Jury out on success of Irish Water strategy as deadline passes

When Revenue was brought in to administer the property tax, it was a triumph for efficiency. But not for politics. What had started off as a household charge could not be dressed up as anything other than a tax.

The new water charges are a form of indirect taxation, but have been presented as something else - as a socially useful initiative to encourage people to conserve water as well as a way of investing in a modern infrastructure that is fit for purpose.

As such, the onus has been on people to sign up without the benefit of the big stick of compulsion that Revenue can wield.

Even with the best-made plans and a gale force wind behind it, Irish Water would always have struggled to achieve critical mass in terms of sign-ups.

As it was, the new utility was a Byzantine mess from the start. Damage was inflicted by a combination of factors. These included a haphazard launch, a few hapless interviews which exposed extraordinary consultant costs and a very generous bonus culture, and a very well organised mass protest against the charges.

Feeding frenzy

And then it became a feeding frenzy: disclosures on long service level agreements with local authorities and guaranteed staff levels; a patronising information pack; claims of over-staffing, and of over-pay.

What addled potential customers most, however, was the prospect of relatively high annual bills and high standing charges, as well as uncertainty about metering.

The fruit of that was a disastrous 2014 for the Coalition, where this issue alone caused more damage than any other.

Following a series of mass protests in October and November, the new Minister for the Environment Alan Kelly came back with a revised package with a lower standardised cost, plus the carrot of an annual conservation grant of €100 for all households who register.

The political gamble was that this would take the heat out of the protests. As the February 2nd deadline passes, the number of households which have registered is an improvement - but is certainly not the spectacular breakthrough the Government side might have expected.

Sure there were an additional 30,000 sign-ups over the weekend, and the figure of registered households has bypassed the million mark.

When the figure is parsed, however, it is far less impressive when those hundreds of thousands of households who have signed up but are not customers (because they get water from a private group scheme or from a well) are removed from the equation.

By the deadline, the registration rate will be about 60 per cent - an improvement, but hardly staggering.

Wholly opposed

In addition, the turn-out at the protests over the weekend was higher than anticipated, showing there is still a minority (that is not insignificant) which is wholly opposed to the charges, and which is undeterred by the negative publicity following the insidious verbal attacks on President Michael D Higgins in Finglas, and disgraceful baiting of gardaí that happened that day.

The Government has regained some initiative, and this issue no longer seems intractable as a political problem. That said, it is not out of the woods yet.

A better test will arrive in April, when the first bills drop through letterboxes. Politically, the Government needs to show majority support for the utility among citizens, as well as a decent revenue scheme.

At this stage, it cannot be said for certain that it can achieve either or both of those aims.

There are some ancillary issues too. There is the Eurostat "market corporation" test in April, where the utility will have to show that 50 per cent of its revenue is non-governmental.

Its own estimates are €271 million from residential customers, €229 million from commercial, the subvention from government of just less than €400 million, and capital investment of €400 million.

It says it will go to the markets seeking additional (private) funding.

On paper, it should easily pass the test. But the reality is that it is highly unlikely that it will receive anywhere near €271 million from domestic customers this year.

Will there be sanctions? Yes, but they will not be applied for a year.

That decision is political, as it has delayed potential confrontation (and court cases) until after next year’s election.

The Government’s hope is that Irish Water will become as much a non-story as possible in 2015.