That is an appalling return on the €1.2bn spent annually on water services.
Raising about €500m a year in water charges — from an average charge of €240 per household — is what’s required so Irish Water can credibly claim, when assessed by Eurostat, that it is a genuinely commercial, semi-state body. Eurostat’s imprimatur allows Irish Water, based on its projected income from charges, to borrow in the financial markets, and not have its debts included on the Government’s balance sheet.
This salient fact is at the heart of the political conundrum. We are in for several more years of fiscal austerity. In October, a downward budget adjustment of €2bn will be required. One quarter of that will be accounted for by projected water charges.
The story to tell, but which has been squandered in squabbling, is how a determined government, pushing on after the Troika left town, implemented water charges to invest in upgrading a dilapidated system. They would then explain, in an opportunity certainly lost for now, how water charges are not only an investment in a better quality of life, a cleaner environment and a more competitive economy, but are worth €500m that would not have to be found in budget cuts or higher taxes.
The real story isn’t about what can be agreed at Cabinet. The story is our water system, which isn’t fit for purpose and cannot be relied upon indefinitely. The indefinite has arrived for more than 18,000 households, mainly in Roscommon, where boil notices mean people cannot safely drink water from their own taps. Unless there is immediate investment, it will get worse.
It is an indictment of the scale of the Government’s loss of control of the national narrative that this is now not the main focus.
Water charges are being introduced for a good reason; or, I think so. It is too much to expect the prospect to be popular, but it was reasonable to hope that it could be explained credibly. Beneath the furore in government about whether the proposed opt-outs are socially fair, or electorally palatable in advance of European and local elections, now 30 days away, is a reality we cannot afford to ignore.
We are facing an estimated €10bn of investment in water services to 2027, which cannot, on the basis of any credible economic programme, be afforded by the Exchequer. When candidates canvass your vote because they are against water charges, ask them where they will find the money to keep water flowing through your tap, let alone flushing your chamber pot.
Over the next 10 years we need to invest €600m per year, and that’s running to stand still. The alternative is widespread shortages, mainly along the east coast in summer, for up to one million customers, and boil notices elsewhere, for others. A crucial piece of economic competitiveness risks becoming a negative calculation for business, especially foreign business considering investing in Ireland.
And user charges do influence user behaviour. We are all more careful with what we pay for. In the group water schemes, where people have paid for their water for years, usage is estimated to be 15% and 20% lower than the national average.
It reminds me of the feckless youth I spent squandering my parents’ money. I didn’t deign to think a lot, I can tell you, about switching off the lights or the immersion. Paying your own bills is a remarkable promoter of thrift. Remember the plastic bag charge? It worked for a reason.
If user charges influence behaviour and curb waste, the bottom line is we have a system that will fall foul of European directives by 2016, unless there is heavy investment. That deadline is only one staging post to a deadline in 2021.
Unless we scramble to catch-up, we are on target to fail. Having been there before, regarding septic tanks, we will be before the European Court of Justice again on water standards.
It is not the spotlight a ‘clean, green’ island needs, especially not one desperate to attract inward, foreign direct investment and to export food.
The Government had a chance to say about water charges that it was doing the right thing for the right reasons.
Beset, first, by Irish Water’s mishandling of the project, the Government’s decision-making is now contaminated by a feral political fear of the waiting electorate. It is not that the fear is unfounded. It is that by being seen to cower in front of it, the prospect of convincing people that this is the right policy is further undermined.
ON THIS issue, as on others, Labour is the likely bigger loser. When the Government meets next week again, a range of reliefs on water charges will likely be agreed.
If they are not, it is questionable if there remains a capacity to govern at all. But regardless of what reliefs are agreed, the opposition will create a hullabaloo about whoever is not included.
And, critically, the Government will have fatally compromised its capacity to tell its own story, and to convince some people, over the coming weeks, of the importance of the policy it is promoting. The leakage of political capital on this project now far exceeds the 40% of water disappearing from the national waterworks.
Labour is far from being solely responsible for the messes that have blighted the Government since the New Year. But on this issue they are hoist, as on so many others, on a petard of their own making. In creating a fuss about fairness now, the party is not reminding its lost supporters of its core values, it is reminding them of how those values were abandoned.
Labour entered government in 2011, when, for the first time, they were not required to provide an alternative administration to Fianna Fáil. To the incredulity of those who voted for them and have not forgiven them, Labour did so on the basis of a narrative that it was somehow required to implement the economic programme of the previous government it had campaigned against. That narrative, about doing tough things in tough times, has been premise and preface of policies in government that were anathema in opposition.
In political terms, on water charges, it is now trying to put lipstick on a pig. It is not pretty and it is not working. But that is not the issue; waterworks that are fit for purpose are the issue.