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

I present the Water Services Bill 2017 before the Seanad. The Bill provides for the repeal of the 2014 domestic water charging regime and introduces a new regime 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 issuing of refunds to the 99,0000 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. In so doing, the Bill reflects the recommendations of the Joint Oireachtas Committee on the Future Funding of Domestic Water Services, which was adopted in April by both Houses of the Oireachtas.

The publication of this Bill brings us towards completion of an extensive deliberative process about the funding of domestic water services. Through this legislation, the Government is seeking to protect Irish Water as a single public water utility, and to continue to work to improve and modernise water services throughout the country. Whilst there may be many opposing views on the appropriate way to fund water services, this Oireachtas has had a full examination of the matter and came to a compromise that is reflected in the Joint Oireachtas Committee report. This Government is following through on its commitment in the Confidence and Supply Arrangement and is bringing forward the necessary legislation to reflect the outcome of the Oireachtas decision. This Bill offers clarity and certainty to the water services sector about how services will be funded in the future and how Irish Water will implement the Government’s objectives and priorities in this area. The Bill will also help to increase transparency and accountability in respect of Irish Water and its performance, and will facilitate greater civic and public engagement on the issue of water as a natural resource to be protected and a service vital to our economic and social progress.

Over the past year we have seen an extensive policy debate on how we fund domestic water services. Last July the Government enacted the Water Services (Amendment) Act 2016 to provide the political space for a calm, comprehensive and detailed debate on water services. In the same month an expert commission was established comprising international and national experts on water services, which dedicated five months to examining the various issues concerning the funding of domestic water services. Last November, the commission produced its report, which provided the basis for the work of the Joint Oireachtas Committee on the Future Funding of Domestic Water Services. The Oireachtas committee's deliberative process, comprising public meetings and detailed submissions from a range of public bodies and organisations, involved a welcome discussion on the many deficiencies in our public water and wastewater system, including: the reliance of 736,000 people on public water supplies in need of remedial action; the discharge of raw sewage directly into local waters in over 40 urban areas at the end of last year; and the loss through leakage of approximately 45% of all water produced. The debate also outlined evolving challenges that Irish Water faces, such as dealing with the presence of trihalomethanes, THMs, a potentially harmful by-product of the chlorination process, in public water supplies for about 400,000 people. It also underlined the need for sustained investment so that we can address these problems and provide a secure safe water supply and the appropriate level of wastewater treatment to protect public health, the economy and the environment.

A year of political and policy debate on water services also provided a further opportunity for Irish Water to outline the improvements it has made to our water and wastewater infrastructure during the first regulatory period. These included such projects as the national programme to reduce boil water notices, and by the end of 2016 Irish Water had removed long-term boil water notices that had been in place since January 2014 and that had affected more than 20,000 people. Further improvements included almost 860 km of pipeline replaced or repaired - to put this in context, this average of 286 km per year compares with an average of approximately 149 km per year during the final ten years of local authority responsibility for mains rehabilitation; 28 new or upgraded water treatment plants; more than 60 new or upgraded plants for wastewater treatment; and the daily saving of 89 million litres of water through the customer-focused First Fix repair scheme and related customer repairs, which amounts to the equivalent water needs of Galway city and county. These initiatives have all helped to improve people's daily lives, whether it be the quality of the water they drink, the ability to drink it without boiling it, or simply living in an area free of raw sewage discharge. Ultimately, we are having this funding debate because we are trying to improve people’s lives and their environment, to facilitate business and industry, and to enable social and economic progress. Irish Water is doing this and I want to acknowledge the progress it and the local authorities have made.

The deliberative process identified the problems, the progress and the need for funding certainty if we are to continue upgrading and modernising water services and infrastructure. In legislating for the Joint Oireachtas Committee's recommendations, we have devised a policy and funding framework through which the utility can implement national objectives and priorities within an economically regulated environment. This framework provides funding certainty from Government whilst maintaining a regulatory environment that demands efficiencies of Irish Water through the targets set by the Commission for Regulation of Utilities, formerly known as the Commission for Energy Regulation.

While the processes of the expert commission and the joint Oireachtas committee resulted in enhanced debate on water services, the Government recognises the need for greater public confidence in the work of Irish Water, as well as for further transparency about how it is funded and where that funding is invested. That is why we are providing for a water advisory body in order to give the Oireachtas and Government assessments on the performance of Irish Water in implementing its business plan. The Government also recognises the importance of the role of civic society in safeguarding water, be it for services to urban and rural areas or for water in the aquatic environment. For this reason, and in line with our commitment in the draft river basin management plan for 2018 to 2021, we are providing for a water forum. Through its advice, recommendations and observations I am confident that the forum will increase public support for water services investment; public awareness of and participation in increased water conservation and initiatives to protect water quality in our rivers, lakes and coastal waters; and national appreciation of the links between water and public health, economic progress and environmental protection. These key aims will advance if wider civic society debates and analyses these issues on an ongoing basis. Though the forum will advise the Minister of the day, it will also have an independent voice to communicate directly with wider society.

I will now outline the purpose and operation of each section of the Bill before us. Section 1 sets out the Short Title and provides that the various provisions of the Bill may be brought into operation on such day or days as may be appointed by order of the Minister. Section 2 sets out the definitions required to give effect to the provisions of all parts of the Bill. Section 3 is a standard provision enabling expenses incurred by the Minister in the administration of the Act to be paid out of moneys provided by the Oireachtas.

Section 4 provides that every order and regulation under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling such order or regulation is passed by either House within the next 21 days on which that House has sat after the order or regulation is laid before it, the order or regulation shall be annulled accordingly. Section 5 outlines the legislation and regulations that are repealed or revoked. Section 6 provides for the insertion of certain definitions into the Water Services Act 2007. Section 7 provides for the inclusion of the proposed water advisory body and the water forum in bodies that can be funded by the Minister.

Section 8 provides for the Commission for Regulation of Utilities, formerly known as the Commission for Energy Regulation, to carry out a review to assess the average consumption by customers of water services provided by Irish Water to dwellings, a review that shall be used by the Minister to set the threshold over which excessive usage payments may apply. The commission will also recommend to the Minister, based on consumption trends, the level of allowance to apply for usage by larger households where five or more people are ordinarily resident in a dwelling. The first such review will be carried out and completed within one month of the coming into operation of this section, with provision for future reviews prior to the expiration of the water charges plans.

Section 9 sets out the process for specifying the threshold amount and the allowance amount, following receipt by the Minister of the report from the commission. It specifies that the threshold amount shall be calculated by multiplying by 1.7 the amount assessed by the commission as the average rate of consumption of water services in a 12 month period. Allowances will be provided where the excessive use of water is caused by the size of the household or medical needs in the household. Provision is made that the multiplier of 1.7 may be reduced in time, but not within the first five years of the Act, and not without a positive resolution of the Oireachtas. Guidance is given in the Bill as to the factors that might be taken into account in such a change to the multiplier in the future, which are primarily based on promoting water conservation and sustainable use of resources, reflecting the objectives of the water framework directive.

Section 10 provides for the insertion of a provision into the Water Services Act 2007 to preclude Irish Water from charging a customer for water services provided by Irish Water to the customer’s dwelling where that customer does not consume water services in excess of the threshold amount. Section 11 inserts a provision into the Water Services Act 2007 for lrish Water to give notice to a customer where the threshold amount has been exceeded. A customer who continues to consume water in excess of the threshold amount after a period of six months following a notice from Irish Water will be liable to pay it for the provision of any water service that exceeds the threshold amount. The payment levels will be set by the commission having regard to the costs of Irish Water. This period of time will allow the customer to adust his or her consumption patterns or avail of the Irish Water first fix scheme where the usage is caused by a leak in the grounds of his or her dwelling.

Section 12 provides that a customer who receives a notice of the provision of water services exceeding the threshold amount can seek an allowance related to the size of his or her household to reduce or eliminate his or her liability. The allowance amount set will be multiplied by the number of persons above four in a dwelling.

Section 13 provides that a customer who receives a notice of the provision of water services exceeding the threshold amount can seek an exemption from payment where the usage arises from a medical need of a member of the household giving rise to an additional demand for water services.

Section 14 provides for an amendment to section 2 of the Water Services (No. 2) Act 2013 to insert definitions for "dwelling", "strategic funding plan", "threshold amount" and "water services policy statement".

Section 15 provides for the charging of customers of Irish Water for services that exceed the threshold amount for which a customer is liable to make a payment, services related to the connection of a dwelling to water services and the reading and testing of water meters when requested by a customer of Irish Water at the dwelling.

Section 16 provides that the Commission for Regulation of Utilities will have regard to a strategic funding plan prepared by Irish Water when considering a water charges plan submitted by Irish Water.

Section 17 provides that Irish Water will amend its code of practice to make additional provision for the making of complaints to Irish Water by persons about notices received related to the provision of water services exceeding the threshold amount and about refunds being made by Irish Water to customers who paid water charges.

Section 18 provides that the Minister shall prepare a water services policy statement before the expiration of the water charges plan. The statement will contain information on the policy objectives and priorities of the Government in the provision of water services in the State and will be laid before each House of the Oireachtas.

Section 19 provides for Irish Water to prepare and submit a strategic funding plan outlining the arrangements for implementation of the objectives of the water services strategic plan for the duration of the water charges plan being prepared by Irish Water. The strategic funding plan will include an estimate of the costs associated with the provision of water services for dwellings and the recovery of these costs; the costs associated with the provision of water services for premises other than dwellings and the recovery of these costs; the income of Irish Water and its operating and capital expenditure. The plan will be laid before each House of the Oireachtas and furnished to the commission.

Section 20 provides for grants to Irish Water, sanctioned by the Minister for Public Expenditure and Reform, towards the expenditure incurred by Irish Water in the provision of water services for a dwelling. Before deciding whether to make a grant, the Minister shall have regard to the water charges plan last approved by the Commission for Regulation of Utilities, the strategic funding plan last approved by the Minister, the refunds plan, the need to ensure the recovery of the cost of water services in line with the Water Framework Directive and the environmental objectives of the Water Framework Directive. The Joint Committee on the Future Funding of Domestic Water Services recommended that there be funding certainty and long-term stability for the water utility. The proposals contained in sections 18 to 20, inclusive, are in line with these recommendations.

Section 21 provides that no liability arises for Irish Water domestic customers in the period from 1 January 2015 to 30 June 2016, that is, the period prior to the suspension of domestic water charges, or to any related late payment charge.

Section 22 provides Irish Water with the power to make a refund payment to a customer who paid a charge for the provision by it of water services to a dwelling.

Section 23 strengthens the role of the commission in disputes between Irish Water and those seeking a connection to the public water or wastewater network.

Sections 24 to 32, inclusive, provide for the establishment of the Water Forum and set out the provisions relating to its membership, functions and operation.

Sections 33 to 41, inclusive, provide for the dissolution of the Public Water Forum and the National Rural Water Services Committee and set out the transitional arrangements in moving towards the establishment of the Water Forum.

Sections 42 to 53, inclusive, provide for the establishment of the Water Advisory Body and set out the provisions relating to its membership, functions and operation.

Part 8 gives effect to the changes in funding sources to and from the local government fund and the Central Fund arising from the report of the working group on the future funding model for Irish Water. The aim is to simplify the funding of local government and the changes which are on an Exchequer neutral basis have been designed to improve the transparency of the funding of Irish Water to ensure that, as recommended, it will be funded from general taxation. From 2018 onwards, all State funding to Irish Water for domestic water services will be channelled through my Department's Vote.

Section 54 provides for the Minister for Finance to pay into the local government fund the local property tax collected during the financial years 2014 to 2017, inclusive. Commencing in 2018, the Revenue Commissioners shall pay directly into the local government fund an amount equivalent to the local property tax received by them, including any interest or penalties.

Section 55 provides that the Minister for Transport, Tourism and Sport can issue directions on the collection of motor tax under sections 5(3) and 7(1)of the 1998 Act.

Section 56 amends section 4(6) of the Local Government Act 1998 to provide that from 1 January 2018 all motor tax collected by the Minister for Transport, Tourism and Sport shall be paid into the Central Fund.

Section 57 provides that from 1 January 2018 motor tax collected by local authorities shall be paid to the Minister for Transport, Tourism and Sport. It also clarifies that all motor tax collected up to 31 December 2017 shall continue to be paid into the local government fund.

Section 58 amends section 6 of the Local Government Act 1998 and provides for the deletion of subsections (1A), (2A), (2AB), (2B), (2CA) and (9). It also amends subsection (2C) to provide for a payment to the Exchequer in 2017.

Section 59 inserts the Minister for Transport, Tourism and Sport as the relevant Minister. It also adds a provision that any direction in force will remain in force.

Section 60 deals with consequential amendments to the water charges plan in force to give effect to the amendments made in the Bill.

Section 61 provides for Schedule 4 to the Valuation Act 2001 to be amended by the deletion of paragraph 21. This deletion will provide for the entire network used for the provision of water services by Irish Water or a person who holds a water services licence or land and buildings occupied by Irish Water or such a licence holder to be rateable.

Section 62 provides for the removal of the requirement provided for in section 70B(5) to register a domestic wastewater treatment system every five years. Associated subsections (6) and (7) are also deleted.

The Bill I have outlined to the House represents a comprehensive policy and funding framework to bring settlement and certainty to the funding of domestic water services. The framework should also improve transparency and accountability in respect of Irish Water, providing greater information for the Oireachtas and the public on the utility’s work. This transparency and information will be underpinned by stronger public and civic engagement on water issues through the new Water Forum.

The Bill provides for the retention of the incentive among households to conserve water and will help Ireland to meet the objectives of the Water Framework Directive and other water directives. To be clear, the aim is not to establish a new domestic funding stream for Irish Water. The objective is not to raise revenue for lrish Water through the excessive usage levy but to tackle the 8% of households which use 30% of our water. They are using this much water either because of leaks or because they are wilfully wasting it. We want to cut out both, not to get money for this waste. Again, it is not about new funding. If someone has additional people in his or her home, his or her allowance will be increased. If his or her water usage is excessive owing to medical needs, he or she will be exempt entirely.

The Bill provides a framework through which Irish Water and the water services sector can plan to deliver a modern, reliable public water and wastewater system. This is vital for families, communities, the economy and the environment. To some degree, the ongoing debate on the funding issues has diverted attention from the core challenge of fixing our weak water infrastructure. It is time to give certainty to the sector. The Bill reflects the outcome of serious consideration of the issues involved by the Oireachtas. It is time to implement the changes and support Irish Water in focusing on making the changes and investment required to build a modern public water and wastewater system, of which we can all be proud, building on the progress already made. I commend the Bill to the House.