45% drop in numbers paying water bills

Irish Water managed to collect just a quarter of the money it billed customers in the first three months of the year.

It comes as the utility faces criticism that it is now going to have to compete for funding in the budget as it is no longer able to fund itself due to the sharp fall in the number of people paying their bills.

According to latest figures released by the utility, customers paid €18.3m during the fifth billing cycle. This is down from €33.4m for the previous quarter — a drop of 45%.

“The planned nine-month suspension of domestic water charges was announced by the Government as the fifth bill was issuing to customers.

The Government has confirmed that any shortfall in funding from domestic charges during their suspension will be provided to Irish Water by the Exchequer.

However, senior lecturer in economics at University College Cork Seamus Coffey pointed out that the utility collected just a quarter of what it billed in the first quarter of 2016.

“It’s a 50% drop in what was collected in the previous quarter. But if you look at what should have been collected per Irish Water figures, they are looking at collecting €260m a year. Give or take, that’s €65m a quarter.

They collected €18m so it looks like they’ve collected around 25% of the amount of money that they billed in the first quarter of the year,” he told RTÉ.

Mr Coffey said the original purpose of Irish Water was that decision making around how water is delivered in Ireland be taken out of the hands of politicians and placed in the hands of engineers, but that this aim had essentially failed as the utility will now have to compete for funding in the Budget.

“I think the issue is, going forward, when Irish Water is looking to fund its plans, projects and particularly its capital spending going forward, what’s going to happen?

“Irish Water will now essentially be part of the budget estimates process so it will be up there with the Department of Health, the Department of Education, policing, expenditure on roads.”

“Irish Water will be competing for funding with all of those agencies and all the other needs that the Government has.

“There won’t be an independent or separate source of revenue available to fund the massive investment we need in our water network which was the original motivation for Irish Water in the first place,” he said.

Mr Coffey said there were “economic merits” to introducing water charges but that it had now become a “huge political issue” which had grown larger than any economic arguments that are being put forward.

“In the overall scheme of things, the water charges are relatively small. If you just take it from an economic perspective, they’re just a couple of hundred million for a Government that is spending €50bn or €60bn a year.

“Clearly, the issue is far greater than the amount of money and I think any expert commission that comes to its views, if it does so based purely on the basis of economics isn’t going to get very far. In Ireland this is a much greater political issue,” he said.

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