Priority Questions
80. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government if he will provide by county a breakdown of the expected commercial rates bill on Irish Water assets that his Department is now liable for; if he discussed the issue with the County and City Management Association prior to the announcement; and if he will make a statement on the matter. [45937/14]
View answerI wish to pass on my condolences to the family of Mr. Corrie, the gentleman who, unfortunately, was found deceased on our streets yesterday. I join the Archbishop and others in their request for a forum to be put together. By way of response, I commend the Minister on coming forward with a suggestion for Thursday. We might talk outside the Chamber to establish who exactly may be willing to attend such an event, which is essential.
That is no problem.
The question relates to the issue of the €60 million that was not due to be paid by Irish Water to local authorities according to the Minister the week before last. How did the Department arrive at that figure? My information indicates that the only two counties that have had up-to-date valuations carried out at this time are Dublin and Waterford. While many other counties had not provided for income to be derived from this area in their forthcoming budgets, there was an understanding that income would accrue to them in future once valuations were complete.
It was alleged that €11 billion worth of assets in the form of networks, plant, machinery and so forth associated with Irish Water was transferred from local authorities, as against €60 million as an indicative figure. Is €60 million simply an indicative figure or as per my question? Can an indication be given as to the loss that may accrue to each local authority throughout the State? Can this be ascertained? Can alternatives be put in place to guarantee that the Local Government Fund will substitute those funds?
I assure Deputy Cowen that the local authorities will not be at a loss. There are three key elements to the Government's recent decision on water charges - we sought to make them more affordable, as everyone knows; we sought to provide certainty in respect of the charges; and we sought to put in place a more complete charging structure.
In making the charges more affordable, the Government carefully examined Irish Water's operational expenditure. Irish Water's allowed revenue, which was approved by the Commission for Energy Regulation, continues to apply save for the impact of a changed approach to commercial rates for water services infrastructure. Such rates were considered by the regulator to be an uncontrollable or pass-through cost for Irish Water. In other words, they go straight through. By introducing an exemption from rates for any land or infrastructure used for the provision of public water services, the pass-through cost will no longer form part of Irish Water's operational expenditure. Local authorities will not suffer any loss of revenue as my Department will pay equivalent amounts to each authority from the local government fund to replace the anticipated income from rates. The total budgeted amount for rates payments by Irish Water in 2015 is €59 million.
I will shortly bring forward legislation to give effect to the Government decision to provide an exemption from rates for water services infrastructure. While there was no prior engagement with the County and City Management Association or the Local Government Management Agency on this issue, my Department will be engaging with local authorities in relation to the process for payment of the compensating amounts in respect of the rates revenue foregone in 2015. That process is already under way.
While I welcome the Minister's response, I am at a loss at his statement that no local authority will be at a loss when no local authority outside Dublin and Waterford had established what revenue would accrue from the commercial rates to be paid by Irish Water. The Minister said there was no consultation or discussion with the management association on the proposal and the decision. I need further proof from the Department as to how the figure of €59 million was arrived at and how it breaks down across the country. I need to know into the future that local authorities can definitively be satisfied that there will be no loss to them in funding vis-à-vis the local government funding model over the coming years. No valuations were carried out and there was no indication of what the valuation was. There was no idea as to what the income stream would be. Therefore, how can the Minister quantify the sum and will he break down the €59 million across the 34 local authorities?
The Deputy can be fully assured definitively that local authorities will not be at a loss as part of this process. While there were no discussions within the timeframe with the LGMA or CCMA, discussions are ongoing on a continuous basis on all these issues anyway. There will be no effect on local authorities. The €59 million figure is believed to be the cost and it was arrived at through the analysis done with the Department and its discussions, which are ongoing as is always the case. I assure the Deputy that no local authority will be at a loss through this process. This is a pass-through cost and whatever pass-through amount per local authority is necessary will be the one that is given through. It will be supplemented and this mechanism is one we chose to put forward as part of the changes we brought through on water in the last couple of weeks. There is no intention in any way, shape or form to bring about any negative effect for local authorities. In relation to the breakdown of the €59 million, I will by all means share the figures with the Deputy when I have them to hand.
I am very anxious that those figures are made available to the House as I have asked in written form and now orally but have yet to be provided with them by the Department.
The Deputy will get them.
I find it very difficult to understand how a figure could be arrived at - specifically €59 million - by the Department when no valuations were carried out by 32 of the 34 local authorities. While it may be believed that the values applicable were such that the rates would only generate €59 million, we must see it on paper and contrast it across the different regions.
We are very confident about the analysis that was made and the €59 million figure. When there is a breakdown in 2015, we will be able to supply the figures, as will be required. The Deputy has raised this issue previously and I am aware of his concern in this regard, but I assure him that this process will not leave local authorities at a loss. That was never the intention and, as the Minister with responsibility for local government, it would not be in my interest for any such loss to arise. While the Deputy's concerns are noted, I assure him local authorities will not be at a loss.
81. Deputy Brian Stanley asked the Minister for the Environment, Community and Local Government if Ireland has a derogation from water charges under Article 9(4) of the EU water framework directive; and if the European Union has made representations to change it. [45939/14]
View answerDeputy Barry Cowen referred to the unfortunate death of John Corrie on the streets of Dublin two days ago. I join him in extending my sympathy to Mr. Corrie's family and friends.
A new house building programme has been announced. While everyone welcomes the provision of new housing, the problem is in the here and now. Temperatures fell below 0° Celsius during the night and will remain very low for the rest of the week. I see empty buildings all over the place. With good will, some of them could be used to house the homeless. In this regard, I welcome the initiative taken today by the Archbishop of Dublin. I ask the Minister to do everything in his power to address the problem.
The Deputy must address the question.
I ask the Minister to clarify the position on the Irish derogation from the water framework directive of 2000 which has been discussed again recently.
I should have indicated previously that subsequent questions dealt with social housing and homelessness. I concur with the comments made by Deputies Barry Cowen and Brian Stanley on this issue. They are probably aware of the announcement I made earlier today. We will address the issue in subsequent questions.
Article 9 of the water framework directive of 2000 requires member states to take account of the principle of recovery of the costs of water services in accordance with the well known principle that the polluter pays. Article 9(4) of the directive states member states are not in breach of the directive if they decide, in accordance with established practices, not to apply the provisions of the recovery of costs for a given water use activity where this does not compromise the purposes and achievement of the objectives of the directive. However, Ireland does not have any specific derogation from the directive. I emphasise this point as I have read analysis and commentary to the contrary.
The Government's policy on water charges is fully consistent with the objectives of the water framework directive and reflects the commitment entered into as part of the Programme of Financial Support for Ireland, 2010 to 2013, agreed between the previous Fianna Fáil-led Government and the European Union, the European Central Bank and the International Monetary Fund. The programme for Government commits to introducing a fair funding model to deliver clean and reliable water and establishing a new State owned utility to take responsibility for water infrastructure. The new, more sustainable funding model being put in place through the establishment of Irish Water will allow for the investment required to ensure our water infrastructure can meet demographic and economic needs and comply with the requirements of the water framework directive in respect of the water environment.
In line with Government policy and the provisions of the Water Services (No. 2) Act 2013, Irish Water can collect charges from its customers in receipt of water services provided by it. The package of measures I announced in the House on 19 November provides clarity and certainty and will ensure water charges are affordable for customers. Legislation will be introduced in the House later this week to underpin this package of measures.
The issue of a derogation from the water framework directive is being discussed and Article 9(4) is receiving specific attention. It is interesting to note the Minister's comment that Ireland does not have a derogation from the directive. Did we have a derogation at any stage? If so, was the Government notified that it was being removed and the grounds on which it was being removed?
Was its removal part of an arrangement with the troika and the previous Government when it signed the memorandum of understanding?
Article 9(4) offers a way of dealing with things differently, stating:
Member States shall not be in breach of this Directive if they decide in accordance with established practices not to apply the provisions of paragraph 1, second sentence, and for that purpose the relevant provisions of paragraph 2, for a given water-use activity, where this does not compromise the purposes and the achievement of the objectives of this Directive.
The Minister has a number of options, such as conservation.
This has been bandied about, and there have been different interpretations in previous years. We do not have a derogation. As a consequence of the circumstances of the country, our current situation and that of the past number of years, and the manner in which the agreement with the troika was signed up to by the previous Administration, not only do we not have a derogation, but, as a result of our circumstances, we do not have a derogation because we have committed, as the Deputy is fully aware, to the introduction of the model we have developed.
It is important that we discuss the water framework directive and the necessity for us to be compliant with it. Without investment of the level required, we simply will not be in compliance with it in any way, shape or form. We all know the reasons for that and the situations with which we have to deal across the country. It is for this reason that we have adopted this policy. It has happened out of necessity because, as a country, we had no choice.
The Minister clearly has options, according to Article 9(4). He could have chosen a policy of conservation and shown he is achieving the objectives of the directive. That could be done through building regulations, water harvesting, particularly in larger buildings, or the roll-out of a large-scale water education and awareness programme.
The Minister will recall that about 15 years ago it was in vogue in this country to say that Irish people would not recycle. We now have one of the best recycling rates in the EU, which is good, and we should have more of it. We cannot do too much. Irish people will conserve water. It is an option.
The €800 million or so that has been spent has not been spent on fixing leaks; rather, it has been spent on establishing Irish Water and the cost of metering, which was €539 million. That money would have repaired an awful lot of mains. We could save water and achieve the purpose of the directive.
I have heard these arguments. We do not have options of the scale to which he referred. However, that is not to say we should not be implementing some of the measures he mentioned to a larger degree. I agree with him completely about conservation. It is a necessity that we, as a society, adopt a similar approach in our conservation policy to that which pertains to recycling. The Government will take further measures on this in the coming months and years.
The real issue is that the level of investment required across the State to meet the requirements is colossal. Billions of euro will be required over the next number of years to begin dealing with the problems we have with water infrastructure in the country. It would be impossible to be in compliance with the directive if we did not adopt our current approach.. Look what is happening in Arklow, where a case is being taken due to the fact that there is raw sewage running into the Avoca river.
82. Deputy John Halligan asked the Minister for the Environment, Community and Local Government the amount of revenue that Waterford City and County Council is to recoup next year from Irish Water; the amount of this that is made up of payroll costs to do with water supply and waste water treatment by the council as agents for Irish Water; if he will provide a percentage breakdown of the amount of the overall earnings of the council this figure represents; the amount that Waterford City and County Council invoice Irish Water for in operational costs every month; if Irish Water has indicated it will seek a reduction in what it will pay the council going forward; the support services Waterford City and County Council are providing to Irish Water; and if he will make a statement on the matter. [45995/14]
View answerOn behalf of the Technical Group I offer my sincere condolences to the family of the young man who died in what can only be described as unacceptable circumstances, namely, without a bed or a roof over his head. It is unacceptable that such a thing could happen in Ireland today, which has a relatively small population of 4.5 million people. I thank the Minister for the initiative he is due to announce on Thursday. I am sure he will do everything in his power to deal with this inherently poor and desperate situation.
How much revenue is Waterford City and County Council set to recoup next year from Irish Water and how much of this will be made up by overall pay costs to do with water supply and wastewater treatment by the council as an agent of Irish Water? Will the Minister provide a percentage for how much of the overall earnings of the council this figure represents? For how much does the council invoice Irish Water in operational costs every month and has Irish Water indicated that it will seek a reduction in what it will pay the council in the future?
I do not know if the Deputy was present when I commented on the issue of homelessness, but it will be addressed in later questions.
In December 2013 all of the local authorities signed individual service level agreements with Irish Water. Under these agreements, local authorities are conducting certain water services such as operations and maintenance of plants on behalf of Irish Water. I have no role in agreeing individual service level agreements which are operational matters for individual local authorities and Irish Water. However, I understand from Irish Water that Waterford City and County Council has been paid some €12.2 million to the end of October 2014 under the agreed service level agreement.
As well as in-built reviews of a service level agreement after two and seven years, there are annual service plans with agreed objectives and standards of performance, set against a budget covering headcount, goods and services and investment in the forthcoming year. Agreement on the annual service plan is a collaborative process between Irish Water and each of the local authorities and their representative bodies. The 2015 process is well under way and it is expected that annual service plans for 2015 will be agreed shortly. Until these plans are finalised, it is not be possible to give a breakdown per local authority for 2015.
A key objective of both the service level agreements and the annual service plans is to maintain service levels for all users of public water and waste water services. Meeting the new uniform regulatory requirements and standards and the regulator’s customer requirements is at the heart of the 2015 annual service plans.
My understanding is that local authorities will continue to provide water services as agents of Irish Water. The cost of providing these services vis-à-vis payroll costs and a portion of the councils' central management charges will be recouped directly by Irish Water. However, it is likely that Irish Water will seek a reduction in what it will pay councils. There are considerable financial and operational uncertainties around this issue. For instance, will local authorities face significant operational and financial risks if the service level agreements, as agreed, are not honoured in full by Irish Water? For example, operating costs in the utility company, to date, have been twice those of its UK counterparts. When set up Irish Water signed a 12 year service level agreement with more than 4,000 local authority workers and there are major concerns about pension liabilities. Will the Minister clarify whether if the pension liabilities of Waterford City and County Council staff and others who moved to Irish Water were transferred to the new employer?
On the last issue, I presume everything has been done appropriately. If the Deputy has a specific question on the issue, I will get back to him directly if he sends his query to me. The requirements in this regard are set out, but I do not have a direct role in the matter. However, I am intent on ensuring the review process for the service level agreements will be conducted in a comprehensive manner. A review process will take place after two years and seven years. A framework has been agreed and is in place. Each year an agreement must be put in place and issues identified will be dealt with in a suitable manner. Some issues will be unique to a particular local authority and Irish Water will engage on them. To date, I have no reason for concern in my dealings with Irish Water or the local authorities. I deal with both sides of the coin.
I have seen no concerns to date that would give rise to any form of alarm.
I wonder whether water charges will be used to pay off huge legacy debts incurred by councils over the years, for example, overruns on contract failures on various capital projects. My information is that many local authorities have already had to borrow money to settle contractual claims and legal disputes. For example, in Waterford city, substantial legal costs and settlements of €4 million were paid to a contractor following a dispute in 2010. We were recently told by Irish Water that it will take on between €100 million and €130 million in debt from uncollected commercial water charges. Can the Minister give any indication of the extent of liabilities which will be transferred to Irish Water for debts such as unpaid development levies or loans various councils drew down for expensive investment projects on budgets that went by the wayside?
The figures quoted by the Deputy are broadly accurate. Irish Water does have a role and is taking on what it needs to take on. However, it is a case-by-case scenario and it obviously has to be very prudent and has to do this in the right manner. If the Deputy has a specific concern in regard to water or a specific project in mind, while I do not have that level of detail available here, I would be quite happy to get the Deputy an answer, one on one.
I must repeat that a huge amount of rigour has been gone through in how Irish Water is dealing with those cases and the legacy issues to ensure there is value for the taxpayer and that this is appropriately managed. I can give many examples where success stories have emanated because of Irish Water. The biggest one, which, to be fair, everyone has acknowledged, is at the Ringsend plant close to here, where a huge amount of capital investment has been saved due to the establishment of Irish Water. There are examples all over the country. This is a very positive thing. The saving in regard to Ringsend alone is equal to the set-up cost of Irish Water.
83. Deputy Éamon Ó Cuív asked the Minister for the Environment, Community and Local Government his plans to continue to finance the non-Gaeltacht island community development companies, which between them were in receipt of nearly €500,000 per annum either directly or through the social inclusion and activation programme, SICAP, in view of the vital work they do on the islands; and if he will make a statement on the matter. [45941/14]
View answerAs the Minister is probably aware, the community development companies in the non-Gaeltacht islands play a vital role in sustaining the communities on the islands. There are five such companies, based on Clare Island, Inishturk, Inishbofin, Sherkin Island with associated other small islands in Cork, and Bere Island. Does the Minister intend to provide funding, which is in the region of €500,000 a year, to the development companies on the islands after March 2015? I know the Minister has cover until that date so I am interested in his plans after March 2015.
To be fair, the Deputy has raised this issue with me on previous occasions. My Department’s local and community development programme, LCDP, is the largest social inclusion intervention of its kind in the State. The current programme officially ended at the end of 2013, having operated for four years, with funding of €281 million over that period. As the Deputy noted, it is being implemented on a transitional basis for 2014, with a budget of €47 million pending the roll-out of the new social inclusion and community activation programme, SICAP, in April 2015. I believe it was the appropriate and necessary decision to make that intervention. My Department currently provides LCDP funding to Comhar na nOileán Teoranta - the local development company for the islands - for the delivery of LCDP to off-shore islands. In terms of the successor programme, SICAP, the intention is that island areas would be eligible for inclusion within the tendering process which is currently under way and is due to be completed in February 2015. The SICAP funding allocations are informed by a specific resource allocation model, otherwise known as RAM, which focuses on the relative disadvantage of individual areas.
Discussions have taken place and are ongoing between my Department and the Department of Arts, Heritage and Gaeltacht, which has lead responsibility for the islands, in response to issues raised regarding the continuation of funding for the development offices on a number of non-Gaeltacht Islands. This reflected the fact that the issues involved are broader than just those relating to SICAP, which I acknowledge.
I can assure the Deputy that both Departments fully understand the importance of the community development infrastructure on these islands. I and my colleague, the Minister, Deputy Humphreys, who I discussed this with as late as this morning, will be ensuring that both our Departments continue to collaborate to agree a workable solution into the future. In the meantime, LCDP funding for the groups concerned will continue until the end of March, as the Deputy is aware.
I thank the Minister for his reply which was full of generalities about which I did not particularly ask. When I received such an answer when I was a Minister, I tended to say, "That is not what the Deputy asked. Will you just give the answer to the question?" The answer to the question is that the Minister is able to assure me that funding for the development companies on the island will continue after March and will be approximately the same amount or perhaps a little more because inflation obviously takes its toll. That is the question to which they want an answer because the lives of those on the islands are at stake. Not only that, people have commitments and want to know what is going to happen. They are not particularly interested in the machinations between Departments because they say the Government acts as a collective and they are asking it to give them a collective answer. Will there be funding or not?
I intend to see through broad Government funding mechanisms and ensure there will be adequate funding available for the islands. I do not think it would be appropriate to get into a specific identifiable figure for the following reason. A tendering process is ongoing which, legally, needs to be seen through. Having said that, as part of the process, I have indicated to the Deputy that the two Departments which have some responsibility - my Department and the Department run by my colleague, Deputy Humphreys - are collaborating and discussions are ongoing to ensure services for the islands will be maintained because of the valuable work done.
I am a little confused. The Minister mentioned the Department of Arts, Heritage and the Gaeltacht as being the lead Department.
Yes.
I thought the Minister, Deputy Humphreys, was in the Department of Social Protection. I thought the Minister of State, Deputy Joe McHugh, was in the Department of Arts, Heritage and the Gaeltacht.
The Deputy has the wrong Humphreys. I meant to say the Minister for Arts, Heritage and the Gaeltacht, Deputy Heather Humphreys. Hers is the lead Department. It is a matter for the Minister of State at that Department, Deputy Joe McHugh.
There could be a role for the Department of Social Protection which gives the money. If one looks at the tendering process for SICAP, one will see that there is no provision under it to make this allocation to the development companies on the islands. Will the Minister confirm that this is a correct reading of the tendering process? Therefore, it will have to be a special allocation. Will the Minister confirm that regardless of whether it is the responsibility of the Minister for Arts, Heritage and the Gaeltacht, the Minister of State at that Department or the Department of the Environment, Community and Local Government, there will be a sum for the island development companies, give or take €500,000 or €600,000, to continue the vital work being done to ensure the sustainability of the islands, because without the development companies they are not sustainable?
I have been clear about this. A process is under way. As a former Minister, the Deputy has been in this role. I understand what he is saying about the group of islands, but some are involved in the tendering process. One must respect this. I have to respect it, regardless of whether the Deputy does. There is a time period for dealing with concerns expressed, a process in which the Minister of State at the Department of Arts, Heritage and the Gaeltacht is involved. When we see the results of that process, we will collectively ensure there will be an adequate amount of funding for the islands. I am very confident and intend to ensure that will be the case.
84. Deputy Brian Stanley asked the Minister for the Environment, Community and Local Government his views on the increase in the cost of the water metering programme from €431 million to €539 million; and if he will make a statement on the matter. [45940/14]
View answerMy question pertains to the cost of the water metering programme. A couple of weeks ago we learned that the estimated cost had jumped by €100 in the space of eight weeks in 2013. The final cost is €539 million. I recall figures of €320 million and €350 million being mentioned on the Government benches over the past two years. How did we arrive at a cost of €539 million?
The Water Services Act 2013 provided for the establishment of Irish Water as an independent subsidiary within the Bord Gáis Éireann Group, now Ervia, and assigned the necessary powers to allow Irish Water to undertake the water metering programme. Following a tender process, the final cost of the metering programme was determined at €539 million. The cost reflects the outcome of the procurement process, taking account of the overall logistics of a programme of this scale and complexity.
The initial estimates of the cost of the domestic metering programme were based largely on the experience of the non-domestic metering programme, the group water sector and market soundings, as there was no precedent for a programme of this scale over a very short duration. We were not necessarily comparing apples with apples and oranges with oranges. The estimate was based on much smaller-scale projects than the national domestic metering programme and was not a definitive budget. As with all capital projects, estimates are refined as the detailed technical scoping of the project evolves, including matters such as appropriate risk allocation and programme management, and ultimately it is the competitive process that determines the price, and rightly so. The final budget figure reflects the outcome of the detailed scoping of the project and the procurement process.
The estimated cost of installing meters has increased by 20%. That represents a huge proportion of the taxpayers' and public moneys that have been soaked up thus far by Irish Water for the metering programme. I must assume that the consultants who came up with this estimate were the same people who were paid €85 million last year. There is considerable anger about that. Surely it would have been far better had some of this money been used to address real problems of water conservation and reducing water usage. In May 2013, the consultants estimated the cost at €431 million, but by the time the contracts were awarded in June, the figure was €539 million. Meanwhile, a survey carried out by local authorities, which would have been more accurate, came up with a figure of €539 million. Does the Minister not find it unusual that the figure determined through the local authorities' survey happened to correspond with the estimated cost of the contracts for installing meters arrived at six months previously?
The question of whether it was unusual was never put to me. I have no reason to disbelieve people. We need to be clear that the procurement estimate of €431 million was based on the best information available at the time. The Deputy is aware that this estimate was based on data relating to non-domestic usage. It was also based on group water data. It is not entirely accurate to suggest there was a big jump from €431 million to €539 million in a short period. While that figure was cited a number of times in the months prior to completion of the tendering process, it was the last estimate available. That does not mean it was the last estimate available a few months previously. It was an estimate that had been in circulation for some time. The period of time for a jump of that nature is not exactly accurate. We must also remember that a tendering process was ongoing.
Obviously within that time period if there was new data or a re-analysis of the actual cost, it was not something that would be made public in the middle of a tendering process.
There are two very unusual facts here. First, we went from talking about €340 million a few years ago, and as recently as a year ago in this House, to talking about €539 million this year. It is also more than unusual that the final figure for the estimate by the local authority at €539 million just happens to be the same figure as that awarded for the contracts in the previous summer. That is highly unusual. If the Minister does not consider it unusual, the public and I do. The cost of the metering programme has soared from in excess of €300 million to €349 million. Will it even stop at that? Surely it is time for Irish Water to be scrapped. It is time for the Minister to cut his losses and abandon the metering programme. Indeed, in keeping with the Minister's own rules, is it not time to make that body accountable to the Committee of Public Accounts, the Comptroller and Auditor General and to this House, which it is not at present?
In regard to the Deputy's last comment, everybody is accountable across the suite of groups the Deputy mentioned, so it is a matter for the groups themselves. Irish Water is necessary, as I have made clear. Without it we simply will not have a water supply to the scale required in this city ten years hence, when people such as the Deputy and others will be roaring and shouting about why we do not have the water we need and why the Minister with responsibility for the environment, be it me, my predecessor or my successor, did not do something about it. Most reasonable people know we must deal with this issue from the investment point of view. If the investment is not made, there will be problems all over the country, including in the Deputy's county, my county and everywhere else.
We have loads of water.
I have been quite clear about the procurement process. The estimate was based on non-domestic information and on group scheme data. At the time it was an estimate. It was a long time before the tendering process, and once the tendering process was under way it would not have been appropriate for other data to be put in the public domain, considering a number of tenderers would have been completing the details of what they were pitching and so forth. It is clear that the figure which emerged from the tendering process is the figure that is required.
