Dáil Éireann Debate, Tuesday - 4 February 2014
86. Deputy Joe Higgins asked the Minister for the Environment, Community and Local Government his views on the research paper written by Professor John Fitzgerald and Dr. Edgar Morgenroth for his Department in relation to the establishment of Irish Water; and if he will make a statement on the matter. [5339/14]
Amharc ar fhreagraI am seeking the Minister's views on the research paper written some time ago by two professors of the ESRI. Will he comment on the proposals in the paper and its estimates on water charges and savings in water supply?
Following the decision by the Government in December 2011 to establish Irish Water, on the basis of an independent assessment conducted by PricewaterhouseCoopers, my Department launched a public consultation process to inform development of the implementation strategy on the reform programme. Almost 300 submissions were received, including a submission from the ESRI. All of these were taken into consideration in developing the implementation strategy published in December 2012.
The submission received from the ESRI concluded that the establishment of the new utility is an opportunity to achieve significant efficiency gains, which will result in lower costs to the taxpayer. The submission noted that the independent assessment indicated that staff numbers would decline over time, and commented that the transfer of staff from local authorities and the terms and employment of staff and services should be at the discretion of the new company.
The model adopted allows Irish Water to build up its own internal capability as it considers appropriate, with competitive processes that draw on expertise within the sector for some roles. Irish Water has entered into service level agreements, SLAs, with each of the 34 authorities for the provision of specified services. Staff in local authorities conducting work under these arrangements will remain local authority employees. The SLA reflects the transformation agenda required for the sector, with provision for annual service plans which will set out required performance, budgets and headcount. The actual headcount which will be required over the period of the agreement is intrinsically linked to the levels of investment within the sector in automation, rationalisation and infrastructure and operational upgrades. The establishment of Irish Water will lead to improved efficiency and effectiveness of water services delivery, and progress in this regard, leading to staff reductions, will be closely monitored in the context of annual service plans. It makes far better sense to accelerate and improve investment in, and management of, water services assets through a single efficient model rather than attempting to replicate systems through over 30 separate local authorities.
We are reforming our water services to address significant deficits and weaknesses in the current system. In particular, 18,000 people on public water supplies have a boil-water restriction or other restriction in place; remedial action is required on 16% of supplies at risk, covering almost 1 million people, including large schemes such as those in parts of Dublin and Cork; there are significant supply constraints in Dublin; unaccounted-for water is unacceptably high, at 40%; the European Commission has launched a pilot infringement in regard to 80 treatment plants.
Additional information not given on the floor of the House
A total of over €1 billion in capital and operational expenditure is required per annum for the provision of water services. This level of investment simply cannot be met through the existing model, without significant cuts to other public services - for example, education and health - or significant tax increases. The Irish Water Utility Model will facilitate new investment, and charges determined through the user-pays model, based on metered usage above a free allowance, will reflect the greater efficiencies and reduced operational costs that a single utility can be expected to deliver.
The Minister claims repeatedly that the setting up of Irish Water, Uisce Éireann, will save €2 billion up to 2021. He gives the impression that some kind of magic efficiency is involved. This is the most cynical mendacity. Will he confirm today what Irish Water has confirmed, namely, that the figure of €2 billion will in fact be accounted for by water taxes on households? He has not been honest enough to spell that out.
The ESRI paper estimates that water tax from households could amount to €630 million per annum, or €426 per household, on average.
I ask the Minister what estimate his Department is putting on the water charges when they are introduced. Does the Minister agree that this is a tax for a service that is being paid for by householders at the moment and for which they have paid for many years through income tax, VAT and so forth, and that imposing a new tax is a blatant double taxation and is unjust?
I am not surprised that Deputy Higgins disagrees with the manner in which we are setting up a semi-state company to deliver, efficiently and effectively, a service that is not being delivered effectively and efficiently through 34 local authorities. We are spending €1.2 billion of taxpayer's money - or working people's money, as Deputy Higgins would have it - to deliver this essential facility through 34 local authorities, but 40% of it is going into the ground in the form of unaccounted-for water. In recent years we have invested in replacing some of the pipe network but we are not able to keep up because of the constraints on the public finances due to the reckless policies pursued in the past. There is also a troika agreement to be met. If we want additional moneys for capital investment in our water infrastructure, we must cut back elsewhere. Can Deputy Higgins make any suggestions as to where we can cut back? Can we cut back in housing, health or education in order to deliver this essential service? We have significant constraints on water supplies in Dublin, including in Deputy Higgins's constituency, and the greater Dublin area. We have significant challenges in terms of capital investment. Can the Deputy tell me where we can get the money?
It is a damning indictment of the Fine Gael party, which was in government in the 1990s and again in the last three years, and its predecessors in Fianna Fáil, that 40% of expensively treated water is leaking into the ground. That is because successive governments have failed to invest in our water services or to give adequate funding to the local authorities to fix our water network and make it efficient. How could the local authorities remediate this disgusting and disgraceful waste when they were not given the funding to do so? Furthermore, Fine Gael and Fianna Fáil, when in government, absolutely failed to amend the building regulations to ensure that water-saving devices that would have saved billions of litres of treated water every year were installed in people's homes. Now the Minister has the neck to come in here and say we have to have this water tax for this, that and the other reason. I will tell the Minister how to make savings - stop paying the bondholders billions of euro. The Irish people never incurred that debt; it is not their debt to pay. The Government should stop paying the €9 billion in interest alone and put those funds into our water infrastructure, health and education and transform our society.
What is the Minister's estimate of the water charge per household?
Water charges will be decided by the Government and Irish Water when it makes its submission to the Commission on Energy Regulation. The regulator will ultimately decide on what the level of water charges will be. The Deputy must have patience and he will get-----
The Government is going to start charging for water from October but will not tell people what the water charges will be until after the local elections.
The Minister to reply without interruption.
There was a commitment in the memorandum of understanding that we would introduce a property tax and water charges in 2013. We have the property tax but will not have water charges until 2015. The Deputy needs to get his history correct.
I wish to thank the staff of local authorities who are in difficulty at the moment trying to manage supplies along the coastline of our country. Equally, in the Dublin area, they are managing the water supply on a daily and hourly basis to ensure that the Deputy's constituents have an adequate supply. I thank them for that. We will continue to employ those staff because of their knowledge and corporate memory. They have the necessary expertise built up to ensure that this situation continues. We are going to use Irish Water, a commercial semi-state company in public ownership, to get additional moneys to invest in our water services for the future. The Deputy did not give me an answer as to where we will get the money in a realistic sense. He just went on with the old story about the bondholders.
Billions has been paid that the people never owed. Is it any wonder that the Minister is short?
