Irish Water to seek voluntary redundancies

Irish Water says it will seek to reduce its 4,000 plus staff naturally over time through early and standard retirement and voluntary redundancy.

It was responding to a claim by Prof John FitzGerald of the Economic and Social Research Institute that overstaffing will cost the newly established utility up to €2 billion.

He said the company probably needed about 1,700 staff but instead is going to have to pay for more than 4,000, who will provide services to it by way of 34 local authorities.

Prof FitzGerald said the scale of the waste involved in this structure makes all other problems associated with the establishment of the new utility “pale into insignificance”.

In a statement today, Irish Water said there are 4,300 people employed in the water services sector within the local authorities.

“While this number will reduce over time, the actual headcount requirement is intrinsically linked to the levels of investment within the sector in automation, rationalisation and infrastructure and operational upgrades,” it said.

Given the demographics within the water sector, with over 50 per cent of workers aged over 50, the company predicted there would be significant “natural attrition” over the coming years.

Provision will also be made for voluntary redundancy schemes, it added.

While the new utility believes it will need about 1,700 staff, it has signed service level (SLAs) agreements with the 34 local authorities who run the Republic’s water and waste water infrastructure. As matters stand, these legal agreements, which run up to 2026, involve about 4,300 local authority staff, whose cost is to be paid by Irish Water.

The company said the SLAs would reviewed annually to ensure that they are delivering savings against specific targets and performance measures.

“It is important to stress that the creation of a single national water utility will drive significant savings through asset management and operational improvements to the water system.”

The company reiterated its claim that the establishment of a single water company would save the exchequer €2 billion between now and 2021.

It noted that an equivalent company, Scottish Water employed 3,540 staff in 2013, 18 years after the three regional water authorities were established and 11 years since these were merged to form Scottish Water in 2002.

The Scottish utility, which serves 2.4 million households and 159,000 businesses, had 5,650 employed in 2002.

Nonetheless, Prof FitzGerald said while the primary purpose of establishing Irish Water is the creation of massive savings from increased efficiency, a large proportion of the potential savings have been jettisoned because of how the employee issue is being handled.

“It is massively overstaffed. They are being made to spend €1 billion to €2 billion more than they need to over the coming decade,” he said. He added that the issue was one politicians did not want to address.

Despite his criticism, Prof FitzGerald said the creation of Irish Water will free up an extra €500 million in Budget 2015, which could be used for tax cuts or extra expenditure. This is because the State will no longer have to spend these funds on water.

The creation of the utility will also knock up to 2 per cent of gross domestic product off the national debt, he said, as its borrowings will not go on the Government’s books.