Séamus Kirk (Louth, Fianna Fail)
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572. To ask the Minister for Environment, Community and Local Government if he will confirm if 5% of car tax and 2% of VAT goes towards water production; if he will confirm that Irish Water is a limited private company; and the percentage of local property tax that is spent on water production. [40177/14]

Alan Kelly (Tipperary North, Labour)
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Irish Water's costs in the coming years will be funded through a mix of revenue from the domestic and non-domestic sector, third party finance (including bank lending and capital markets facilities) and State support which may be in the form of both equity and subvention. In order to provide for free allowances and give greater visibility on the expected level of water charges, the Government have decided to provide the following subvention to Irish Water in 2015 and 2016:

- An average subvention of €537m in each of the two years, and

- Provision of just over €400m in 2015 and 2016 to support increased investment in public water services, including the provision of a “first fix scheme” by Irish Water.

This funding package for 2015 and 2016 builds on the Exchequer funding being provided to Irish Water in 2014, which includes €239m that will be used to primarily fund the core capital expenditure programme of Irish Water. In addition, Irish Water will receive a subvention of some € 440 million from the Local Government Fund in 2014, which will fund water- related expenditures incurred heretofore by local authorities and which would, historically, have been met by local authorities from their own resources, non-domestic water charge revenues and general purpose grants from the Fund. It is anticipated that Irish Water will finance other costs from non-domestic water charge revenues of some €190m and from borrowing, which will be the subject of appropriate Ministerial consents in due course. The local government funding model has changed considerably in 2014 and, in particular, the establishment of Irish Water and its financial relationship with the local government sector has a considerable impact on local authority financing. The Revised Estimates Volume for Public Services 2014 estimates total expenditure from the Local Government Fund of €1.779 billion in 2014, with income from, primarily, estimated Local Property Tax proceeds of €550m and revenue from motor tax of €1.16 billion.

The Water Services Act 2013 provided for the establishment of Irish Water as an independent subsidiary within the Bord Gáis Éireann Group, to be formed and registered under the Companies Acts. Section 5 of the Act provides that the shareholders of Irish Water are Ervia (formerly Bord Gáis Éireann), the Minister for the Environment, Community and Local Government and the Minister for Finance. Section 46 of the Water Services (No. 2) Act 2013 prohibits the shareholders from disposing of their shareholding in Irish Water, which in effect places a statutory prohibition on the privatisation of Irish Water.