Sunday 25 September 2016

It's hard to swallow, but Irish Water's here to stay

Government needs to admit errors, writes Eddie Molloy, then reassert our real need for an effective utility

Eddie Molloy

Published 22/08/2015 | 02:30

Water grant
Water grant

The Government has been rightly castigated for its handling of Irish Water, from the blundering start-up overseen by Phil Hogan, through the list of misconceived ruses to redeem the situation, all of which have boomeranged, right up to the latest revelation that a separate data base will be needed to manage the payment of the absurd €100 "conservation grant", and confusion over who should get it.

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As a case of 'old politics', the Irish Water saga is hard to beat, but the Opposition is no less guilty of 'old politics', seeking short-term political gain with populist rants about "bloated quangos", "millions squandered on consultants", water being "a human right", paying for water out of "general taxation", "fixing leaks first" and a "bonus culture".

This is the kind of pap offered, for example, by Richard Boyd-Barrett in a recent radio interview, as the basis for "scrapping Irish Water".

Just use the word "quango" and you can get the crowd going, forgetting that some of these much maligned organisations are essential to our well-being, such as the Food Safety Authority, the NTMA, RTÉ, the National Library or the ESB.

The alleged bloating seems to refer to the "millions spent on consultants" at the outset. However, the vast bulk of this money is being spent on information systems that are essential to running a national utility. If anyone doubts the wisdom of investing in such infrastructure, consider that to this day the HSE does not have the information systems needed to run an efficient, safe health system.

Another echo of the HSE about which the opponents of Irish Water, particularly those trade unions who are involved in the protests, are conveniently silent, is the scandalous deal that was hatched with Phil Hogan to lock in all staff contracts until 2026. This includes the contracts of a seven-man crew I saw on a Sunday morning, called out - as I discovered later - on premium rates to fix a small leak. The cost of this over-manning is borne by the hard pressed taxpayer.

To the management's credit, this outlandish arrangement is being tackled by a vigorous voluntary redundancy programme.

Water is indeed a human right, but it has to be paid for just like education or food. The idea that water can be paid for out of "general taxation" is a blatant political deceit that ultimately will impact most on poor people. By driving the debts of Irish Water back on to the Government's balance sheet, the effect will be two-fold. Firstly, investment in water will have to compete with restoration of vital social services decimated over the past decade. Every day we hear of nursing homes unfit for purpose, long waiting lists for children needing psychiatric care, families made homeless - and so on. Not one of those who rails against Irish Water has come anywhere near calculating the full costs of meeting all of these pressing needs, while blithely conceding that the utility's requirement for hundreds of millions over the next decade should compete with these priorities.

Secondly, the impressive programme that Irish Water engineers have mapped out to provide clean water, to stop fouling our lakes rivers and beaches, and to replace lead pipes, will slow down because the quantum of funds needed to carry out these planned works will not be forthcoming from the Government's coffers.

The losers, as always in these circumstances, will be those who genuinely can't pay, the very people whom protesters over charges purport to care about.

The weakest point in the anti-charges campaign has been regarding the need to build some form of incentive to conserve into the financing of the system. Pressed on this issue, Boyd-Barrett's retort was to say that we should first fix the leaks.

Easier said than done. The engineers who understand these things estimate that it will take over 20 years to reduce losses from 49pc to 30pc, and 50 years to get it down to 20pc. In the meantime, how do we incentivise conservation?

I have looked into the "bonus culture" at Irish Water and what I see is a tough-minded performance management system being applied with consequences for under-performers, including being let go. Unlike the public service where 99.9pc receive ratings of three or higher, entitling practically everyone to an automatic pay increment, senior management are insisting on a spread of ratings, with a small number of stars, a small number at the bottom of the scale and most in the middle, the 'normal curve of distribution' in human performance.

Another proposal, this one from Fianna Fáil, is to scrap Irish Water and to restore responsibility to local authority water units, because "they are the people who know the local situation", as their spokesman Barry Cowen has explained. This kind of folksy stuff may win a few votes, but a unified national utility is required to achieve economies of scale, consistency of service nationwide and responsiveness to crises (as the ESB does superbly).

With infinitely more pressing matters to address as a society, Irish Water seems likely to dominate and even overwhelm the discourse in the run-up to the general election. If this occurs, it will be an indictment of our lamentable political culture, among government parties and the opposition alike.

The bad politics that got us into this mess offers no viable alternative while indulging in the most blatant political opportunism seen in Ireland for a very long time.

After decades of political neglect and, whatever its name, the country urgently needs a single, national water utility, centrally directed and locally delivered; that is publicly owned and adequately funded by a model that includes an element to incentivise conservation and supports those who cannot pay the charges; that is cost-effective relative to the most challenging international benchmarks; that has the capacity to borrow for investment in its own name - like the ESB; and that is placed back under the governance of an independent regulator with the necessary delegated powers of invasive scrutiny and effective sanctions.

The Government arguably would fare better in the impending election if they came clean now and candidly admitted they mishandled matters from the start (instead of defending Phil Hogan, as some have done this week); reasserted the non-negotiable essentials of our water utility; abandoned the farcical €100 cash-back; and challenged more vigorously the sham rhetoric of the Opposition.

Eddie Molloy PhD is a management consultant

Irish Independent

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