The Fine Gael thread

[mikehunt]

http://stephendonnelly.ie/the-uncomfortable-truth-about-irish-water/

There are many things about water charges that Fine Gael/Labour would prefer you didn't know. At the top of the list is this: Not one penny of the money they're demanding you pay will be used to run, or to upgrade, the water system.



In fact, even if everyone paid their water bill, every penny of the money would be spent on the admin involved in issuing us with bills.



As it stands, with the number of people currently paying their bills, the introduction of domestic water charges will result in there being about a €25m less available to run the water system than if the charges had not been introduced at all.



Why? Because it costs a lot to collect the money. And it costs a lot to pay for the so-called 'water conservation grants' that arrived in people's accounts this week – a crass pre-election stunt worthy of Fianna Fáil at its worst. And it turns out that the money raised from the water charge is less than these two costs.



Think about that – the people are being asked to pay €271m this year in water charges. That's €160 or €260 per household, depending on whether one or to adults live in the house, and that's if every single person actually pays.

At a time when children are going hungry, when people can't make the rent, when pensioners can't afford to turn the heat on, when parents are scraping together to send their kids back to school, that €260 matters a great deal.

Fine Gael/Labour claim that the money's needed to keep the water flowing but that isn't true. The way they have set this thing up, the money isn't being used to fund the water system – it is being used to fund the administration of billing for water.



Fine Gael is clearly worried about people cottoning on to all of this. At its think-in recently, backbenchers were instructed to attack the Social Democrats' position on water charges as being dishonest – which gives them full marks for irony at least. In fact the Social Democrats' positon isn't dishonest – the numbers have been verified independently by several very able economists and they tell a very clear story.



The numbers are pretty simple; if everyone paid the water charge (and that is a pretty big if), then €271m would be raised. But all those €100m grants we've been receiving cost the State a whopping €166m. On top of that, simply administering the grant costs another €6m.



Water meters are costing at least €44m a year for thr next 15 years. The Government says we need to have meters to improve conservation and detect leaks. It's true that if you put meters in every house you will find the leaks. But if you talk to engineers, you'll find that this isn't actually how they do it. They put in area meters and follow the leaks. It's called targeted detection and it can be done at a fraction of the cost of putting meters into every house. The actual purpose of the meters is to bill you.



Finally there's the cost of maintaining the meters and reading them, chasing you up, sending debt collectors your way and so on. In the industry, this is called the 'cost to serve', there are no data available for what Irish Water's cost is. but if you assume, generously, that it's at the average level for water companies in the UK, it's about €54m. Add it all up and you get a total cost associated with the water charge of €270m. So even if the full €271m was collected, there'd just be €1m left to spend on the water system.



But only half of households have paid the charge. Let's be generous again and assume that only half the water conservation grants have been paid out. If that is the case,  there is actually €25m less available this year to upgrade the water system than if there weren't any water charges at all. You can understand why Fine Gael/Labour would prefer if you didn't know this.



Now let's be clear: We absolutely do need to upgrade the water system and it seems to be happening. Spare capacity in the Dublin region has jumped, boil-water notices are being cancelled and waste-water treatment plants are being fast-tracked. Irish Water may be the equivalent of a public relations cluster bomb but it does appear to be making significant and much-needed progress on the engineering front and should be recognised for that. The blame for the Irish Water fiasco doesn't fall to Irish Water – it falls to Fine Gael/ Labour. Whatever way you cut it, additional money is needed to upgrade the system: €200m for the first few years is proposed, due to rise to €350m from 2017. So if water charges aren't raising the money, where do we get it, without raising taxation?



The answer is in improving the service. I'm not against some of the concept of Irish Water. The central entity is a smart idea. Fianna Fáil has been talking about going back to the local authority model but that is madness. Pooling the inefficient workings of 40 utility operations into one is vital – it creates the opportunity to carry out rigourous reform, which has been absent from the public sector for so long. It creates opportunities to create improvements and savings in technology, procurements, centralising functions and perhaps in voluntary redundancies.



But we need to stop charging people to cover the cost of charging them. It's dumb and insulting. Instead we maintain current Exchequer support for water. We reduce the operating cost base of Irish Water and we reinvest the savings. The €200m a year needed for the next few years requires a cost reduction of just 16%. Scottish Water reduced its cost base by 40% in the first five years of its existence. Moving the €350m a year investment would an additional 13% reduction in costs. Even if the entire amount couldn't be found, it would be far more efficient to make up the difference through central taxation rather than water charges. The cost of the meters and billing for the first 10 years will be at least €1bn – that would cover the entire additional investment requirements for the water system for five years.



Fine Gael/Labour should hold their hands up and accept this fiasco for what it is. But they won't. Instead, they'll put their own reputations ahead of the public good and continue to insist that people pay out hard-earned and badly-needed money for no reason. Then, in a perfect storm of authoritarianism and incompetence, they'll futher invade people's privacy by using new legislation to take people's money at source.



Here's what the Social Democrats are proposing. Water charges should be abolished, as should the conservation grant. The meter rollout should be stopped. A full and open financial review of Irish Water should be conducted to understand what cost savings can be achieved each year and how they can be reinvested in the water system. Irish Water should be reconstituted as a public body, rather than as a commercial semi-state, to ensure it can never be privatised. And the people running and improving our water system should be allowed to get on with the job – which is the only bit of good news in this entire Government-induced, nonsense.

[Franko]

You do realise thats €80k a year each and he is the taoiseach

You do realise there are SEVENTEEN of them!

[macdanger2]

At a brief read, Stephen Donnelly's figures don't make sense. 54m to administer in the UK and he expects a similar figure here? 

I agree though that the "water conservation" grant is complete bollix. It was simply done to pander to protesters.

Installation of meters is a good idea but we should be using them - people who waste water, wash their car every 2nd day, water their gardens endlessly, etc. should pay more than those who make an effort to conserve.

[Franko]

At a brief read, Stephen Donnelly's figures don't make sense. 54m to administer in the UK and he expects a similar figure here? 

I agree though that the "water conservation" grant is complete bollix. It was simply done to pander to protesters.

Installation of meters is a good idea but we should be using them - people who waste water, wash their car every 2nd day, water their gardens endlessly, etc. should pay more than those who make an effort to conserve.

I could be wrong but believe this figure is the average cost of admin for each of the 28 water companies that serve England, Scotland and Wales.

[Mayo4Sam]

Also what he is talking about are set-up costs rather than enduring, there is a huge difference but why let that get in the way of the anti-water agenda

I still can't get over people against Irish Water, the ONLY way to get on top of the water system in Ireland is a centralised body that brings our water system up to the necessary level to ensure that what we actually produce makes it to the consumer. Water is expensive, treatment, transportation and maintenance are all expensive, just because it falls from the sky doesn't make it any cheaper. The grants are going to cost us millions if not billions in the long run

[mikehunt]

Also what he is talking about are set-up costs rather than enduring, there is a huge difference but why let that get in the way of the anti-water agenda

I still can't get over people against Irish Water, the ONLY way to get on top of the water system in Ireland is a centralised body that brings our water system up to the necessary level to ensure that what we actually produce makes it to the consumer. Water is expensive, treatment, transportation and maintenance are all expensive, just because it falls from the sky doesn't make it any cheaper. The grants are going to cost us millions if not billions in the long run

Irish Water protestors are made up of a few different groups. There are some that don't want to pay for anything, there are those who can't afford it and there are those who can afford it but are not willing to fund another quango. I am fortunate to be in the latter group, I can afford it, I have no problem paying for an efficient water system. Irish Water is another super quango. Water treatment and infrastructure improvement are low on the list of priorities of Irish Water. When you see the likes of John Tierney being appointed to front it and look at his track record you know efficiency won't be achieved. When you see Phil Hogan fronting the implementation of Irish Water, when you see contracts being awarded to a company just bought by Denis O Brien at a knock-down price. When you see bonuses being guaranteed irrespective of performance. When you see Union's in the LRC looking for these bonuses when very little has been done. The arrogance of Noonan and Kenny trying to fob off Catherine Murphy and Paul Murphy who ask legitimate questions. You don't get why people are against Irish Water? God bless your innocent soul.

[armaghniac]

"Water treatment and infrastructure improvement are low on the list of priorities of Irish Water. "

Is this the case? Improvements have been achieved in places which had shite water for years. What data do you have for this statement?
Irish Water may well have a competent engineering arm, perhaps one that is attached to an overheavy bureaucracy, the solution is to address the latter.

[Canalman]

The major problem with establishing Irish Water was that at the time it couldn't tell people how much the bills would be . Some people panicked, high figures thrown about.  Into the confusion stepped the lefties and it took off from there.

[armaghniac]

The couldn't tell how much the bills would because the government ensured that the minister could come up with a political mumbo jumbo formula. All these free allowances are bollix, they should have charged for the water and if there was concern for families then increase children's allowance.

[mikehunt]

"Water treatment and infrastructure improvement are low on the list of priorities of Irish Water. "

Is this the case? Improvements have been achieved in places which had shite water for years. What data do you have for this statement?
Irish Water may well have a competent engineering arm, perhaps one that is attached to an overheavy bureaucracy, the solution is to address the latter.

Salaries and guaranteed bonuses were agreed upon before any realistic idea of revenue was known. Long term contract deals with Siteserve signed sealed and delivered before a bill had been sent out.

Any competent entity would have a vague idea of revenue before agreeing on expenses. Revenue not as much as was hoped, what's their answer? Yes, hand out €100 to all users. The mind boggles with defender's of Irish Water. If they can't address bureaucracy in the HSE what chance of success do u think they'll have with Irish Water. 

And the simpletons that think Irish Water protestors are all lefty loons. Irish Water say 40% haven't paid, probably a lot more than that but either way, doubt they all vote for the likes of Paul Murphy.

[armaghniac]

Salaries and guaranteed bonuses were agreed upon before any realistic idea of revenue was known. Long term contract deals with Siteserve signed sealed and delivered before a bill had been sent out.

Any competent entity would have a vague idea of revenue before agreeing on expenses. Revenue not as much as was hoped, what's their answer? Yes, hand out €100 to all users. The mind boggles with defender's of Irish Water. If they can't address bureaucracy in the HSE what chance of success do u think they'll have with Irish Water. 

Did you not read my post or perhaps you couldn't understand it.
The "revenue" is a function of water demand, which is fairly predicitable, and the billing model, which is political bollix. There is no sense in which "sales" of water have been disppointing, the recenue is all a function of politics.

And the simpletons that think Irish Water protestors are all lefty loons. Irish Water say 40% haven't paid, probably a lot more than that but either way, doubt they all vote for the likes of Paul Murphy.

Some will vote for other irresonsible parties like SF.

[Mayo4Sam]

As for bonuses being agreed people are entitled to be paid for their work, performance based contracts are exactly what should be handed out, rather than guaranteed increments. And you want to attract competent people to these jobs.

[foxcommander]

As for bonuses being agreed people are entitled to be paid for their work, performance based contracts are exactly what should be handed out, rather than guaranteed increments. And you want to attract competent people to these jobs.

Like John Tierney you mean. Check out his track record.

MikeHunt is right. I think people wouldn't have a problem with Irish Water if you knew that it was going to be set up to run efficiently. When you hear that Denis has his paws on these contracts you already know that someone is going to be fleeced somewhere down the line. He doesn't do anything without a nice wedge in it for him (apart from Haiti )
Who else is going to profit down the line?

The general public have been stung a number of times in recent years so you can understand the hesitancy of buying into yet another service that has been privatised. Bin Charges, Tax on your home ring any bells?

The HSE model is a good example of why people don't have much faith in them getting it right.

[macdanger2]

So both Mike & Foxy, you "wouldn't have a problem with IW if it were run efficiently"??

Does that mean you're not in favour of abolishing it, simply reforming it??

[Rossfan]

Wonder does running it efficiently mean making all the non paying customers pay their dues and not be sponging off the decent people who pay for everything
I see the Shirts are said to be lining up some sensible Independents in case Labour can't make up the numbers.