Amendments Nos. 37 to 39, inclusive, are related and will be discussed together.
Water Services Bill 2014: Committee Stage (Resumed)
I move amendment No. 37:
In page 12, between lines 16 and 17, to insert the following:
“(4) When this section comes into operation—
(a) Irish Water shall undertake to delete all PPS numbers collected to date within a period of four weeks after this section comes into operation,
(b) the Minister will mandate the Data Protection Commissioner to produce a report confirming that Irish Water has deleted all PPS numbers previously collected,
(c) the Minister shall lay this report by the Data Protection Commissioner before each House of the Oireachtas as soon as may be after its completion.”.
This amendment relates to the verifiable deletion of PPS, personal public service, numbers. Last week there was news coverage of how the Department of Social Protection had perceived an issue with Irish Water’s request to it for a major data dump of all PPS numbers.
A commitment that PPS numbers will be deleted is not sufficient as this must be verifiable. The numbers were regarded as potential assets that could be sold in the future so it is essential, now that the decision has been made not to proceed with the collection of PPS numbers, that those already provided by people are deleted. People must be satisfied that these numbers have been deleted and I presume the Data Protection Commissioner will certify the deletion. I would find the Data Protection Commissioner's certification of deletion to be a satisfactory resolution to this issue.
I think these amendments are very important because the collection of PPS numbers and the popular belief that they could be sold to third parties were huge issues. The letters that people received from Irish Water stated that the numbers could be sold in future to another company as assets and this is what really raised the ire of the Irish people. Deputy Catherine Murphy and I tabled an amendment to the Social Welfare Bill a couple of weeks ago requesting the removal of this measure and we were told provision would be made in this legislation to allow for same. As Deputy Murphy said, the Data Protection Commissioner should verify in a report that PPS numbers have been wiped from Irish Water's system. If the PPS numbers have been deleted, will new application forms be circulated or will they remain as they are? I support these amendments and hope the Minister accepts them as they amount to a simple request.
I welcome these amendments to section 11 as there are huge concerns relating to PPS numbers being given to, or demanded by, a utility company. The real concern is that down the line PPS numbers could be sold or handed to other operators and if Irish Water is privatised in future the numbers could end up with another corporate body.
I am a customer of the ESB and Bord Gáis and I have not supplied them with my PPS number so the demands of Uisce Éireann are out of kilter with other utility companies. The Minister has gone some way to address these concerns in section 11 but the amendments will strengthen the area as we must be careful with people's data and, particularly, data belonging to the State and the Department of Social Protection. This information should not be in the hands of corporate bodies that have no need for it so we must do all we can to put this matter behind us. The Minister should confirm, once and for all, that people's PPS numbers will not be in danger of falling into the hands of people who should not have them.
Like Deputy Brian Stanley, I welcome the commitment in the section confirming that Irish Water will no longer have the power to request PPS numbers. Just this week, an article in The Irish Times showed that if it had not been for the will of Department officials to resist the demands of Irish Water for these details the provisions on PPS numbers might not have changed. It seems Irish Water had the protection of the Government in seeking the numbers but I must take at face value the Minister's commitment in this matter. I ask that the Minister consider these amendments as a way to copperfasten his commitment by ensuring that all PPS numbers that were collected will be deleted within four weeks of the passing of this Bill. I ask also that the Minister mandate the Data Protection Commissioner to produce a report confirming that the numbers have been deleted and lay this report before the House as soon as possible thereafter. The Minister must assure people that there is no prospect of collected numbers being retained or used, irrespective of what Irish Water does or is directed to do by the Government in the future.
I do not know why there is such concern over PPS numbers being given to Irish Water.
They could be sold on.
The Minister is removing the provision.
Every sole trader in the country who receives a payment from a State organisation, be it the Garda Síochána or another organisation, must supply a PPS number to receive payment. Around five years ago I was requested to give my PPS number and the PPS number of each member of my family to the VHI and I do not recall anyone in this House ever raising concerns over this practice by the VHI.
This issue relates to the need for a unique identifying number and members of the Opposition have called in this House for unique identifying numbers in the health service as they can help in the administration of large organisations like the HSE and Irish Water. Unique identifying numbers can help in the smooth running of organisations. Many questions were raised in recent days on the cost of the administration of Irish Water and all sorts of figures were thrown around. Deputy Donnelly suggested the cost would be €60 per person and that sounds crazy so I ask that the Minister respond to this. Deputy Stanley may feel I am picking on him when I raise the matter of Northern Ireland Water but surely that entity uses a system of unique identifying numbers to identify customers. In Northern Ireland bills are not yet sent to domestic users but they are sent to commercial users.
Try to stop them.
There must be some way of tracking customers and I ask the Minister to comment on this.
Before I begin, I wish to inform the House that I will table an amendment to section 2 of this Bill on Report Stage. I previously indicated that the amendment would be introduced in the Seanad so I wanted to update Members on this change. The amendment was discussed in detail in this House in the course of debates on the Bill and I believe it will be welcomed.
This section is important and I know the amendments tabled were put forward in the right spirit. The Government announcement in November simplified water charges, gave much needed clarity on the level of the charge and gave certainty that capped charges would remain in place until 1 January 2019. It is clear that the collection of PPS numbers was an unpopular issue with many people and caused concerns. Those concerns may have been unfounded or may have been well-founded but there is no point debating such matters now as there is no longer an issue. I listened to the concerns that people raised and the changes to this Bill resulted. The House broadly welcomes these changes although there are some issues relating to the process and timelines that we are now discussing.
The new simplified system means PPS numbers no longer need to be collected. Section 11 of the Bill provides that Irish Water will no longer have the power to request details of PPS numbers. The section will be commenced by the Minister for Social Protection following consultation with me, the Minister for the Environment, Community and Local Government.
In the meantime, Irish Water has commenced work on deleting the personal public service data which had been collected up to this point. Irish Water has stated that the deletion is being carried out in accordance with a protocol the company has developed in consultation with the Data Protection Commissioner. There is information on the Data Protection Commissioner's website, including a summary and a further document on the matter. I will put copies of these in the Library, making them available to Members. They summarise in considerable detail the process, the protocol and how it works. Any Member can go through them if they so wish.
The exercise will take several months to complete. It is a rather technical exercise and it is important that it is carried out properly. Reference was made to time limits, restrictions and being prescriptive about it, but I will not accept the amendments put down by Deputies Donnelly, Cowen and Murphy, although I understand and accept the premise on which they are based.
This is a technical exercise. I have some experience in this area. In a previous life I worked in roles that involved mass data management. This technical exercise will be undertaken by Irish Water. It has to be done correctly. The most important thing is that it is done professionally and correctly in order that we will have closure on the issue. I would rather see it done that way than put down a prescribed time or try to live by something that is perhaps not achievable.
It is not only a question of the manner by which the PPS number data in Irish Water is cleaned up and gone through in the various workstreams, it is also important to ensure that all the data is cleaned up from various media including online, paper form, voicemail and so on. More important, once Irish Water has gone through the process, it is important that a rigorous analysis is carried out to ensure absolutely everything has been done and that takes some time.
I appeal to the Deputies who have tabled amendments to accept that this is the process. I understand the detail and why they put down the amendments but bringing in the relevant section on day one was the right thing to do. There is now a protocol in place between Irish Water and the Data Protection Commissioner and I believe this is the appropriate way in which this should be done.
Certainly I will examine the process that the Minister is going to make available in the Library. It is important that people understand the process. It is not only a question of public concern in terms of learning lessons. There were concerns in the Department of Social Protection as well. Were the concerns of those in the Department of Social Protection discussed when this was being framed in the first instance? Was the Minister privy to the detail given that it involved a previous Minister? Does the Minister believe the process amounts to good practice?
I got a letter from the Data Protection Commissioner stating the legal structure for the process of the collection of personal data had been signed into law under the Water Services (No. 2) Act 2013. The legal basis has the effect of setting aside the relevant restrictions on the processing of personal data as set out in section 2 of the Data Protection Act, which would apply otherwise. There should be some acceptance that this is bad practice in the context of future legislation. We should not set aside the normal process under the Data Protection Acts for the purposes of providing for the collection of PPS numbers. That would seem to me to be bad practice. We have the Data Protection Acts for a good reason. They are in place to protect individuals and their privacy. The mistake was to include the provision in the first instance. At the least, lessons should be learned about how we proceed in future.
I am keen to hear the Minister's reply. It was interesting to read the articles about the concerns of the Department of Social Protection. There will be costs associated with deleting the data. I accept the data come in different formats and therefore we must verify them. I am prepared to withdraw my amendment on foot of the assurances we have been given.
On foot of the Minister's response I will not move my amendment. I look forward to seeing the information to be provided in the Library. It will be useful to pass on the information to the relevant parties to assure them that every effort is being made on the part of Government to correct the initial decision, which met with such public disapproval.
I wish to speak on this particular section and the particular issue.
I want to deal with the amendments first.
I am talking about the amendment.
Two of the amendments have been withdrawn and we are now left with one.
Amendment No. 37 is still on the table.
Amendment No. 37 is on.
I could be creating a precedent in the House if I read into the Official Report my PPS number. I do not mind. If anyone wants to know my PPS number, they can give me a shout. In the case of almost every constituent for whom I undertake political queries, whether relating to medical cards, housing or other difficulties, part and parcel of the request involves their PPS number. They all know them off by heart and they give them to me.
That is Deputy Eric Byrne's choice.
What is this business of a song and dance about PPS numbers? If Deputy Cowen wishes I will give him my PPS number or read it into the record and the whole world can see it.
I am not bothered, to be honest.
This is the greatest deviation from a theoretical debate that I have ever heard. Everyone has a PPS number. There is no big fear about giving a PPS number.
Deputy Eric Byrne does not speak for everyone.
I would love to ask my constituency colleagues whether they ever ask their constituents for their PPS numbers when making representations on their behalf. If they told me that they do not, they would be telling me lies.
Would it be appropriate for me to read into the Official Report my PPS number?
Very well. I will not do so.
It is 666.
It is like the Soviet Union.
No, we will not have that.
If it is against the rules of the House I will not do so, but if any of my constituents want to ring me to ask my PPS number, I will be glad to give to them.
Thank you, Deputy.
If this water authority accidentally forgets to delete my PPS number, which I have registered, I will not take it to court. I am happy for the company to keep it in the records.
Thank you, Deputy. It is open to Deputy Catherine Murphy to withdraw amendment No. 37.
I wish to reply because some questions were raised. I wish to correct something. I inadvertently referred to the Data Protection Commissioner's website instead of Irish Water's website. The protocol that I am making available is on Irish Water's website.
Deputy Catherine Murphy asked about the discussions in respect of the Department of Social Protection but these preceded my tenure and I know the Deputy respects that. The Department of Social Protection is the guardian of PPS numbers. There were discussions on the matter. Were there concerns? I know there has been some media profile on the matter but if there were concerns I was not privy to them and therefore, I cannot elaborate too much on the matter to be honest.
There are various workstreams under which the PPS numbers are available. I wish to reflect the level of depth on this matter. There are scanned images of application for allowance forms. Another Deputy asked a question about the forms. There are new forms. There are paper application for allowance forms. There are voice recordings. There are Irish Water customer information technology system areas. There are other electronic formats, for example, e-mail and electronic backup data. In respect of the scanned images of application for allowance forms, the PPS information will be manually redacted.
The process, which is quite seismic, considering the number of forms, is under way. In the case of the application allowance forms, once scanned images are redacted and quality assured, the paper forms will be systematically destroyed. Voice recordings containing PPS information will either be redacted or deleted, depending on the circumstances. SEPA guidelines prohibit the deletion of all calls as Irish Water is required to retain direct debit information. Components of phone calls will need to be redacted. I refer to the significant quantity of e-mails which will need to be processed as well as training material and other ad hoc electronic pieces of information, all of which will require detailed examination.
Backup information of data is another significant consideration. The management of data at this level involves a very great quantity of backup information. I can understand why this is the case. This backup information is stored in a secure off-site location with firewall protection and to which access is highly restricted. This backup material will also need to be processed.
The work streams must be examined and with a thorough re-examination to ensure that every single PPS number is deleted. This is the protocol being operated with the Data Protection Commissioner. That is the way in which it should work.
It is very easy to quickly remove a large bulk of PPS numbers - I am pretty sure I could do it myself - however, the process to ensure complete and utter guarantee that 100% have been removed, requires a more sophisticated approach. I hope the Deputies appreciate the technical detail which is included in the process.
I thank the Data Protection Commissioner's staff for their co-operation with Irish Water in this process. I suggest that at some time in the medium term - not late next year or anything like that - that Irish Water would come before the joint committee to confirm that the process has been completed. At that point I could then call on the Data Protection Commissioner to audit Irish Water in order to confirm that the appropriate process has been completed and that the PPS numbers have been deleted. It is a matter for Irish Water to work through the protocol with the Data Protection Commissioner but if this accountability gives greater comfort to individuals I have no problem in recommending that at some future date, to be agreed, once this technical process is completed - although I cannot give a date for completion because it is quite a technical ongoing process - that Irish Water would come before the joint committee in order to confirm that this process has been concluded and that everyone is satisfied that this has been done in the appropriate way.
Amendment No. 40 is out of order as it is not relevant to the provisions of the Bill.
I move amendment No. 41:
In page 12, to delete lines 21 to 23 and substitute the following:
“ “21. The entire network (within the meaning of section 2(1) of the Water Services Act 2007) used for the provision of water services (within the meaning of that subsection) by Irish Water or a person who holds a water services licence under section 79 of the Water Services Act 2007 or land and buildings occupied by Irish Water or such a licence holder.”.”.
The purpose of this provision is that land used for provision of public water services is not rateable for the purposes of the Valuation Act 2001. This exemption will apply to Irish Water for the provision of water supply and waste water treatment and to group water supplies. From a financial perspective the changes arising from the provisions in this Bill will, in total, involve a reduction in revenue for Irish Water of €21 million in 2015 and €56 million in 2016. However, Irish Water's costs will also be reduced as a result of the approach to the treatment of water infrastructure for commercial rates purposes, such that the subvention does not need to be paid to Irish Water to fund this cost. Equivalent support is given directly to the local authorities through the Local Government Fund.
The intention of this amendment is that the exemption shall be restricted to Irish Water and to group schemes - this is important. This is a technical amendment and was prepared following consultation with the Department of Public Expenditure and Reform in order to clarify the scope of the exemption.
I have one question. I have no issue with the amendment but I am intrigued that there was a rates liability. I presume group schemes would not have been subject to rates just as local authority water supply and waste water systems were not liable. I find this provision somewhat confusing.
I have raised this issue with the Minister on a number of occasions since his motion containing measures to address the Government's mishandling of this process since its initiation 18 months ago. There is no doubt that the local authorities throughout the country were under the belief that they would benefit from and accrue the revenue from commercial rates applicable to Irish Water. This has been scuppered by virtue of what was contained in the motion, in this Bill and also in this amendment.
I am assured that the figure of €59 million is concrete and I am assured that the process of evaluation has been carried out to such an extent that this figure becomes more concrete. I ask the Minister to confirm to me today, yet again, that the figure of €59 million is absolute and is as a result of the scientific analysis of the networks - a result of that analysis having produced valuations throughout the country which he stated yesterday have amounted to €11 billion. Can he quantify - if not today but by placing the information in the Oireachtas Library - the total valuations for the country? I refer to a parliamentary question I submitted on 25 or 26 November in which I asked the Minister for Public Expenditure and Reform if he could provide details of the commercial rates liability of the semi-State companies and make a statement on the matter with particular emphasis on the likes of Irish Water. I was assured that the levying of rates is a matter for local authorities and the amount of rates to be collected from a rated occupier, whether a semi-State company or otherwise, is the function of the annual rate or valuation, ARV, set by each local authority and the value of the property on the valuation list. That is my reason for seeking the placement, on the public record and in the Oireachtas Library, of the valuations pertaining to all those assets throughout the country amounting to €11 billion, as stated by the Minister yesterday.
I am conscious of the Minister's comment, when commending the amendment to the House, that the scope of the investigation had not yet been finalised. I am none the wiser in this regard and perhaps the Minister might advise me of the position. As minimal as that statement from him was, does it indicate that the figure of €59 million is not set in stone?
During the debate on Committee Stage Deputies have sought a great deal of clarification of the figures the Government has produced. Last week, for example, when the House discussed the €130 million estimated cost of the conservation grant, we had the debacle of the Minister stating the figure could increase by €36 million. The explanation given was that the scheme would be demand-led. I assume the Minister expects 100% compliance with it, given the fanfare with which the introduction of the conservation grant was announced. Not alone has the House not been provided with exact information on the costs associated with the conservation grant, but Deputies specifically have also sought details of the costs the Department of Social Protection will incur in administering and allocating the grant. I hope this information will be provided in this or the Upper House before the debate on the Bill concludes. How many staff will the Department of Social Protection require over and above its existing complement to administer the grant? What will be the cost of these staff and what other administrative costs will arise?
Last night we were given information on the €460 million to be provided for the Housing Finance Agency on foot of obligations and liabilities on the part of local authorities. We were not aware that this amount was to be paid to the agency until the relevant amendment was introduced. As I stated last night, this measure contravenes and contradicts the Water Services (No. 2) Act passed by the House at this time last year. If Deputies had been able to adequately scrutinise, investigate and question that legislation, we might have secured a change of heart by the Government in the past year. The Government did not return to the House to seek its authority or permission to repay this loan. Perhaps it believes it does not need our permission, given that it has a substantial majority in the House. It is disregarding the democratic process and the authority of the House which assumes ownership of the process of disbursing taxpayers' funds.
I expect the Minister to give a commitment to place in the Oireachtas Library information on how the Department arrived at the figure I outlined. If he is unable to give such a commitment, given his statement that the liability is ongoing, will he indicate whether it is likely that the figure will increase? If so, what will be the timescale? I find it unfortunate in the extreme that he is rushing this legislation without providing the relevant figures for the House.
The Government informed the House on dozens of occasions in the past two or three years, including prior to the establishment of Uisce Éireann, that the new entity would be a stand-alone, commercial semi-State company. While I accept that Irish Water was conceived by the previous Government, the Government gave birth to it and made it its favourite child.
According to the Minister, Uisce Éireann's rates liability will be approximately €59 million per annum. However, the Government proposes to wipe the slate clean and force local authorities which are already starved of funding to carry the company's rates burden.
Last night we learned in respect of the money borrowed from the Housing Finance Agency for investment in water services, that the Minister for Finance would provide €460 million or almost €500 million to pay off this loan. This means that taxpayers will pay off the loan and that the liability will not transfer to Irish Water. As such, assets will transfer to Irish Water, while liabilities will not.
On the basis that Irish Water will not meet the criteria set by EUROSTAT, the Minister decided to create an imaginary water conservation grant.
It will meet EUROSTAT's criteria.
I do not know how you can keep a straight face when defending the water conservation grant.
The Deputy must speak through the Chair.
I apologise. I do not know how the Minister or the Minister of State can defend the grant.
The Government allocated €468 million from local property tax revenue to Irish Water. The Minister and his predecessor, Mr. Phil Hogan, stated the local property tax was to be used to pay for footpaths, public lighting, parks and libraries. An additional €530 million from the National Pensions Reserve Fund is being buried in the ground because the water meters will not be used for at least four years. In addition, an Exchequer subvention of approximately €250 million per annum will continue to be paid to Irish Water.
Irish Water, a stand-alone semi-State company, will be treated differently from other semi-State companies as it will not be required to pay rates. Moreover, Joe and Mary taxpayer will pick up the €460 million bill for its loans from the Housing Finance Agency. The €130 million cost of the conservation grant, a fiddly, funny money scheme devised to satisfy the EUROSTAT criteria, will also be borne by taxpayers. The Government will pay the grant with one hand and take it back with the other. The money borrowed from the National Pensions Reserve Fund was supposed to be used for pension purposes. I am not sure how much good it will do to bury this money in the ground in paying for water meters that will not save one gallon of water. In addition, we also have the ongoing Exchequer subvention. The Government is handing over a colossal amount of money to its favourite child.
Will the design, build and operate, DBO, and public private partnership, PPP, water and sewerage plants be liable for rates? In other words, will the companies that operate these plants be required to pay rates? For example, will a rates liability arise in respect of the Portlaoise wastewater treatment plant or will the €59 million rates liability that is being wiped clean include the rates liability of that plant?
Uisce Éireann's assets have not been audited. The Minister confirmed yesterday that a valuation or audit of assets had been made in only two counties. The Valuation Office has not made a valuation.
The assets are on the balance sheets of the local authorities.
The Minister of State will be able to speak in a moment.
The ESB, Bord na Móna and the remaining public element of Bord Gáis are semi-State companies that pay rates. Why will Irish Water not pay rates? What is the difference between it and other semi-State companies?
I have a problem with the prison in Portlaoise and Departments and Government offices not paying rates to local authorities. This causes problems in many counties, specifically County Laois where there is a concentration of Government buildings around Portlaoise town, although we manage the issue. The difference in the case of Irish Water, however, is that it is, according to the Minister, a stand-alone, commercial semi-State company.
While I would prefer if water services were still the responsibility of local authorities, the position has changed as a result of the Government's handling of the issue.
Irish Water will be given preferential treatment, on top of all the loans which have been wiped to one side and everything else that has been done. Shovel loads of money have been put into the hands of the company so it can pay large salaries and do whatever it likes. Perhaps it is being fattened up for privatisation down the line. Where does the preferential treatment end? What will be next? The Minister needs to re-examine the issue. There is a major liability in regard to rates. Local authorities were supposed to receive the LPT, but €486 million of the money collected in 2014 was taken from them. The Minister now proposes to make them carry a further liability-----
You gave it back
-----of almost €60 million.
I call Deputy Twomey.
I thank the Acting Chairman.
Do not make a comparison to the Soviet Union.
It is Northern Ireland, not the Soviet Union. I am somewhat confused-----
I am somewhat confused by some of the contributions. We have heard that water is a human right for the past couple of weeks and that everything should be for free. When the Government facilitates the establishment of Irish Water and keeps costs down, there are objections.
The taxpayers are still paying.
The Opposition wants to load it with more debt. It is confusing.
The State is still paying for it.
It is, but we are trying to get Irish Water going.
On balance sheet or off it.
One speaker. Sorry Deputies, you have already spoken.
I do not think other Deputies are being clear. I have been dragged into side arguments because there seems to be confusion within the Opposition as to what it wants out of Irish Water. I like other Deputies would like to make a comparison with Northern Ireland Water. Of the household charge in Northern Ireland, £160 goes towards water. Some £200 million of the block grant from Westminster goes towards water, which is the same as the current budget deficit in Northern Ireland. Perhaps water charges for individuals are on track in Northern Ireland, if one looks far enough down the road.
Norther Ireland Water is a good comparison for Irish Water in this discussion. I cannot find the information myself, but perhaps the Minister has come across it. What were the start-up costs of Irish Water compared to those for Northern Ireland Water? Has the Minister compared how Northern Ireland Water operates with regard to different payments and how people were transferred into Irish Water? It would be extremely useful for us.
The cost of installing meters in Northern Ireland was significant, which Deputies know are supposed to be switched off until at least 2016. Could the Minister provide that comparison and put on the Official Report of the House the start-up costs of Northern Ireland Water compared to those of Irish Water?
My answer to the question on BDOs is "No" because this is a public infrastructure and, therefore, they are all exempt. I will return to other questions.
This is a pretty simple process. It is about a pass-through cost that we are putting into the Bill. Prior to the establishment of Irish Water, the relevant local authorities were responsible for the operation of water services, as we all know. While some water assets were included on valuation lists provided by the Valuation Office for rating purposes, it was the position that these assets were, de facto, not revenue-raising for the local government system in terms of commercial rates. Any circular issued in regard to local authorities referred to repaying rates to themselves.
To be frank, this was a mixed bag. In some cases local authorities charged other local authorities for services. I understand Kildare charged Dublin a small amount. As rating water assets owned and operated by local authorities did not provide additional revenues to local authorities, it is likely that, in seeking revisions of valuations by the Valuation Office, the local authorities prioritised other commercial properties which would provide additional rates revenue. In other words, they looked at other commercial properties rather than water services.
It is important to point out that the Valuation Office resources for revision requests are limited and, therefore, the focus may have been on commercial premises that provided additionality in terms of local government funding. The revision practice varies from local authority to local authority. Some may not have sought valuation lists from the Valuation Office when the water infrastructure was commissioned in their administrative areas, for instance.
Another reason for the large variations in the water infrastructure valuation bases from county to county was brought about by the revaluation process undertaken by the valuation office. Water services infrastructure in a number of local authority areas, in particular the three Dublin local authority areas, Waterford and Limerick, would have modern valuations by virtue of having been revalued in recent years. The revaluation exercise will also pick up water services infrastructure in these areas which may not have been valued previously because of the changes which took place in Dublin, Waterford and Limerick. This process would, therefore, result in variations in valuations and larger valuations being placed on water services infrastructure in these areas.
Deputy Cowen referred to two separate processes. The valuation by the Valuation Office is for the purposes of levying commercial rates. However, I know the Deputy understands that the €11 billion valuation of assets is the book value of assets required by local authorities on all of their capital accounts, as my colleague said. That valuation needs to be significantly reassessed for many different reasons, such as depreciation. The Deputy asked about putting that information on the record. I will do my best to try to provide the information and place it in the Oireachtas Library as quickly as is humanly possible.
The payment last year was approximately €48.725 million and is expected to be €59 million next year. There is a circular movement of funds so that the cost base in regard to Irish Water no longer has the €59 million attributable to it. The cost base of Irish Water is lower, at €899 million, compared to expenditure, as a result of that. This is a technical matter and is progressive for Irish Water. It is something which should be welcomed by the House for Irish Water. From the point of view of the baseline of Irish Water, it is something which is necessary, and that is the reason we have introduced the change.
Deputy Liam Twomey asked about benchmarking comparisons with Northern Ireland Water or other water authorities. I have a document with me on Irish Water's establishment costs which the CER has examined and perhaps some Deputies have also, although I appreciate they may not have gone through the detail. The document makes comparisons between the set-up costs of Irish Water and Northern Ireland Water. Northern Ireland's transformation programme included similar sub-projects to those undertaken by Irish Water. Interestingly however, in 2009-2010 Northern Ireland Water reported that it was spending £127 million on investment projects. Irish Water's estimated comparable costs for items such as IT and networks were under Northern Ireland Water's set-up costs.
Are these gross or comparative figures?
They are comparative figures. The report is available to Deputies who wish to look at it.
The Minister's response has been somewhat meandering, rather than specific. Comments on this process have been made both outside and within the House and significant scrutiny is required to extract the information necessary, given the millions that have been and are being spent on this process.
This is not filibustering or about running down the clock, but it is necessary to extract information taxpayers are entitled to know. The Minister said in his meandering response - I took notes and may look at the transcript later to scrutinise his comments further before Report Stage - that the Valuation Office was understaffed, that some local authorities had carried out valuations, whereas others had not, and that the local authorities in Dublin and Waterford had many of theirs made and that there was a significant variation between theirs and others. He added that valuations were carried out by the Valuation Office of the assets and that the book value was €11 billion, but that figure must be reassessed to take depreciation, wear and tear into consideration and account of the fact that €48.725 million was paid last year in the form of commercial rates. Who paid €48.725 million last year to local authorities in the form of commercial rates on behalf of Irish Water?
Irish Water did.
On foot of valuations carried out by whom were these rates assessed and paid? On behalf of those I represent, I have been trying to extract from the Minister this necessary information before we proceed to the next stage, despite efforts by the Government to shut down the debate in 45 minutes, as happened on other sections, which contravenes the commitment made by the Taoiseach just two weeks ago. Did the Minister tell me in his response what valuations had been carried out and is the Valuation Office up to date on the networks transferred or which are in the process of being transferred from local authorities throughout the country to Irish Water? Have these valuations been made? When were they made? What are the valuations and how much is owing?
If the Valuation Office is not up to date and the excuse is that it is understaffed, when will it be staffed sufficiently to carry out these valuations and when will the local authorities be adequately resourced, as they should be, by virtue of the valuation and rate system we have in place, despite how archaic it is? Despite the Government's commitment to overhaul the system, it has failed to do so. The Government appears to have learned nothing from this sorry process. Does this prove once again that we are still guessing, still ill-prepared, still ill-advised and still in the process of scrutinising the legislation and finding fault with to the tune of a guesstimate in the realm of €59 million but which might be far more or less? The unfortunate position in which I find myself is that I just do not know. If it is not possible to provide the definitive answer that I have asked to be placed in the Oireachtas Library, will the Minister provide exact details of the €48.725 million paid on behalf of Irish Water to local authorities last year? I am not aware of the details from my consultation and conversation with members of local authorities. I do not have any definitive information at my disposal that valuations are up to date, that assets have been correctly valued and accounted for and that a commercial rate was applicable.
What is more, this lack of information further displays the rush on the part of the Government to further augment or subvent Irish Water's cost base. In doing this, it is putting at risk the model it has held up to view, which will allow it to borrow off-balance sheet in the future. With the subvention about which we have heard that may be applicable - at least €59 million - and the subvention about which we learned last night - €460 million - the figure of 44% that the Minister mentioned is a long way from the truth. If that is the case, it will take EUROSTAT to expose it because we will not be allowed to expose it because of the way the debate is to be guillotined as usual. The day this is exposed by EUROSTAT will be the day Irish Water which is built on sand will crumble.
This section has been developed because of one of the fault lines in the creation of Irish Water, that it cannot meet its projected costs. I am concerned that the proposal may have unintended consequences and wish to raise two issues on foot of the Minister's contribution.
We have a banking inquiry that is ongoing, part of the reason for which is that in the past consultants and various groups got their figures wrong. We are inclined to believe that what they present is always correct. I have gone through the two PricewaterhouseCoopers, PwC, reports on the preparations made for the setting up of Irish Water. Is the Minister satisfied that the figures PwC used for the other boards which it used as examples - mention was made of Northern Ireland Water and Scottish Water - are correct? Is he satisfied that PwC based its assumptions on the most recent and correct figures?
In regard to local authorities, we are all aware that the assets and liabilities were to be transferred to Irish Water. It is very difficult to put a cost on assets. A number of years ago in my county the Department of the Environment, Community and Local Government carried out a survey of the water supply from County Wicklow to County Dublin. I understand it would not have been financially viable for the authorities in County Wicklow to seek to take it back owing to the cost required to be met in repairing the system. What liabilities or loans that should have transferred from local authorities to Irish Water have not been transferred? Perhaps the Minister cannot provide that figure today, but will he provide it at some stage?
He told us last night.
Approximately €160 million.
I am sorry, but I was unable to be present last night. The Minister need not respond on that issue.
I will pick it up in the transcript afterwards.
The section reflects the quagmire the Government is in as it tries to get the legislation through. As local authorities anticipate the collection of commercial rates from semi-State bodies and other companies, the Minister has introduced an amendment to ensure Irish Water will not be rateable from the point of view of its assets. He said the Local Government Fund would address the funding gap. The fund comprises VAT and motor tax and it amounted to an allocation of €1.2 billion to local authorities previously to fix the water services infrastructure. The money, therefore, is just being allocated in a different way, which is a farce. The Government parties have been on the back foot on this issue for the past number of months and they have introduced legislation that means nothing. They are following the orders of the troika to introduce a charge at the minimum level of €160 and €260 annually, even though that will have a huge impact on people's lives, and a conservation grant through the Department of Finance to try to cover all angles. The Government is trying to implement the word of its masters, the troika, and make it as easy as possible to bring this in in a Trojan horse manner up to 2018, when the full cost of recovery will have to be brought in anyway.
I welcome this change because it means that when Irish Water is abolished, there will not be the complication of going to the local authorities to deal with it.
The Minister referred to Irish Water as a commercial company and he mentioned group water schemes. Such schemes are co-operatives and they are non-commercial. They are not in place to make a profit and that is the difference. Deputy Twomey said the subvention is great because it keeps costs down but it is not plucked out of the sky. The €460 million we wiped out last night, which the Minister for Finance must produce, is taxpayers' money. The conservation grant of €130, which will be given with the other hand, will come from public money while the €186 million coming from the NPRF is also public money along with the €250 million Exchequer subvention.
The Minister made two contradictory statements. He said the rates were paid but he then outlined that even DBO plants operated by private companies are exempt from rates. The local authorities, which are under funded, will wind up picking up this cost. The Minister has said many times Irish Water is a stand-alone company and there should be no difference between it and the ESB, Bord na Móna or any other semi-State body.
They will be exempt.
This company has been given special spoiled child status by the Government.
Does the Deputy want to impose more charges on people?
The Government has given the company a blank cheque for the past two years.
The Deputy should speak through the Chair.
The Minister is continuing with this today.
I would like to allow the Minister to reply. The Deputy should resume his seat.
The taxpayer will pick up the cost for this monster the Minister has created.
The taxpayer will pay for the Sinn Féin model at a much higher cost.
That is what is happening in Northern Ireland with the household charge.
I outlined the position on loans last night with €150 million to be transferred. Group water schemes, which are the backbone of rural Ireland and which many Members are vocal about, will be exempt from rates. This is critically important because the people running them have worked for decades to provide an adequate water infrastructure for their localities.
Local authorities reflect their asset book value in their accounts in line with local government statutes and, therefore, the 2013 financial statements outline their value. When the assets transfer to Irish Water, they will be shown leaving local authority accounts and showing up in Irish Water's accounts in line with financial standards.
Irish Water paid the bill last year. It was sent a bill like everyone else and it paid approximately €48.725 million. The company paid €15,000 in rates in County Offaly.
The Minister will find the valuation is far in excess of €15,000.
It is the same as for any commercial property.
The Minister without interruption. Deputy Cowen had his own innings.
The company paid €198,000 in County Mayo and €760,000 in my own county.
The figures are not up to date.
Allow the Minister to conclude.
We are exempting these from rates through the legislation. This is a pass through cost which supports Irish Water in what it is doing. It is the right thing to do. The company will be exempt from rates. It is a case of one side of the Exchequer paying another side.
A number of Members expressed concern about the cost base and the market corporation test but this is a helpful component.
Another Member asked about PwC. I have to accept the assumptions the company used and the work that was done. There has been a great deal of commentary about the CER. It is not up to me or anyone else to second guess the regulator, which is an independent authority that does a good job. There have been various criticisms of costs and so on but the CER independently verified everything and, for example, verified 95% of the set up costs. This is the independent regulator, which was asked to do this job, not the Minister or anyone else, and that should be respected. Second guessing the CER is not appropriate.
I ask that the Minister as a matter of courtesy to me and others place on the public record the valuations associated with the rates paid last year. He can put them on public record in the Oireachtas Library or wherever else he wants because there is no doubt they are a far cry from the real valuation associated with them. He said, for example, that the commercial rateable valuation on the network and plant in County Offaly is €15,000. My septic tank is worth that.
That is irrelevant.
It shows again that the Government is ill-prepared, ill-advised and the Minister is no closer to the truth than was the case 18 months ago in respect of the valuations for the water services infrastructure the 34 local authorities.
It is a pass through cost.
The sum of €59 million is so wide of the mark it is hard to believe but, as usual, as is the practice of the Government and all within it, they will close down debate and guillotine content that should be discussed on the open floor because they do not want the public to know the hames they are continuing to make of this. They have absolutely no idea of where they are going or what they are doing.
Fianna Fáil wants to leave everything as it is - a broken system.
There is no doubt that the Government's model, concept and construct will not only fail but will fail in Europe, and we look forward to walking the roads and having an election on the basis of the hames the Government has made of this.
The time permitted for this debate has now expired. I am required to put the following question in accordance with the order of the Dáil of 16 December 2014: "That the amendments set down by the Minister for the Environment, Community and Local Government to section 12 and not disposed of are hereby made to the Bill and that section 12, as amended, is hereby agreed to."
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