EUROSTAT HAS REVEALED further details of the issues it has with Irish Water, in the wake of its ruling on Tuesday that the troubled utility can’t be kept off the government’s books.
To pass the ‘Eurostat test’ the government had to prove to the European statistics agency that half of Irish Water’s revenue came from customers.
Failing to meet that mark means that money spent on the utility – more than €500 million – must now be included in national debt.
In its initial summary from earlier this week (set out below) the agency said it had a problem with the capping of bills and the fact that many households hadn’t been paying their bills.
Going into much greater detail on the utility’s organisational structure and financing in a document published today, the latest findings won’t make for pleasant reading at Government Buildings.
Our own CSO, in an explanatory note, pointed out that the ruling came under a new procedure for statistical classifications. There’s scope for a “broad interpretation” of these standards, the agency said – adding that the classification for Irish Water would be reviewed again next year.
What are today’s findings?
Setting out its issues with the €100 conservation grant being offered to households who register with the utility, Eurostat notes in its decision letter to the CSO that “it is not specified in the relevant legislation to what extent the grant will in fact be conditional on water preservation activities”.
The document continues:
All households will be eligible for this grant, even when not Irish Water customers, by mere administrative registration with Irish Water.
Regarding the set-up and structure of the organisation, the agency notes that because so many Irish Water staff remain de-facto government employees “it could be concluded, therefore, that Irish Water would have no control or autonomy of decision over a large part of its workforce“.
Setting out its conclusion, Eurostat notes:
“Irish Water merely reorganises previously non-market activity carried by local government in a way that currently does not permit to assess whether there is a genuine commercial basis.
“A large part of the previous arrangement will continue, most prominently the local authorities’ staff and the billing of non-domestic users.
“No competitive bidding has been carried out and the commercial basis is that of a heavily subsidised public monopoly.
“Whilst the billing of domestic users is a clear change in the setup, it is unclear whether it is material enough for Irish Water to be considered as a non-financial corporation, given the non-market character of the activity.
“Eurostat notes that domestic users will only pay [REDACTED] million euros, when netting with the grants which users will collect. In the meanwhile government support is expected close to €800 million a year, in various forms: current transfers, grants to households, or capital injections.
Responding to the publication of today’s decision letter to the CSO, Sinn Féin’s Pearse Doherty said it was “a brutal critique of a failed, misconceived and stupid ploy to get Irish Water through its first couple of years”.
“Government incompetence has sunk that prospect now. Following the release of the Eurostat decision it is time the government stopped the spin and admitted defeat and abolished both water charges and the failed entity that is Irish Water.”
In its statement on Tuesday, the government insisted the Eurostat ruling would have no impact on policy and no impact on charges.
Asked this evening whether the coalition was now considering scrapping Irish Water and starting again, junior minister at the Department of Finance Simon Harris said it would be a “stupid” and populist option, and insisted there would be no u-turn.
(You can read the full letter here. Have fun.)
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