Noel Ahern (Dublin North West, Fianna Fail)

I thank the Senator for raising the issue. The Government's water services pricing policy framework, which was adopted in 1998, requires the recovery of average operational and marginal capital costs of water services from the users of those services, with the exception of households using the services for domestic purposes.

The cost of water services provision is increasing hugely. This is not just as a result of general cost increases, but also reflects the considerable operational costs associated with meeting higher quality standards and the very significant investment in water services infrastructure now being made in the context of the national development plan. This investment is essential if we are to maintain and improve our environment and facilitate our rapid economic development. The scale of this is illustrated in the water services investment programme. In the period currently covered by this programme, from 2004 to 2006, more than 800 schemes are at different stages of development with a total investment value of €5 billion. Almost 150 new projects worth €556 million have been added to the rolling programme this year alone.

The recovery of the costs of providing our water services must be viewed in this context. It is vitally important that local authorities have the resources to properly maintain and manage this important infrastructure. It is also very important that major users of water services do so responsibly. We are applying this approach in respect of non-domestic users of water services, while funding domestic use in an increasingly transparent way through the local government fund.

It is a matter for each local authority to set the appropriate level of charges for non-domestic users of water services. At present local authority water services charges and the process used for calculating non-domestic costs vary hugely, as the Senator said. In accordance with Government policy, local authorities are moving to a more uniform system for determining and applying water services charges. In this regard, the policy framework provides only for the recovery of the actual cost of providing water services to the non-domestic sector and that this be done by means of a meter-based volumetric charge.

Universal metering of non-domestic users will ensure that charges directly reflect actual water usage with those placing the greatest demand on our water services paying the most. The policy is being progressively implemented in the period to 2006 and is in accordance with an appropriate application of the polluter pays principle and the requirements of Article 9 of the EU Water Framework Directive. This policy does not provide for the exemption, whether by recoupment or otherwise, of any non-domestic users, including those engaged in the provision of educational services, from the charging policy. Apart from specific considerations of water services policy, this type of exemption would represent a subsidy from local government funds towards a service the resourcing of which is not the responsibility of local authorities. This subsidy would reduce the funds available to local authorities to deal with services, including housing, industry and social services, for which they are directly responsible.

I understand the point the Senator is making. However, I presume the confusion relates to the varying charges in different local authorities. As this becomes more standard, it will just represent one more cost for the boards of management, which get their funding from the Department of Education and Science. If such charges are regarded as standard legitimate costs, it is up to the boards of management of schools to make their pitch to the source of their funding. Schools are being treated as any other type of user. The Government's view is that the only exception should be domestic users.