ANYONE WHO thinks that some €160 million in revenue from the new household charge will go towards providing additional funds for Ireland’s cash-strapped local authorities is sadly mistaken.
Unlike the €200 annual charge for holiday homes and second properties, which is paid directly to the relevant local authorities and represents additional funding for them, the new €100 household charge is being collected centrally and will provide nothing extra at a local level.
In most other European countries the opposite is true: local taxes and charges are used where they are gathered.
Homeowners here are now being encouraged to register their houses or apartments and pay the new charge online through a website, HouseholdCharge.ie.
However, the money flowing into Government coffers from the new payment will simply allow a reduction, by an equivalent amount, of the cost of the centrally controlled local government fund. This fund is paid out to local authorities for day-to-day activities, including
the maintenance of non-national roads.
The introduction of the new household charge is just the latest illustration of how centralised the State has become. And having been stripped of many of their other responsibilities over the years in health, education and transport, local authorities are now also set to lose their most fundamental function – the provision of water services.
The Government has decided to set up a State company, Irish Water, to take over this sector – part-funded by new domestic water charges due to be introduced after a programme of installing meters to monitor consumption has been completed, possibly in 2014.
Nobody yet knows how much we will have to pay.
The Campaign Against Household and Water Taxes has claimed that homeowners will be hit with “stealth taxes” of €1,000-plus a year within two years when the combined cost of water and household charges are taken into account. Last Friday, the campaign announced a series of public meetings around the State. It has urged householders not to register and not to pay the household charge. The campaign sees Irish Water as a Trojan horse for privatising water services.
“Water is the most essential element of public health and it’s completely taken for granted here – we’re not even willing to pay for it, for God’s sake,” said one county manager, who did not wish to be named. “We’ll be left with planning without the two essential tools for making it work – water and transport.”
Yet Minister of State for the New Era Project Fergus O’Dowd (FG) has acknowledged the “good track record” of local authorities in delivering water facilities and addressing customer needs, “as demonstrated in their response to severe weather events”.
One wonders whether the same will be said in future of Irish Water, when it takes over.
During the icy weather last winter – after up to 60,000 homes in the North were left without water because of burst mains and depleted reservoirs – centralised Northern Ireland Water had to import supplies from Louth County Council, which sent tanker-loads of water across the Border from Drogheda and Dundalk.
Public outrage prompted chief executive Laurence MacKenzie to step down after just over a year in office and there was also pressure on then Northern regional development minister, Sinn Féin’s Conor Murphy, to resign. And the key to its failure was that, unlike local authorities, the water company didn’t have personnel “on the ground”.
However, the Government has ignored what one source described as this “feckin’ disaster” north of the Border and is ploughing ahead with its plan to establish Irish Water. It has also failed to acknowledge that deficiencies in the existing system are largely due to under-investment, for which all administrations are culpable.
According to Minister for the Environment Phil Hogan, Irish Water would have “a steady level of capital investment of potentially €600 million per annum in water services”.
This is based on an assessment by consultant PricewaterhouseCoopers and “far exceeds the capacity of the exchequer to fund in the current economic climate”, he said.
Among other issues, the PwC report highlighted the “fragmentation of current structures”, with 34 local authorities responsible for water services, the “inability to achieve real economies of scale”, the “high operational expenditure” (€715 million in 2010) and difficulties in developing projects due to “funding constraints”.
There was also the problem of so much water being wasted, through network leakages. This “unaccounted-for water”, as it’s called, amounts to 45 per cent on average, and much more in several rural counties. A targeted programme of investment has helped to reduce the level of loss to about 30 per cent.
Mr Hogan pointed out that Ireland is “the only country in the OECD where households do not pay directly for the water they use” and said this “is simply not sustainable” – particularly with the “challenges” we face in complying with the EU Water Framework Directive, which “will require very significant levels of investment”.
What will happen to private water schemes, of which there are more than 60 in Co Donegal alone, is unclear – as is the role Irish Water would have in dealing with the inspection regime for
the 400,000-plus septic tanks in rural areas.
Given that this is now such a political hot potato, it may well be left to the local authorities.
On the household charge, due to be paid by the end of March, the Socialist Party and other left-wing groups are leading a campaign opposing it.
They oppose it, even though it is a prelude to the introduction of property taxes that will be levied on a proportionate basis; those with five-bedroom mansions will have to pay more than others with modest terraced houses.
The household charge website says the payment is “an interim measure and proposals for a full property tax will be a matter for consideration by the Government in due course”.
However, it has taken the State Valuation Office 12 years to complete valuation surveys of homes in just three local authority areas – Fingal, South Dublin and Dún Laoghaire-Rathdown.
“We have a whole lot of unemployed estate agents, and they could be given the job. It’s not rocket science,” one source said.
Fianna Fáil's fateful decision to abolish domestic rates in 1978 severed the connection that should exist between citizens and their councils – by removing the principal mechanism by which taxes raised locally were spent locally, and cemented an in loco parentisrelationship between central and local government.
Phil Hogan has concentrated on consolidation, such as the proposed merger of Limerick City and County Councils and reunification of Co Tipperary under a single local authority. But he hasn’t signalled his intentions about the future of 80 borough or town councils, which the McCarthy report said was far too many.
A draft Framework for Sustainable Development for Ireland, issued under the radar two days before Christmas, notes that a policy statement on local government reform “is in preparation” . . . with the aim of making the system “more coherent, efficient, effective and ultimately more responsive to its citizens”.
Whether this will involve substantial devolution of power from the Custom House to the local authorities will be the acid test of Mr Hogan's real intentions. "What will local authorities be left to do?" the county manager who spoke to The Irish Timesasked. "We don't even pick up the bins any more."
