Fears of service cuts to refund water fees

The Government are under fire for holding back money for cash-starved services and instead plunging the unspent budgets into refunding households for the botched water charges regime.

Finance Minister Paschal Donohoe confirmed that €178m will be spent on water refunds, potentially by the end of the year, a one-off spend which will come from savings across departments.

However, questions have arisen over whether services and supports in health, education and social protection among other areas will be neglected to pay back over a million households.

Fianna Fáil’s Barry Cowen has written to Housing Minister Eoghan Murphy with concerns and warned that the refunds plan was a “surprise”, a situation contrary to the Fine Gael-Fianna Fáil confidence and supply agreement.

In the letter, obtained by the Irish Examiner, Mr Cowen said: “It was therefore quite surprising to read that this funding is going to be found from unspent monies this year or indeed excess income from tax receipts.

“It is also surprising to learn that unspent monies to that extent will be found in 2017, given the extensive pressure on services and given that the fiscal space was so very tight.”

Mr Donohoe told the Oireachtas budgetary committee yesterday the refunds would amount to €171m, while the process would cost €5m, and the equalisation of group water schemes would be another €2m, bringing the total to €178m.

Opposition TDs noted the total underspend in departments so far this year was €322m, including €57m unused for capital projects. The Government has confirmed the water refunds will come from this.

A mid-year expenditure report released yesterday confirmed there has been a €21m underspend in health, a €56m underspend in social protection, and education is €29m below profile.

Another €159m has not been spent across another 13 areas, the review notes.

Opposition TDs at the committee, including Sinn Féin’s Pearse Doherty, questioned whether projects would start later in the year and taking their cash away would therefore cut services.

He also raised concerns that crucial monies could be taken out of capital projects, such as housing, and be instead plunged into water charge refunds.

Mr Donohoe confirmed he had received correspondence from health about funding for homecare packages but he expected spending in that department to come in on target, unlike other years.

But an increase in overtime for gardaí would have to be addressed, committee members were told.

No departments had sought extra money, he said, and no services would be cut to refund water charges, insisted the minister.

He defended criticism from opposition TDs: “Many political parties said water should be paid by general taxation. That’s what we’re doing now. We’re making it happen in a way that public services continue not to be affected.”

However, there are other questions. It remains unknown how households — some who paid over €300 — will apply or be given their refunds. Other commitments by the Fine Gael government on the back of an Oireachtas report around fresh metering for newly built properties and a referendum to keep water in public ownership have also still to be explained. This was stressed by Green leader Eamon Ryan.

Mr Cowen has also questioned why money given to homeowners for the so-called conservation grant — but who did not pay their charges — cannot be recouped. His letter added: “It beggars believe that there seems to be no mechanism available to prevent people from keeping the conservation grant even though they may never have paid any water charges.”

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