In 2004, the latest year for which complete information is available, the estimated expenditure by local authorities in respect of the operation and maintenance of public water supplies was some €214 million. Such expenditure is funded from a combination of non-domestic user charges, general purpose grants and specific grants.
In line with the polluter pays principle and the water services pricing framework adopted by the Government, the operation and maintenance costs of water supplies in respect of the non-domestic sector are recoupable from that sector. General purpose grants from the local government fund are discretionary block grants paid to local authorities as a contribution to their current costs, including domestic water services. In calculating these grants a wide range of relevant factors are taken into consideration, including population and the cost of operating and maintaining the domestic element of water supplies. In 2006, I allocated some €875 million to local authorities in general purpose grants. This represents an average increase of about 7%, more than double the rate of inflation, over the corresponding figure for 2005.
In addition, I have also been able to provide special assistance from the local government fund in recent years to help local authorities to meet the operating costs arising on newly commissioned water and wastewater treatment plants pending the reflection of these costs in the needs and resources model which is used in the allocation of general purpose grants. Some €7.5 million has been allocated to local authorities for this purpose in 2006. My Department is also providing substantial funding to local authorities to reduce unaccounted for water in public water supply systems and to improve the efficiency of such systems, thereby reducing the level of operational and maintenance costs falling to be met by the local authorities.