Axing of water charges leaves €250m black hole

Department of Finance confirms figure will have to be taken out of next year’s spending proposals

The Department of Finance expects that up to €250m will need to be found now to fill a black hole after recommendations to abolish the current water charging regime.

The department has confirmed this figure will be taken out of next year’s spending proposals and must be found elsewhere, once water charges are formally scrapped.

Social Protection Minister Leo Varadkar remarked on the consequences for the 2018 budget when asked about Oireachtas Water Committee recommendations to drop the current system and instead introduce an excessive use levy. “Of course any decision that costs money impacts on the budget,” he said during questions from reporters yesterday.

Finance Minister Michael Noonan will today also be asked about the impact of permanently removing the estimated €250m for next year factored in for water charges, when he appears at the Oireachtas Budget Committee and takes questions.

A department spokesman confirmed that receipts for payments worth between €240m and €250m would formally come out of savings next year, once legislation comes in for the new system.

While charges have been frozen since a post-election deal was agreed between Fine Gael and Fianna Fáil on charges last year, the expected revenue income was still included for in budgets.

“Between now and the summer economic statement, this will no longer be there. Although the writing is on the wall [for charges], we’ve to follow what is in the statute book,” a spokesman said.

TDs debated the ending to the current water charging regime in the Dáil last night, after recommendations to keep an excess charge for homes and put in meters in new builds.

Details of what the new levy will be must still be worked out and Housing Minister Simon Coveney has until the end of July to bring the changes before the Dáil, when the freeze on current charges ends.

Mr Coveney told the Dail last night that, when the Dáil votes on the new charging regime today, that he will engage with the attorney general and move to draw up fresh legislation.

Fianna Fáil’s Barry Cowen denied during the Dáil debate that his party had flip-flopped during committee talks in recent weeks, but instead said 92% of homes would now not pay charges.

He claimed his party had in fact stopped Fine Gael reintroducing charges for up to 25% of homes by the “back door”. Ending water charges had come about because of “constructive politics” and Fianna Fáil was a “party of the centre,” contended the Offaly TD.

But Sinn Féin’s Eoin O’Broin, noting anti-water protests began three years ago, warned that the two big parties would find it difficult to agree the new threshold for an excessive charge when the new legislation comes before the Dáil.

He claimed Fianna Fáil had held four different positions and the party must have a whiplash because of the “speed of the u-turns”.