendment agreed to.
Question proposed: "That section 12, as amended, stand part of the Bill."

I am concerned about the implications of this section. As I said on Second Stage, my party and I fully accept the abolition of the old discredited scheme of water charges.

The Deputy did not.

She is changing now.

I would point out to Deputy Seán Ryan that the Minister does not need all the happy chaps to come in as cheerleaders.

I take issue with that statement.

My concern is that having abolished the system introduced by the Leader of the Labour Party——

Rejoice in the abolition.

The two women in Europe are not rejoicing.

What two women?

The system fell into disrepute because it was unfair. I fear that by failing to put in place an alternative system which is fair and acceptable the Government has put at risk millions in EU funds which the country will need badly in the years ahead for essential water and waste water projects.

Balderdash.

Every right thinking person shares my deep fear that that will prove to be the case and in the years ahead the citizenry will not thank the Government for this reckless decision——

To remove water charges?

——to put at risk large amounts of badly needed funds. If the money is not forthcoming from Europe the PAYE taxpayers will have to foot the bill. I tabled my amendment No. 15 as an insurance policy against such an eventuality.

There are no conservation measures in place at present.

That is not so.

By the year 2000 there will be four major waste water plants — in Cork, Dublin, Limerick and Galway. The capital cost of those plants is very large and the running costs are also substantial. The running costs of the plant in Cork will be about £2.3 million a year. Who will have to pay for the running costs? Will it be the PAYE taxpayers or the commercial ratepayers who are already overburdened? I assume the waste water plant will have a higher annual running cost. We ought not to ignore these facts in the hope that when the election is over the taxpayers and ratepayers will be told the truth.

That is scurrilous.

Acting Chairman

The Deputy should not engage in interruptions.

The Chair is right. I am worried we are mortgaging the future of the next generation of taxpayers. We are asking young people to vote for us yet if they knew what they might face in taxation the last thing they would do is to vote for the Government. Huge bills are staring us in the face and if by a reckless act of the Government we prejudice the funds available to us from the EU the next generation of taxpayers will have to pay the tab.

The existing tranche of EU funds is safe but I am concerned about what will happen when we argue for the next round of funds. I am not sure what the two women who have their eyes on the Ministers, Deputy Quinn and Deputy Howlin, will have to say.

On whose expert advice did the Minister decide to abolish the water charges?

I notice Deputy Dempsey is leaving.

Deputy Quill has frightened him off.

All of the expert advice available seems to advocate the opposite. For example, the report of the ESRI — a State funded body — published today——

Is the Deputy in favour of all the recommendations, including carbon, disposal, electricity and fuel taxes?

If the Minister stays with the specific question I am framing, I have some hope of getting a specific answer.

Acting Chairman

The Deputy should not stray too far and start to make a Second Stage speech.

I will not, unless I am interrupted. I am merely trying to establish from what expert as opposed to political source the Minister got the advice to abolish water charges. The ESRI——

Acting Chairman

I am not sure that matter arises on section 12.

This is the appropriate section, I am totally in tune.

Acting Chairman

The Deputy should keep it very short.

All the expert reports seem to advocate the opposite. The EU draft directive coming down the tracks at strong speed will do likewise. I am only looking for basic information. There has to be an answer to my question. At least I am giving the Minister some credit. He would only have taken this decision on foot of the best possible expert advice. I am giving him an opportunity, as a professional young politician and as the person charged with the responsibility of protecting the environment, to redeem his reputation and to demonstrate that the action he is taking in this Bill is based on logical reasons, on the best professional advice and on the best conservation principles to ensure this country receives the maximum amount of Cohesion Funds in the years ahead.

This is the meat of the Bill, the part I thought I would never read in legislation. It effectively means that water or service charges cannot be reintroduced by any party unless amending legislation is introduced. Deputy Quill is a brave woman. In two weeks' time, probably, she will have to knock on doors and tell the people of Cork that her party in Government with Fianna Fáil will reintroduce water or service charges. What she is saying is that her party disagrees with their abolition. That is the message she is sending from this House to the people of Cork, Louth, Galway, Dublin and elsewhere.

There has been much talk about what may happen in 13 or 14 years' time on foot of an EU directive but the European Commission cannot change this section, it can only be changed in Dáil Éireann. I do not know if there is a party which would be brave enough to introduce amending legislation to provide for the reintroduction of water charges. I look forward to members of the Progressive Democrats knocking on doors in my constituency of Louth and elsewhere and telling voters that they will reintroduce them. I admire Deputy Quill's courage, she is a brave Deputy.

The European Union cannot dictate to us and tell us what to include in domestic legislation. It cannot force us to reintroduce water charges. The parliamentary Labour Party, of which I am chairman, will never vote for their reintroduction. The best guarantee the public can have that they will not be reintroduced is to return the Government to office.

Deputy Quill said that she was not opposed to the removal of water charges but then criticised the Minister and the Government for listening to the views of the people and members of the parties in Government, particularly the Labour Party, in removing them. I prefer to classify the charges as a water tax. During the years local representatives of all parties indicated that they were opposed to water tax and gave a commitment that when in Government their parties would do something about the matter.The Minister has decided to resolve it once and for all. Deputy Dempsey was embarrassed by what Deputy Quill said given Fianna Fáil's stated position on the matter.

The Deputy must think I am easily embarrassed.

It will take Fianna Fáil and the Progressive Democrats a long time to devise a policy on the financing of local government. I do not think the voters will give them that opportunity.There is no such thing as a free lunch. We have said this time and again.

The Deputy is now quoting Deputy Mary Harney.

I am not. Local services will be financed from central Government funds or a combination of central Government funds and local charges or through the mechanism proposed in the Bill. People living in the greater Dublin area believe they are paying for services through PRSI and other contributions. If an extra payment is required, it would be preferable to raise it through the mechanism proposed by the Minister rather than by way of water charges payable on a weekly or monthly basis. We must listen to what the people are saying.

There has been much talk about what certain people in Brussels are saying may happen in future in relation to the payment of water charges. It is our function to legislate. We can make those payments in whatever way we wish. No one will deny that water needs to be conserved.The Minister has put forward many recommendations in this respect and consideration should be given to allocating grants to householders to install systems for collecting rain water.

Does the Deputy support the amendment?

This system could be connected to the bathroom and used to flush toilets.

A similar system was used 30 years ago but we abandoned it.

It is a good idea.

I remember the time when water was collected in barrels. When talking about conservation we should consider all options, and I ask the Minister to consider my proposal. Even if a grant has to be given to householders to install such a system it would mean a saving to the Exchequer in the long-term. We all know that as a result of the progress made in the economy by the Government and the Labour Minister for Finance we will receive less funding from the EU in the future. We will make our decisions on this issue and will not be dictated to by Europe.

My constituents are satisfied that the Minister has grasped the nettle on this issue. Fianna Fáil and the Progressive Democrats had an opportunity to come together and put forward a viable mechanism for the financing of local authorities but they ran in different directions. They did not realise that they would have to depend on each other for support after the general election. They left it to the Minister to deal with this hot potato. I congratulate him on the system he has devised for the funding of local government.

I wish to refer to Deputy Quill's amendment which was ruled out of order.

An Leas-Cheann Comhairle

We are dealing with the section.

It is important to recognise that water is a valuable asset which is not available in unlimited quantities. It cost an enormous amount of money to construct the water distribution and purification systems, some of which are still not adequate to meet the demands of various communities.Given our high level of rainfall, there was little concern in the past that we would have a water shortage. However, a short dry period can lead to water problems in some areas where there is inadequate storage capacity. For example, the recent dry spell highlighted the serious problems with the system in some parts of my constituency.

The group water supply scheme under which households get together to employ a consultant and avail of grants was the brainchild of an official in the then Department of Local Government.Hundreds of people in rural areas owe a debt of gratitude to the official who put forward the proposal and to the Minister who put it into operation. This scheme has ensured a piped water system for households which would not have a piped water supply if they had to wait for the State to install it.

Water is not an unlimited resource. It costs much money to cleanse, purify and pipe water to households. Water is used in huge quantities by industries and the agricultural sector. The piped water system has been a tremendous blessing to housewives who no longer need to carry water in buckets from the local well.

I do not wish to exaggerate the problem but much concern has been expressed about the quality of the ground water supply. Very few of the thousands of septic tanks installed since the war meet the strict requirements laid down by the EU in regard to percolation. Geological and other surveys show that ground water is being seriously polluted by inefficient septic tanks and farm practices.The State must do everything possible to guard this necessary natural asset, the real uisce beatha. When talking about the protection of the environment our first priority must be to protect the water supply. Reports have highlighted the Ecoli, other bacteria and deleterious matter found in water. I do not wish to exaggerate the problem but this must be a cause of concern.

We must not waste this resource. It is essential for the State to put in place a good water management programme. In drawing up such a programme it is essential to take into account the statistics in regard to the public supply of water, that is the quantity of water pumped through public and private piping systems and the quantity which is consumed. Surveys show that there is massive leakage of this expensive water resource in the public piping system. A figure of 40 per cent was given for Dublin, while a figure of 60 per cent was given for my city of Galway. The Minister said that £30 million would have to be spent in trying to find these leaks in the system.There are people in my city employed, using EU funds, to discover, using new and old fashioned methods, the points at which these vast quantities of water are being lost in the system. They spend their time tapping and listening to pipes——

An Leas-Cheann Comhairle

I hesitate to interrupt the Deputy but I must remind all Members that this is a Committee Stage debate. We are talking about section 12. This is not a Second Stage debate.

We are talking about removing the charge. We are spending huge amounts of money trying to discover the location of the leaks.

I have been a Member long enough to remember when the Labour Party introduced service charges. The Deputies who spoke earlier were not Members of this House when the Tánaiste, Deputy Spring, introduced the Local Government (Financial Provisions) Bill in the early 1980s which implemented service charges. Those charges were opposed by the Opposition at the time, of which I was a member——

Never repealed.

——and were passed in this House in an extraordinary way. A charge would have to be made regardless of whether water was taken from the local pipe. Those charges were introduced in the most arbitrary, dictatorial fashion. The issue immediately became a bone of contention because it was an unfair system in that it was arbitrary and varied across the country. It was seen as an additional tax on the people and a fund gatherer by the Labour Party. Labour Party Deputies do not even blush when they are reminded of that. The people who supported their leader at that time, and who put themselves forward as candidates for the subsequent election, voted against those service charges in their local authorities because they were chicken hearted. A Minister in this Government was a member of Galway Corporation at that time, and whenever the question of service charges arose as part of the funding of the local authority, he voted against them because of the legislation his leader had introduced.

Is the Deputy for or against them?

An Leas-Cheann Comhairle

No interruptions, please.

He voted for service charges in this House and stood as a candidate in the election while voting against them locally, thereby denying the local authority the only source of funding the Government was prepared to allow it raise.

I accept that the amendment disallowed would introduce a charge, but it also refers to metering. As I understand it, under existing regulations a local authority has the power to install meters in domestic dwellings, commercial enterprises, guest houses, factories and on farms. I do not understand the reason every detail of that amendment was ruled out of order. Perhaps I could get the Chair's opinion on that before I continue.

An Leas-Cheann Comhairle

The amendment was ruled out of order in the normal way in that it was deemed to involve a charge on the people.

The law as it exists allows local authorities to install meters. Is that not so?

An Leas-Cheann Comhairle

I will not debate the matter with you now, Deputy. I have given you the reason the amendment was deemed to be out of order. The Deputy has been urged to refrain from making a Second Stage speech. He must speak to the section.

The Progressive Democrats' water management proposals are that meters be installed in the case of all consumers of water. These proposals are in line with the principles of good water management policy as expounded by the guidance document, Water Distribution Network; Management and Leakage Control, circulated to all local authorities by Minister Howlin in July 1996. The Progressive Democrats' policy proposes the installation of water meters——

Today's policy.

——to be completed by the year 2010. We are aware of the cost involved and realise this cannot be done in one year. It is a policy that would be implemented over a period of 14 or 15 years. These meters would be required to measure all water consumption. In the case of domestic dwellings, a free allowance of water should be made available to each household. Charges should only come into operation as a control against excessive use.

Starting when? In 2010?

That is a clear policy. We should begin a programme of installing meters in the homes of all consumers of water.

When do the charges start?

We cannot have proper management if we do not have the vital statistics with regard to the product being managed.

Will the charges begin in 15 years?

It is clearly stated in paragraph 8.2 of Water Distribution Network; Management and Leakage Control that “the key to any general water demand management strategy is metering, since, without knowing how much water is being used, and by whom, it is impracticable to devise and implement a demand management strategy which would be seen to be fair by the community at large”. We subscribe to the principle enunciated in this document which the Minister circulated to all local authorities and in which he told them they must follow the guidelines laid down in the document.

That document is copiously quoted in a directive the Minister issued to the local authorities on 11 September 1996 to draw up a water management conservation programme.

Deputy Molloy has spent 15 minutes on this.

An Leas-Cheann Comhairle

Deputy Molloy must be factual. He has been speaking for 14 minutes. He is making a Second Stage speech.

I understand the Minister does not like what I am saying——

An Leas-Cheann Comhairle

That is not the reason, Deputy. The Deputy must speak to the section or resume his seat.

The sheer hypocrisy of the Minister is unbelievable when one reads the documents issued by him to local authorities. Local authorities have complied with that document. My own county, County Longford and other counties are installing meters at the behest of Minister Howlin, yet this amendment refers to metering. The legislation already exists to install meters. The Minister is instructing local authorities to ensure meters are installed to give them the vital information in regard to the consumption of water.

An Leas-Cheann Comhairle

I must ask the Deputy to conclude. I have given the Deputy a great deal of latitude and I am sure he will appreciate that.

It is stated in the manual to which I referred that "where universal metering is the norm, a common technique is to adopt a ‘rising block' tariff in which the quantity for basic use is charged at a low rate, but as consumption per billable period increases, the unit rate rises in stages to rates which, at the highest, may be several times the basic rate".

That relates to commercial users.

This is all in a document that the Minister issued for guidance to local authorities. The manual further states that from a purely technical standpoint universal metering of all customers is desirable.

Commercial customers.

The Progressive Democrats subscribe to the principles enunciated in the Minister's document. It is interesting to see the Labour Party trying to dismantle some of the bad legislation brought in by it in the past which it was reluctant to implement. It took a heavy defeat in a by-election to stir them. We want to see a fair system introduced.

I wish to respond to some of the comments which I cannot allow to go unanswered.

Does the Minister deny these documents? Does he deny the ESRI and the European Union?

We were making very good progress on Second Stage until Deputy Molloy ambled in close to midnight. He is doing the same thing for the second phase of this. We were making constructive progress, genuinely addressing the issues and, in fairness to the Progressive Democrats spokesperson who normally is constructive on this——

Do not try to be condescending on this.

——he does not need the help of somebody like Deputy Molloy.

I know it is embarrassing for the Minister.

I understand the difficulty for both Progressive Democrats Deputies tonight. They have a great difficulty and it is, in the phrase coined by a very distinguished and honourable Member of this House, a Member of Deputy Dempsey's party, the "tyranny of consistency". It is difficult for the Progressive Democrats to have any position on this because they have only very recently taken an interest in the whole issue of water. When I published the KPMG report last June on water charges, on metering, on costings, there was not a peep from the Progressive Democrats; they could not have cared less. Deputy Mary Harney did not even realise the report existed when she made her initial comments this year, some eight or nine months later.

We have heard now the fourth position from the Progressive Democrats on this. The first position was Deputy Bobby Molloy's position which was to pay any sum to solve the problem. For ease of understanding let us call it the "blank cheque" position à la Bobby Molloy.

We seem to be having another Second Stage speech.

Will the Minister give me an opportunity to respond?

No, I will not. I listened to the Deputy for 20 minutes.

An Leas-Cheann Comhairle

It is not in order. I will call the Deputy only after the Minister has delivered a substantial section of his speech. He has only risen to his feet.

The second position, Deputy Harney's position slapping down Deputy Molloy's position, was to return to the old system, that there is nothing wrong with it.

These are fairy tales. Only the Minister believes them.

That lasted a couple of days. We will call that position, for ease of understanding, the "back to the charges" position. That survived for a couple of days. The third position——

An Leas-Cheann Comhairle

I would like to get back to the Committee Stage debate. I say that to all concerned.

I seek from the Chair the same latitude he gave to the Deputies opposite, no more. The third position, expounded very briefly after the second position proved to be untenable, this time by a third spokesperson of the Progressive Democrats, Deputy Michael McDowell, was to meter all water now. We will call this the "dig us out of a hole" position. The fourth position was reiterated tonight by Deputy Molloy. It is to meter the water, but not just yet. For ease of understanding we will call that the "Thomas Aquinas" position.

That was not Thomas Aquinas.

Correct me on the saint.

It was St. Augustine.

The Deputy is quite right.

Anybody who does not know the difference between Aquinas and Augustine has a raw cheek to come in here——

I have obviously struck the right chord. The fourth position from the Progressive Democrats we have heard tonight is the most bizarre of all because, in essence, what they are saying is that they want to meter all the water, that they will start now but it will not be in position until the year 2010. No Minister ever came into this House saying that we had to have fiscal rectitude and charges, to get the economy and everything else right and that we will start in 13 or 14 years time. It is the most bizarre and pitiable position I ever heard put forward on any issue. It is irrelevant to any of the issues faced by Government here and now.

Nobody believes the Minister. They do not believe him in Galway anyway.

It is probably a good perspective on the next time the Progressive Democrats will be in a position to influence public policy.

An Leas-Cheann Comhairle

Perhaps I could put the question. I cannot allow Deputies to continue with this.

Very valuable points were made by other Deputies in this debate. I want to briefly answer the two questions posed initially by Deputy Quill. Deputy Quill wants to know who will pay for Cork water and who will pay for Dublin water and all the other water.

I was referring to waste water.

Yes. The bulk of charges currently falls on the biggest polluters who are the commercial sector. The commercial sector is untouched by all of this, a point totally lost by Deputy Molloy, since it is metered, properly and correctly. The import of the decision we have made is simply to abolish domestic charges. The commercial sector pays not only for the actual use of water but towards the infrastructural costs.

The Deputy wanted to know whose advice I took. I took a lot of advice. I took advice from the people, a terrible sin in the eyes of the Progressive Democrats. I listened to the views of the people expressed through the ballot box, through discussions, through our own councillors group, through our parliamentary party. I am open, and will be for as long as I am in public life, to the views of the people and I make no apology for that. I also listened to expert advice. The KPMG report that I commissioned and published, on which I invited debate and on which I held a press conference last June which did not excite the interest of the Progressive Democrats, said that metering households to measure water consumption was not a viable alternative to the current system of water charges, that it would cost £200 million to put the infrastructure in place, that it would take years to do it and that it would cost £8 million a year to monitor and deliver. Rather than spend £200 million on putting in a metering system at the end of line for households, I made a decision to spend that money instead on real conservation, on real infrastructure, and I made no excuse regarding that. It was the environmentally correct, socially correct and economically correct thing to do.

In terms of water conservation I have announced an investment scheme of £32 million in Dublin water which will reduce leakage in the system by 22 million gallons a day. That is where scarce capital should be invested. I intend to replicate that across the country. That is a much more environmentally sound approach than putting meters at the end of a leaking system.

Deputy Molloy rose.

An Leas-Cheann Comhairle

I will not call the Deputy again. I am putting the question

Why not?

An Leas-Cheann Comhairle

Because I am tired of the Deputy's interruptions and his disregard for the Chair.

Let me ask one question. Lest I did not hear the Minister aright, did he tell the House that the commercial sector will carry the total running cost of waste water treatment plants?

Of course not.

Is that what the Minister said?

With respect, this is PD twisting again. I said the commercial sector would pay a proportion of the costs as it always has done. The abolition of the domestic charge will not affect the bulk of charges for water and waste water treatment which has always fallen on the commercial sector. That point appears to be lost on the Members of the Progressive Democrats present.

It is not.

The general funding mechanism that will be put in place under the Bill goes beyond that.

The Minister said the commercial sector will pay a portion of the cost.

As it always does.

Who will pay the remainder of the cost?

The general cost of all local services is carried in a general way.

What does that mean?

If the Deputy had been here for the earlier part of the discussion he would know that I have allocated the entire resource of motor taxation to local government funding. That is a buoyant ring-fenced source of funding. There are an infinite number of other charges available to local authorities for the services they provide. Service charges have been a tiny portion of total local government income. This year the Government is investing some £150 million in water and waste water treatment, the highest level of investment we ever made. Despite the comments from Deputies opposite. I am confident of getting an increase on this sum for next year and for the end of this year through the European Union because of the necessity to put in place an infrastructure that will deal with all waste and ground water issues. Before Deputy Molloy went off on a tangent, he made some important points about water pollution. Those issues are on my agenda and in train to be implemented. We will have ample opportunity during Question Time and other debates in the coming months and years to deal with those issues.

In regard to what the Minister said about payments for waste water disposal——

An Leas-Cheann Comhairle

We are not dealing with that, we are dealing with the powers of local authorities to levy charges. The Deputy must be relevant to the section or resume his seat. I have given him a great deal of latitude on this matter.

I am referring to what the Minister referred to.

An Leas-Cheann Comhairle

The Deputy must be relevant to the section.

My point relates to the charge for waste water and the Minister referred to that. He is aware of a project in my constituency which can be developed in two ways, one of which would incur annual charges of approximately £180,000 and the other approximately £500,000. Is the Minister saying the State will subsidise the difference or will it have to be made up from the resources of local authorities?

That is worthy of a parliamentary question.

Is it not true that in view of the statement from the European Union today future grant-aid will be limited to 80 per cent instead of 85 per cent, the Exchequer, through the Minister's Department, will have to pay 20 per cent of the cost of all sanitary projects? That will involve an enormous cost over a period of years. One of the successes of the Fianna Fáil-PD Government was to secure 85 per cent grant aid from the European Union, but that will now drop by 5 per cent. The level of home financing required will hinder our capacity to take on large infrastructural projects and in the case of the project in my constituency home financing will run into millions of pounds.

The total sum available from the European Union is fixed.

I know that, I am talking about charges.

There is no point in trying to answer the Deputy's question if he does not listen. The total sum available from the European Union will not change. This Commissioner's decision does not relate only to the abolition of charges, it also relates to the volume of projects this Government submitted to Brussels to draw down money. I am determined that every scheme will be advanced as quickly as possible. The reality facing future Governments is that Cohesion Funds will be less than the necessary funding to carry out all the work we are required to do under European law. There will have to be a domestic input. I have explained this many times at Question Time during the past two and a half years. Not one penny will be lost from the change. It will allow us to develop more projects, which we would have to develop in any case.

It will cost us more.

I am adamant the maximum possible number of projects will be funded and put in place to ensure every citizen has access to a clean water supply. The decisions I have made regarding group water schemes and individual grants for people who have forgotten to sink their own wells and provide their own rural water source is an indication of this Government's commitment to ensure every citizen has access to a clean and pure water supply.

The Minister is not giving the full picture to the House. My query does not relate to the total amount of money available. Up to now if Brussels made £100 million available, the State had to provide approximately £15 million. That figure will increase to £20 million. Therefore, in the case of every £100 million spent on infrastructural projects the Irish taxpayer will have to provide an additional £5 million.

That is a perverse way of looking at it.

It is true.

It is not.

One of the main difficulties the Government of which I was a member confronted related to generously funded EU infrastructural development projects which placed a huge burden on the Irish taxpayer. We succeeded in securing an increase in grant-aid from approximately 70 per cent to 85 per cent for specified countries. Up to then, for every £70 million spent on a project we had to spend £30 million, but because of our low level of development this placed a huge burden on taxpayers and limited the amount of work we could undertake. It was cause for celebration that the negotiators succeeded——

An Leas-Cheann Comhairle

What has this to do with the issue in hand?

Nothing.

It relates to what the Minister referred to, the overall financing of these proposals.

An Leas-Cheann Comhairle

It relates to matters that were discussed some time ago when the Deputy was not in the Chamber. They were relevant then, but not now.

We are dealing with section 12, which will eliminate a system of funding. The Minister's decision will mean the Irish taxpayer will have to carry an additional £5 million in every £100 million spent on infrastructural projects. The Minister made a glib statement to the media and to the House that no money will be lost in terms of what will come from Brussels——

Is that not true?

It will cost us £5 million extra for every £100 million.

Every project must be 100 per cent funded. Under the waste water treatment directive, we are legally obliged to fund every project that needs waste water treatment. We have no option in the matter. We know that total funds from Europe, which have not been diminished by one penny, will not meet the full account. Irrespective of whether we pay 80 per cent or 85 per cent, we will meet the full cost of approximately £1.3 billion to implement the provisions of the waste water treatment directive to provide a quality water supply for every citizen. Regardless of the percentage we receive from Europe the balance must be made up from the Exchequer and we are determined to do that as our economy thrives under good Government.

It will be £20 million instead of £15 million.

It is perverse economics to say that if Brussels is giving us £600 million, we will not get that. That amount will not be changed by one brass farthing. We will still get £600 million, the job to be done is unchanged and it will cost us more. The Deputy is silly and illogical. This has been explained to him, but he persists with his argument for base political reasons.

Question put and agreed to.
Section 13 agreed to.
SECTION 14.

An Leas-Cheann Comhairle

Amendment Nos. 19, 20, 22, 23 and 24 are related to amendment No. 18 and it is suggested, therefore, that amendments Nos. 18, 19, 20, 22, 23 and 24 be taken together by agreement. Is that agreed? Agreed.

I move amendment No. 18:

In page 16, subsection (2), line 5 to delete "within the Department".

This section deals with the establishment of a local government value for money unit. I will speak to all the amendments taken together. Members on all sides agree we need to get more value for money for every pound spent by local authorities. Many local authority members throughout the country agree on that, as do a number of managers. Taxpayers also support it and want to see value for money.

The Minister proposes the establishment of a unit in his Department which would carry out value for money audits in local authorities. I disagree fundamentally with that unit being within the Department of the Environment. It should be independent of the Department and its audits should be carried out independently of the Department and the equalisation council. If the Minister wants to get the message across to the people that he wants to adopt a hands off approach to local government and to interfering with the money he said he will make available to local government, he must take his hands off the value for money unit.

I hope that unit will be used by the equalisation council and others to establish criteria and to measure how local authorities meet the criteria set by the Minister, in the first instance, or that unit at a later stage. Irrespective of what Minister is in the Department, there would be a whiff of political interference if that unit were within the Department and not separate from it. I have no objection to officials in it advising the Minister or referring to him particular reports or him having a right to suggest or to direct them to carry out value for money audits in specific local authorities, areas of local authority business or other headings but I have a fundamental difficulty with that unit being part of the Department of the Environment.

Through the good work of the Comptroller and Auditor General we have a system that works in terms of supervising and examining Government expenditure. Since the value for money audit was put in place for the Comptroller and Auditor General useful information has been garnered and useful actions have been taken by various Departments. I envisage this local government unit would act in a similar manner.

Will the Minister ensure this unit is completely independent of his Department? This unit will be important in the future. It will be an important part of the concept of equalisation of independence in judging local authorities on their merits as to how they undertake their work and value for money they provide. While the Minister and I disagree on various aspects of the financing of local government, one of the areas on which we are at one is getting value for money. One way to do that is to have a completely independent audit system.

I am aware of the local government audit system in place. I would not want people in that service to think I am casting aspersions on their work. We are moving into the area of getting value for money, a different one from the book-keeping exercise carried out by the auditors at present. As an indication of his earnest intent to give as much freedom as possible to local government and to give it independence, will the Minister accept my amendment and the other related ones, particularly amendment No. 19? It seeks to delete the reference to "officers of the Minister and local government auditors" and substitute "suitably qualified persons". Those persons may be former officers or local government auditors, but part of this section implies the Minister will hand pick people from his Department to do this work. I am not alleging any political favouritism. This unit should be independent of the Department and the people appointed to it should be independent of the Minister.

Amendment No. 20 also seeks to underline the independence of this unit. The Minister proposes that this unit would operate only on the basis of requests from him, but it should make its decisions on audits it wants to carry out, studies of systems, practices and procedures as outlined in this section. If Ministers were to hand-pick people at the behest of officials in their Departments, we would not get value for money. At times political decisions would be made to turn a blind eye to the waste of money in a particular local authorities because that might be a cause of embarrassment to a Minister or his or her party. The thrust of my amendments is to ensure the unit is independent, that the officers who work in it are independent and have an independence of action over and above any direction the Minister might give them.

I ask the Minister to accept these amendments. As I said at the outset, no one could reasonably object to the Minister having the power to direct an audit but it appears from section 14 that the unit can only operate at his behest. We will not get good value for money or independence from such a unit unless it is allowed to be self-starting and independent.

I strongly supported this section on Second Stage. The concept of value for money audits is most welcome but what is at issue is how they are conducted. We are all ad idem that the audits need to be carried out and that local authorities and their clients would benefit from them. I support Deputy Dempsey's amendment because the audit should not be carried out by an arm of the Department of the Environment. The Department has traditionally had strong cultural links with local authorities — they have grown together down the decades. If we are serious about putting in place a new system which takes on board principles of value for money and best practice in respect of all their services, it is time we established the type of independent unit advocated by Deputy Dempsey, where the procedures would be subject to independent verification. The model for administering, adjudging and approving these schemes is already available — we can use the Q mark or ISO 9000, which are independent outside models with their own criteria.

If the Minister administers the scheme in the way advocated by the amendment he will introduce a huge cultural change. Local authorities will be much more conscious of their customers and clients and of giving value for money. Apart from the direct benefits, that will have a number of downstream advantages also. For the most part, people are fair and if they think they are receiving a good quality and standard of service with value for money, they will support whoever delivers it and will be prepared to pay. The Minister will have a good Bill if he accepts Deputy Dempsey's amendment.

I respect the views expressed. The Deputies are worried that the Minister may hand pick people for the team, then they backtrack and complain about the team being within his Department because it will be linked to local authorities. I do not know how long it has been since some Members have served on a local authority, but the local government auditor is one of the strictest officers dealing with local authorities. Local authority members are notified of his arrival, when he will open the books, and what he wants to do. Elected people who are responsible to the public in the first instance have the right to be present. I do not know what happens in other counties but my county is one of the best because the local authority is anxious to ensure that the changes to its structure and the management initiatives will ensure it delivers a quality service to the people in a friendly way. That may not have happened in the past but we want to ensure it will in the future. We already have put structures in place for greater involvement of public representatives in all areas, including this one. The Bill provides:

A local government auditor may, in the course of an audit of the accounts of a local authority or at any other time, carry out such examination as he or she considers appropriate...

The Deputy is quoting from section 15 but my amendment is to section 14.

I hope the Deputy's amendment is not casting aspersions on the existing system which is extremely strict, is in accordance with the current law and involves local authority members. He appears to want to set up a quango or another outside agency which he will pull down from Heaven. The section will lay down a procedure, as the Minister has indicated.

Before the abolition of water charges was mentioned.Tipperary South Riding County Council discussed value for money and whether installing meters, the current obsession of the Progressive Democrats, would be justified. We were told that if we installed domestic water meters in every house, including those of old age pensioners who would only use a couple of kettles full of water per day, it would take five years to pay for the capital investment before people would start paying for the water. Even then, if one took into account the minimum one would have to charge without a meter and the amendments by way of relief schemes, one would never recoup the cost of installing meters for domestic supply. One must look at value for money when running local authorities and should not go off on a tangent. Meters were invented long before the Progressive Democrats were. They existed for domestic suppliers, farmers and business people who pay according to usage and rightly so. As the Minister said, they are paying a share toward development charges, development services and ensuring pollution is under control.

We should be honest about what we are doing. I have the greatest respect for Deputy Dempsey but these amendments do not make sense and I would like to hear the Minister's thoughts. The Deputy seems to want to set up a new independent body but I do not know who will appoint it.

The Minister is proposing the body in section 14. I am proposing that it be independent.

I support Deputy Dempsey's amendment. It would be most unusual — and also unsustainable — if these duties were coupled with the responsibilities of the local government auditor. We have a centralised bureaucracy which has grown under successive Administrations. Most people think it would be far better if we could gradually provide more power to local communities to do things for themselves as costs are inevitably reduced when people are directly involved.

As the Minister knows, there is a huge variation in the administration of local authorities. We might not be able to agree on what order to put them in but they fall into three broad categories — good, fairly good and not so good. I ask the Minister to tell us about the audits carried out in recent years in a variety of local authorities which indicate their efficiency or otherwise. I think he will be able to tell the House there is an extraordinary difference in the cost of various operations, which are supported by his Department and EU Structural and Cohesion Funds. That should not be the case. What measures have been taken by his Department to come to grips with these problems?

It has been my experience that any problems come back to the Minister and his Department, such as those associated with many of the bigger policy issues, negotiations in Brussels and a growing variety of coal face responsibilities in caring for the environment, such as dealing with new housing circumstances, the development of our road systems and sewage treatment facilities. More than most Departments, the Department of the Environment and the Minister deal with services which are essential to the public, and its wider role seems to be growing.

It is fairly logical from what Deputy Dempsey has said and supported by Deputy Quill, that we should try to move away from taking extra responsibility anywhere we can legitimately and logically do so. It must be clear to the Minister and his officials that with the recent growth of the system it has become extraordinarily burdensome, in terms of the requirements on the Department to cover the minutest details. We should try to move away from that.

I support the amendment which, in a sense, proposes a decentralisation of decision making processes. However, I am more anxious to hear from the Minister about the model being developed in his Department, arising from the enormous discrepancies in the cost of similar operations in different local authorities. That is not sustainable.

In essence, section 14 sets up the value for money unit in my Department on a statutory basis. Section 15 makes local authorities legally subject to value for money audits. I strongly welcome the very supportive contributions from both sides of the House, both on Second Stage and tonight. It is important that we get value for money. Opposition speakers are quite right that local authorities do not provide uniform value; we do not get the same return in every local authority from the investment we make. Deputy Michael Smith was generous in his categorisations as some of them could be categorised as quite bad in that regard.

Deputy Smith, my predecessor, will also have encountered the difficulty in the Department of having supplicant councils which are patently inefficient, looking for a rate support increase, while those who are efficient managers of the same resource are expected to do without. The policy was to virtually reward inefficiency because of the growing huge indebtedness of such councils. We must crack that nut. I am determined to get value for money in a very public way, which is the only way to do it.

We established the value for money unit in the Department on a non statutory basis, and it has been working feverishly. Last July we published the first series of ten reports by that unit. That was the first time any such reports were made available to the public. They cover areas such as purchasing, advertising, insurance, parking charges, photocopying charges, machinery yards, energy efficiency in local authority buildings, differential rents, property management and public lighting. Four further reports have been completed and will be published shortly, and a fifth report is already under way. I want to put that resource, expertise and talent which is available to me on a statutory basis.

I had to think very carefully about the points made by Deputy Dempsey. As is the case with the equalisation council, it is my view that the value for money unit should be at arm's length from the Department. Perhaps I am more focused on that because I am anxious to keep it at arm's length from the Department of Finance, rather than the Department of the Environment. The value for money unit might ultimately develop into an autonomous unit which requires an amendment of the statute, but I do not think we have got to that stage yet.

I am minded in this regard of the basic requirement of value for money, which is not to duplicate the expertise we have. We have a very independent unit with a great deal of experience and knowledge which I do not want to lose by duplicating it on an arm's length basis. As Deputy Ferris said, the local government auditors have always been genuinely statutorily independent in the performance of their functions and that will always be the case.

For those reasons, there is a great deal of merit in the thrust of the argument made by Deputy Dempsey. I do not think the time is right for it now, it would be disruptive of the work which is under way and would not be good value for money. However, I acknowledge there may be good reason in the future to establish the unit on an independent statutory basis to give it the degree of independence which Deputy Dempsey feels it needs. It works extraordinarily well now and will be strengthened by putting it on a statutory basis and clearly in charge of the local authority auditing system.

We will have remarkable results when we publish the value for money reports and the league table of performance. It will be a traumatic experience for many when we quantify the cost of collecting a ton of rubbish, lifting a bin or providing any service, and the time it takes to allocate a vacant local authority house. All this information must be published in league table form so that people can say whether they are acceptable.

I hope that in parallel to this we can also encourage local authorities to apply for the other independent audit procedures and evaluations which exist, such as the ISO system. Wexford County Council has them for motor taxation. If we change the culture from being another bureaucracy to a service industry which must compete in a service focused way and must comply with the norms of a service industry in the commercial sector, we will have done a remarkable day's work for the future of local government.There is enthusiasm to do that among the practitioners in councils, both at elected and managerial levels.

I greatly welcome what the Minister said on the independence of this unit. Value for money audits as distinct from the normal audits, will have to be totally independent. I tabled an amendment along those lines for Report Stage but I do not know how it will be dealt with.

As it is now 10 o'clock I am required to put the following question in accordance with an Order of the Dáil of this day: "That the amendments set down by the Minister for the Environment for Committee Stage and not disposed of are hereby made to the Bill; in respect of each of the sections undisposed of the section, or as appropriate the section as amended, is hereby agreed to in Committee; the Title is hereby agreed to in Committee; the Bill, as amended, is accordingly reported to the House; Fourth Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.