We’re stuck with Irish Water so here is how to fix it

If we’re going to rescue the fiasco that is Irish Water, we need to understand what it is, what it isn’t, and how to make it work for us rather than against us. By now, most people are either angry with or scared by Irish Water – or both. Many on low incomes know they won’t have the money to pay and are asking what a “trickle” of water will mean for them.

Parents are furious at demands for their children’s PPS numbers. Others are scathing over being forced to pay for water through charges when they already pay for it through taxes. Last week was the final straw for many more, with Irish Water announcing an attractive bonus regime for its management and quite outrageous call-out charges to fix leaks.

If we’re to untangle this mess, we need to understand what the point of Irish Water is. To do that, we need to start with what it’s not. First, it’s not about conserving water. The money spent on installing meters and administering payments could have been used to retrofit conservation measures in people’s homes.

Second, it’s not about saving money. The Government locked in the existing high cost base via 12-year Service Level Agreements and stated that there’d be no savings for at least the first five years. And third, it’s not about paying for today’s water. The operating costs for providing water are only slightly higher than State funding to Irish Water, so the costs of getting water in and out of our houses is still paid for, more or less, via central taxation.

What then is the point of Irish Water? It is this: Our water system is about to fall over and needs about €15bn to upgrade it – from reservoirs to pipes to treatment plants. We don’t have €15bn, and we can’t borrow €15bn, so what do we do? We set up a ‘private’ company and give it a guaranteed future cash flow, which in this case is water charges. That company then goes out to the international money markets and borrows the €15bn, using the future cash flows from water charges as security. With that money it can upgrade and modernise the system. The money we’ll pay in water charges next year won’t really be for the water coming out of our taps – it’ll be to ensure there’s still water coming out of our taps in 10 years’ time.

The problem is that Government incompetence and arrogance turned a clever idea into an unmitigated disaster. The tone was set right at the start – when the legislation was introduced last year, the Cabinet allowed just three hours of parliamentary debate. It’s the only time in this Dail the entire opposition walked out in protest. This contempt for parliament translated into a contempt for citizens once Irish Water is rolled out. The result is fear and fury – with Fine Gael, with Labour, and with Irish Water.

Simply shutting down Irish Water is not an option. So, what’s to be done? State funding to Irish Water should match historic operating costs for running the water system (about €700m in 2010). This would avoid double taxation and ensure water charges are being used only to fund the upgrading of the infrastructure. In spite of the Government bottling it on reducing the cost base, the Regulator has insisted that operating costs are reduced in the coming years. State funding could be reduced in line with this.

An affordability clause must be introduced. No Government that would deny people water because they haven’t the money to pay for it is worthy of office. Similarly, the call-out charges need to be significantly reduced, or possibly eliminated altogether, for minor leaks – neither Eircom nor the ESB, for example, charge us for fixing faulty wires connected to our homes.

The allowance for children must be monitored and adjusted as necessary. Just a few months ago, the Government suggested that a child would use up to 38,000 litres of water a year. Irish Water is saying it’s 21,000 litres, based on survey data. They may be right, but that’s one hell of a difference. And if it turns out to be low, it must be increased, with a rebate paid to recognise the error.

Poor service for water leaving the home must be recognised. It has been agreed that for homes on boil-water notices, the charge will be halved. Similarly, there are several villages and towns, such as Arklow in Co Wicklow, where raw sewage is being dumped straight into the rivers. Homes in these areas should receive the same reduction in charges as those on boil-water notices.

The potential future privatisation of Irish Water must be guarded against. The Government position is that the legislation doesn’t allow for privatisation. But as they know, legislation is very easy to change. What errant governments can’t change is the Constitution, and so a referendum on a Constitutional amendment should be tabled, ensuring public ownership of our water system.

The decision on bonuses should be reversed. Firstly, because the proposed structure is ridiculous – that employees would have wages deducted for poor performance. What motivation might have been engendered though bonuses would most likely lead to demotivation in this punitive, rather than rewarding, approach. And secondly, because awarding bonuses is simply not appropriate in the current climate or context of setting up Irish Water.

The demand for PPS numbers must be dropped. There’s no allowance based on the number of adults in a house, so if you’re not claiming an allowance for children, then Irish Water has no use for your PPS number and should not be asking for it.

And if you are claiming for children and need to provide their PPS numbers for the purposes of verification, then those numbers should be immediately deleted once verified.

Any notion that Irish Water can securely hold these evaporated last week when it sent confidential bank details for some customers to their landlords.

The charges should be paused until 2016, or at least introduced at a heavily reduced rate. For many families, the water charge is simply a bill too far.

Most people could accept an affordable charge aimed solely at upgrading the water infrastructure, but right now, it’s coming on the back of the LPT and wipes out any benefit from lower taxation for the majority of workers.

Independent TD Thomas Pringle pointed out that a full tax rebate would bring the effective charge to zero while still giving Irish Water the cash flow needed to start borrowing for investment.

All of this can be achieved with sufficient political leadership. The new Environment Minister, Alan Kelly, didn’t create this mess.

So he’s in a good position to put his hands up on behalf of the Government, admit the whole thing’s been implemented in an incompetent and ignorant manner, and work with Irish Water to change the current approach.


This article originally appeared in the Sunday Independent on 26 October 2014

  • Michael

    Thank you for the clear analysis that cuts through the hype all around and makes clear the reality of our situation and what is required (and not). This government is pushing itself into a crisis by failing to listen to the people and talk to them as adults. Keep up the good work; Ireland needs more people like you.