Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I welcome the opportunity to discuss with the select committee this morning my Department's further Revised Estimate for 2017. I am accompanied by Ministers of State Deputies Damien English and John Paul Phelan and Department officials Mr. John McCarthy, Ms Mary Hurley, Ms Maria Graham, Ms Lorraine O'Donohue, Mr. David Walsh, Mr. Maurice Coughlan, Ms Theresa Donohue and Ms Janet Jacobs.

The 2017 Revised Estimate for my Department was published last December and was considered in select committee last March. That Estimate is now being revised to do two things: first, to take account of the transfer of community functions from my Department to the newly established Department of Rural and Community Development, under the leadership of my colleague, the Minister, Deputy Michael Ring; and second, to reflect the Government decision on the future funding model for Irish Water and the planned refund of water charge payments made by domestic customers.

I will take the community transfer element first. On 14 June 2017, the Taoiseach announced his intention to establish a new Department to undertake responsibilities in relation to rural and community development matter, to be led by Deputy Michael Ring. This has resulted in the transfer of community-related functions from my Department and of associated spending subheads from its Vote. The two community business units which have transferred to the new Department cover: community and voluntary supports and programmes, and social inclusion and communities.

These business units have a budget of €77.5 million for 2017, including administration costs. The transfer comprises a total of €67 million in current expenditure and €10.5 million in capital expenditure, together with appropriations-in-aid amounting to €6.3 million. I have circulated with my statement a table that summarises the financial transfers, which in accordance with established practice cover all spending in the areas concerned in the full year 2017.

In addition, the relevant staff implementing these programmes have moved to work in the new Department.

Moving on to the funding for Irish Water, the new Estimate for 2017 also reflects the Government decision on the future funding model for Irish Water and the planned refunds to domestic customers. The Water Services Bill 2017, currently in the Seanad, provides for the repeal of the 2014 domestic water charging regime and introduces a new programme focused on the promotion of water conservation, under which a levy will apply in certain circumstances for usage of water above a reasonable threshold. In making these changes, provision is made in the Bill for the extinguishing of liabilities under the current regime and the making of refunds to the 990,000 customers who paid in accordance with the 2014 Act. This will give rise to a new funding model for Irish Water which is underpinned by the Bill. The Bill thus reflects the recommendations of the Oireachtas Joint Committee on the Future Funding of Domestic Water Services, which were adopted by both Houses last April. Accordingly, a provision of some €293 million for payment to Irish Water has been made in the Revised Estimate, in programme B - water services. This figure includes the €173 million needed to pay refunds to the 990,000 domestic customers. There are also administrative costs associated with the refund process, estimated to amount to almost €5.9 million. A further €114 million is being provided to cover the additional funding required by Irish Water arising from the extension of the suspension of domestic water charges to the end of 2017.

In conclusion, following the transfer of community functions and the making of the new provisions for Irish Water, the gross budget for my Department in 2017 now stands at €1.995 billion. Taking into account the changes in those two programme areas, this represents an increase of €215 million on the Revised Estimate published last December. I am of course happy to discuss the details with the committee.