Review of water charges passed to independent panel

The Minister for Regional Development, Conor Murphy, is to pass responsibility for the review of water and sewerage services to an independent panel, membership to be announced later. There is to be a particular focus on the costs involved and how those costs will be funded. Under the terms of the review, however, one possible mechanism, privatisation, has already been ruled out. There are also existing contracts to consider. And in the footnotes we find out what the Minister has instructed his civil servants to refer to the Republic of Ireland as.. Updated below the foldFrom the statement

The Review will comprise two distinct strands:

1. Cost of water and Sewerage services and how these will be funded. This strand will be undertaken by the Independent review panel and report to the Minister for Regional Development, Executive sub-committee and the Executive.

2. Management, Governance and delivery of high quality water and sewerage services within a public ownership model. This strand will also be undertaken by the independent review panel reporting to the Minister for Regional Development, Executive Sub-Committee and the Executive.

It has been agreed by the Executive that this review will be short and focused. The Minister for Regional Development will report back to the Executive as follows;

Strand 1: Final Report in Autumn 2007; and

Strand 2: Final report in December 2007, (interim report in Autumn 2007).

On Strand 1

Strand 1: Cost of Water and Sewerage Services and how these will be funded

Scope

There is a need to address the funding of water and sewerage services in the shorter term and therefore this strand of the review must report by Autumn 2007 to advise the funding decisions by the Assembly and the Executive.

The review will address the following questions;

what the real cost of providing water and sewerage services is;
and how these costs should be met.

In particular, two key aspects of public concern and interest must be considered;

Paying twice: – the review needs to ascertain how much people already contribute through the regional rate as a starting point as the public should not be expected to pay twice for this service.

Under-investment: – the review must establish the costs of rectifying the legacy of under investment that has occurred and to make the case for securing a contribution towards past underinvestment.

(The review will take into consideration the DFP Rating Review)

And on Strand 2

Strand 2: management, Governance and delivery of high quality water and sewerage services within a public-ownership model.

Scope

This review will be conducted by the fully independent review panel and serviced by an independent secretariat. The review panel will be tasked with identifying the level of funding needed and set out options to examine the most appropriate way of managing, governing and delivering our water and sewerage services within full public-ownership. It will make recommendations on the way forward.

This review will examine the following:

1. Legislation, license, articles of association and governance letter

Do these arrangements sufficiently support and meet the needs of a publicy-owned business model? What amendments or additions would be recommended?

2. Governance

Are the governance arrangements suitable and appropriate? Do the arrangements sufficiently take account of and support the restoration of the new Assembly and the decision to keep in public ownership?

3. Investment Programme

The Panel will review the scale, structure and phasing of investment planned to meet requirements. The Panel will also assess whether current arrangements are sufficient for identifying the appropriate level of funding needed over the next 20 years to meet our requirements and that of EU legislation. The Panel will also identify what element of funding need relates to legacy costs due to past underinvestment or maintenance needs, and what element are future development costs.

4. Business Model

Is the Go-Co, including arrangements with third parties, the best and most appropriate model to meet the purposes as defined above and within public ownership? What option or options would be best to consider and/or implement e.g. Scottish and Welsh business model

5. Strategic Business plan and financial Model (SoS/HMT)

Is the business and financial model appropriate for a public ownership water and sewerage service? Is the policy for example on dividend, cost of capital, etc appropriate and in the best interest of the public as the main shareholder? Does the efficiency model ensure value for money at minimum cost?

And what those instructions were? Well, from the notes on the membership of the review panel, it would seem that the Republic of Ireland is to be referred to as the “South of Ireland”..

Membership

It is essential that the review panel is independent to reflect the open and transparent approach to establish the best way forward. The review panel will consist of a chairperson and two members and should as far as possible collectively reflect the following elements;

Independence
Expertise and knowledge drawn locally and further a field e.g. England, Scotland, Wales, South of Ireland, etc.
Public Administration
Regulatory and operational/management experience in water and other utilities
Economic and academic experience and expertise
Public and Consumer interest

Update SF MLA Raymond McCartney has welcomed the review..

“Sinn Féin is committed to scrapping the water charges and I am happy that this review will be wide ranging and can provide alternatives to the water charges imposed by the British Government that has been put off for a year.”