Tuesday, 6 October 2015

Irish Water – It could have been different

In an earlier blog I listed ten mistakes that turned the establishment of Irish Water from a good idea into a total disaster - a disaster that created huge divisions in Irish society and placed a heavy financial burden on the Irish taxpayer. I didn’t go into much detail on the mistakes so perhaps I should elaborate.
  • Lack of meaningful debate:
At the top of my lists I suggested that a lack of meaningful debate was the prime cause. The necessary legislation was pushed through the Dáil in record time with little input from Government backbenchers or opposition TDs.
The lack of debate extended to the media which persisted in treating the matter as a black and white issue – should householders be obliged to pay water charges or should the cost of water continue to be covered by general taxation? At no time did the question of how payments would be calculated – usage or a flat rate per house – receive any media attention.
Similarly the media never questioned the argument that Irish Water should become a semi-state commercial body to allow it borrow off (the Government’s) balance sheet. However the money was borrowed, it became another liability for the Irish taxpayer.
  • Arrogance:
I have never met the then Minister for the Environment Phil Hogan but he always came across, on television and in the Dáil, as an arrogant man. He appeared dismissive of all arguments against his view. He knew what he wanted to do and was in a hurry to get it done. There is much to be said for being a man in a hurry but it is dangerous without vision, talent, knowledge and a willingness to listen.
It was no doubt Mr Hogan’s arrogance that severely curtailed the Dáil debate on Irish Water.
  • Incompetence:
Incompetence is an integral part of all the reasons I cite for the Irish Water debacle but it is at its most serious in the failure to produce a cost benefit analysis on the installation of water meters. Mr Hogan should have insisted on one. His officials should have delivered one and insisted that it be considered. If a cost benefit analysis had been prepared the question of water meters would have been abandoned immediately.
Other ministers must also accept the accusation of incompetence in allowing Mr Hogan have his way on Irish Water. This is particularly true of Brendan Howlin who, during the election campaign, was dismissive of the idea of spending money on meters before fixing the high incidence of leakage. Now as Minister for Public Expenditure and Reform he was willing to approve the expenditure of €539m on meters.
We are left to assume that little by way of a plan was in existence when Irish Water was established. There is no evidence to show that anyone had the slightest idea as to how much would be spent on consultants, on a help desk, on reading and maintaining meters. It is doubtful if there was even a goal as to what percentage of total expenditure should go on back office functions compared with the expenditure on actually delivering water and treating sewage.
  • Disconnect between politicians and public servants on the one hand, and the struggling electorate on the other hand:
Even with modest decreases in salary arising from the recession, our politicians are extremely well paid. None, except those messing in the property market, will have felt any of the pain experienced by their constituents during the economic downturn. The same is true of public servants in decision making positions.
On the other hand the majority of people who were being asked to pay water charges had either lost their job or had their salary cut; were struggling to pay mortgages or saw their social welfare payments curtailed; were forced to pay increased taxes, including VAT, and the hated Universal Social Charge; and home owners were faced with a hefty property tax irrespective of their ability to meet their mortgage repayments.
While politicians sailed through the economic downturn with only minor discomfort, most of their constituents were to some extent already suffering from financial hardship before water charges became an issue.
  • Lack of expertise among decision makers
It is glaringly obvious that few of our politicians have any expertise in running a country. That is not unusual around the world and can be compensated for by bringing in experts and having knowledgeable public servants supporting ministers. Unfortunately it seems that some of our ministers believe they know better than their advisors.
It seems obvious that if anywhere in Government there was expertise in solving known and predicted difficulties in managing water and sewage in Ireland it was largely ignored.
  • Misplaced assumptions (failure to challenge the so called “givens”)
    • It is assumed that metering will bring about a significant reduction in water throughput - it won’t.
    • It is assumed that detecting and fixing minor leaks will do likewise - it won’t.
    • It seems to be assumed that any investment in water conservation will result in a payback - a cost benefit analysis is always necessary.
    • It is assumed that using a sprinkler on a lawn is unforgiveable and must be stopped - this and other seemingly wasteful practices are of little consequence.
  • Focusing on what is done elsewhere
Too many of those who argue in favour of water meters and water charges point to the fact that all other OECD countries have gone down this road. That has no relevance whatsoever. There may indeed be a need for metering in countries such as Spain, Portugal, Italy and Greece with their low rainfall and high temperatures. There may be a need for meters in Holland with its high population and small land mass. Each country has its own reason for introducing meters, although I think some have followed the herd instinct. Ireland is quite different and should find its own solution.
  • Failing to consider issues unique to Ireland

The main issue unique to Ireland is the high volume of rain we are assured of every year. The fact that rain falls throughout the year and isn’t seasonal is an added advantage.
It should have been acknowledged from the outset that Ireland has more water than it needs. The problem we occasionally have to face is that it is not always in the part of the country where it is needed. Solving that problem should have been Irish Water’s first priority.

  • Subservience to EU officials
It is often claimed that the Troika, and later the European Commission, insisted that Ireland use meters as a means of conserving and charging for water. Irish ministers and public servants should have had the courage to take a stance on this and to make it very clear that water conservation is not an issue for Ireland.
  • Obsession with the word “conservation”, particularly by the Green Party who appear to have set the whole debacle in motion
This is another misplaced assumption but worthy of its own headline. The initial propaganda around the need to conserve water set the scene for the current situation. Most politicians and commentators quickly accepted that conservation was important. They failed to see the incongruity of living in probably the wettest country in Europe and at the same time advocating the need for water conservation.