The sorry saga of Irish Water still casts a cloud over everything Coalition tries to do
Published 29/07/2015 | 02:30
NUTS, or Nomenclature Unit's Territorial Statistics, is the official terminology used for the statistical grading of Eurostat countries when determining State aids. Surely the bureaucrats in Brussels who came up with the acronym could never have foreseen a story as bizarre as Irish Water when they came up with the terminology. Oddly enough, it fits very well!
An official ruling by Eurostat yesterday that State funds spent on Irish Water must remain on the national balance sheet, has turned the greenfield utility project Irish Water from a domestic story into a European political saga with more twists and turns than a garden hose-pipe.
For the Government, it has put a big dent into its Budget plans, and a bigger dent in its political credibility.
Behaving like a lorry driver holding his breath while heading for a low bridge, the Government revised the funding model for Irish Water and then ploughed onwards, hoping for the best. Alas, it seems like this particular juggernaut's dependence on State funding is bearing a load too heavy for EU regulations.
When Environment Minister Alan Kelly first made the announcement of a €100 grant to be given to all households, alongside a changed charge regime, many of us scratched our heads and wondered where such a genie in a bottle had come from? If it was that simple, why had no one thought of it before? Moreover, the question was asked how the new arrangements would affect the national exchequer.
It seems that the Central Statistics Office petition to allow Irish Water to qualify as a market corporation has been defeated by the percentage of people who have committed payment to Irish Water. To qualify as a standalone entity, more than 50pc of its funding must come from commercial incomes, and not from State coffers. Recent figures revealed by Irish Water say that payment rate was below that, at just 46pc. If this figure is truly "broadly in line with expectations" then they never expected everyone to pay anyway. So near but yet so far.
At the moment it remains unclear if the European provisos relate to the percentages of non-payment for this year alone, or if the payment and grant system which the Government has put forward is just fundamentally flawed.
One might forgive a fresh young minister like Mr Kelly for grasping at any straw for a political solution, but why would a wiley old fox like Finance Minister Michael Noonan be prepared to roll the dice in Europe on such a big gamble, on such a thorny issue? In the main, the Irish people have been courteously compliant with anything and everything that austerity has thrown at them. Perhaps the Government wagered that at least more than 50pc would simply do it again.
Notwithstanding some of the unpalatable tactics used by some groups protesting against charges, the Government did itself no favours.
With deadlines as changeable as the tides, confusing utility bills, misinformation and a general aura of "we know best-ness" the Government has never really got its arms around this project in terms of communications.
The final insult was to be served up a series of utopian television advertisements about the quality of our water while people in Roscommon turned on their taps to bog liquid.
None of this mattered and Government continued on its merry way, as we slid towards the plughole of despair. Perhaps, for once, Europe will be our saviour and in the best interests of all our sanity will commit the utility to the graveyard of political pipe dreams.
For the opposition parties and protesters, this is manna from heaven, the equivalent of a child receiving a paddling pool, somewhere to splash around and make a nuisance of yourself all summer.
In April, the Government made one good decision in relation to the utility's financing and maintained Irish Water on its balance sheet as a precautionary measure. Therefore, technically, from a fiscal perspective, the potential for spending has been unaffected by this development.
Thankfully for the hard-pressed taxpayer, the Taoiseach's pre-summer declarations that USC and taxation levels would be cut, are still possible, technically.
But politics is not about technicalities, it's about public perception, and the Government will be perceived as pursuing a short-term solution that was naive and cack-handed in an effort to ameliorate public disquiet and problematic protests.
Every interest group in the country can potentially use Irish Water as a battering ram for their own wish list.
Official advice from the Department of Finance and the Department of the Environment will be turned over in the days ahead.
A number of months ago, the notion that Irish Water could be disbanded seemed preposterous. A bit like the bank guarantee, once we gambled on it, our fate was determined elsewhere. We may yet have a Committee of Inquiry into Irish Water.
The Government incumbents and those who scoffed at explanations from former officials and ministers who said 'I was simply following official advice at the time', may develop new sympathies.
Irish Water is the story that just keeps on going and giving. Having finally got the hang of public relations, the Government finished this term with a flurry of announcements, a summer sojourn in Sligo, and a bonanza Budget to look forward to in the autumn.
Irish Water is now again in danger of becoming the story of this silly season.
It continues to cast a cloud over everything this Government tries to implement.
With no obvious solution to this muddle, this ruling may have reawakened latent disquiet and secured an autumn of discontent. It's all just NUTS.