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Opinion: Is it too late to fix Irish Water?

Government can’t wash its hands of this – the current anger and frustration could be just the tip of the iceberg.

Kevin Byrne

THE INCOMPETENCE AND unfairness of Irish Water and its charges has enraged voters, and per use bills will raise temperatures further if they arrive next year, but there were better solutions if the Government was interested.

The water protests are the biggest we’ve seen since the crash and the issue dominated both recent by-elections. However the current anger and frustration could be just the tip of the iceberg. When the first bills hit in January, anger will increase further. And if metered ‘per use’ bills arrive in letterboxes next year there will be a tsunami of frustration at the inconsistencies in pricing between neighbours and regions. The Government has scheduled this land-mine to explode in the run into the general election – a reality that is only now gradually dawning on them.

Such is Irish Water’s incompetence that every second person has a legitimate problem or query to which they appear to have no answer. It has been a public relations disaster from day one with problems over data protection (unnecessary acquisition of PPS numbers, tenant bank details going to landlords), expensive call-out fees to fix leaks (€188 for basic call-out, much dearer out of hours) and inaccessible call centres. And no one believes their bill will be less than the ‘average’ €240 (for example a couple with two adult children will pay nearly €500 even if they stay within their allowance).

More problems to come

Although Irish Water already has a long list of scandals and PR disasters to its name, things are only getting started. The issues around leaks have barely begun. There will be leaks that can’t be found, or can’t be fixed, or require digging up floors to get to. Some people will find ‘their’ leaks are under other people’s property (maybe under their shed or wall). There will be huge leaks that Irish Water will refuse to fix on principle even though it’d be in its own economic interest to do so.

And once per use bills arrive, the discrepancies between more expensive metered bills and cheaper unmetered ones (maybe for houses on the same road) are going to infuriate people. A metered urban family could end up paying much more than an identical but unmetered rural family. Metering will also reveal quirks like infill houses getting their water via adjacent houses rather than the mains – will their neighbour get billed for the usage of both? The crisis around this utility could grow further.

Government can’t wash its hands of this

Despite attempts to shift blame for the mess onto Irish Water, the Government has huge culpability in creating a fundamentally flawed organisation with rushed legislation. It designed a HSE-like system that no one thought would work and which, unsurprisingly, hasn’t. Past experience in health meant we knew a structure like this wouldn’t improve outcomes or the user experience.

Incompetence also showed when it announced limited tax relief on water charges. Those who most need the support won’t get it (eg, the recently unemployed or the very lowly-paid), while others might get double relief (eg, a wealthy pensioner who pays tax will get the non-means tested household benefits €100 water support as well as the tax relief).

So, should we charge for water?

Many voters accept the logic of water charges (more than the protests might suggest), they are the norm in most countries and we had them in the past. Although it rankles with voters that there is no reduction in the general taxation they are currently paying for water, the basic principle is not universally opposed.

The size of the charges and the meanness of the set allocation are a major and honest concern in a time when even taxpayers on good salaries struggle to balance the books – something the Government repeatedly gives the impression it doesn’t believe. But the EU insisted on water charges as a condition of its loans to us and, despite our distaste for them, they are going to have to come in in some shape or form. The best we can do is bring them in in a fair way.

Flat fee for all

The solution is a single flat water charge for the next ten years, charged per person, at half rate for dependents, with exemptions or reduced rates for those that genuinely can’t pay.

The income from this levy would be used in the first instance to fix the leaks that blight our water system, and only once that is addressed to continue the roll out of meters. We’ll save a lot more by plugging leaks than installing meters.

As the scandals and mistakes mount daily there are indications that the Government might make this change. This simplified model would give certainty and reassurance to people genuinely fearful of water bills and it would reduce staffing needs – with less need for consultants and bonuses, too.

What about conservation?

If this was about conservation there would be new schemes and grants for rainwater capture and fanfare around them. With 50% of units unmetered and 50% of water leaking into the ground we are not ready for a per use charging model. Meters do have a role in that they let us quantify use – but quantifying real usage and charging for it in a petty manner are two different things.

Given that some houses are using as much water as entire towns because of leaks, the small proportion of households overusing water pales in comparison. Any newly built property should have a meter installed and in a decade’s time the aim would be to have almost all units metered. However focusing on addressing leaks is a much more profitable place to start, in every sense of the word.

A ‘fair usage’ allowance

The currently proposed usage allowances are so low that most people will breach them and be charged even more. The water allowance issued to everyone should be genuinely sufficient for their personal needs and should follow a ‘fair use’ type model as with mobile phone price plans – unlimited but within reason.

Metered properties that go over this fair limit would be charged for it, but this would encompass only about 5% of properties, not 50% as currently envisaged. Families should be able to comfortably stay within the allowance while still being able to have a daily shower. Extra charges for only those that abuse this resource should be the rule, not extra charges for everyone.

Luas style tender for a service provider

Structurally, rather than the HSE-like monstrosity the Government created, we should look at the successful Luas style public service model. All the assets and infrastructure stay in State hands – in a much trimmed down holding company like ESB Networks or the Railway Procurement Agency (which owns the Luas tracks and awards its operating tender).

We would tender for a group to run the service for a set cost, for a set time (say 20 years), under a license (setting out charges for its duration), with penalty clauses and a return for the State. Upkeep and repairs of the pipes would be the operator’s responsibility and income from the tender would contribute towards treatment plants etc along with a state subvention (as is planned under the current model too).

It should be a legal requirement that any tendering group have a successful track-record running infrastructure of this nature. As with the French Luas operator, we would expect interest from groups in EU neighbour states who know how to run this type of infrastructure well – as it appears no one in the Irish public or private sector can.

The dangers of privatisation

The alternative that the public are rightly concerned about is privatisation, where billions of State assets and investment are transferred to powerful private investors for next to nothing, at which point they could soak the public for cash indefinitely. This would be a never-ending nightmare, with no alternative and no way to avoid. Also, and perhaps not incidentally, the tax relief on water charges introduced in the budget would be an indirect state subsidy for the owner of Irish Water after privatisation.

Abuse and exploitation are a certainty with monopolistic businesses yet half-hearted Government reassurances have been far from convincing. Given the legitimate public concerns why not pass a bill that would require an 80% Dáil vote before Irish Water could be sold? If the Government doesn’t intend to privatise, why not rule it out?

Too late to fix?

As discussed above there were fairer, better ways to introduce water charges that would have been widely accepted; instead the voters had their intelligence insulted one time too many. These better solutions still exist, but the fiasco has brought voters to the streets with a determination it’s not clear the Government fully appreciates.

There will be attempts to stem the chaos in the coming weeks, but can the public ever trust Irish Water to provide this service after the debacle of its roll-out? Can they trust the Government not to sell off this utility and instead prioritise their interests? Unless we see some humility and real understanding of the depth of anger this insult has caused, it may be too late to fix.

Dr Kevin Byrne writes about Irish policy and politics at NowOrSoon.com. You can follow him at fb.com/noworsoon or @noworsoon

 

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Kevin Byrne

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