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.”

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  • Great to see ministers continuing the tradition of their predecessors in 1998-2003 by refusing to take any responsibility for anything or make any decisions.

  • And aren’t our Assembly Members so high calibre and able in the way the prize concessions from Ministers using Question Time… not.

  • There’s a big sign outside the Sinn Féin Centre on the Antrim Road saying “SMASH Water Charges”. Is this now going to be amended to say “Appoint a committee to take the blame when we don’t SMASH water charges”?

  • Yokel

    You mean distinct water charges are coming?

    But they all said….

    Sammy they couldnt quite smash the H-Blocks either, though they manage to get it emptied.

  • observer

    Pete, I know it is somewhat off-theme, but during Question Time First Minister Paisley found a novel way of claiming for the NI Assembly the powers associated with Parliamentary Sovereignty – “this House is Pope”.

    I think even those of us who have a high regard for the British parliamentary tradition will be sceptical of claiming infallibility for our Assembly …

    Then again, perhaps it was evidence of the DUP’s new-found commitment to a shared future: “This House is Sovereign [language for unionists and protestants]. This House is Pope [language for nationalists and catholics]”.

  • curious

    [i]’Sammy they couldnt quite smash the H-Blocks either, though they manage to get it emptied.'[/i]

    yokel, they could have empied the H-Blocks many years earlier if they wanted. All was needed was to stop planting bombs to murder innocent citizens of Northern Ireland over a period of 30 years.

  • Comrade Stalin

    I was hoping the Slugger Shinners might be able to comment on the inability of the Minister to make decisions himself.

    Water charges are unpopular; SF and the DUP went into the election saying that they should be scrapped; so what’s the need for a committee ?

  • No wonder this place has such effed up politics. This is actually the biggest political story since the reinstatement of devolution; water charges were the issue on the doorstep in the elections; the Shinners have particularly big noises about them, to the extent of Mitchel McLaughlin encouraging postal workers to break the law by not delivering water bills.

    And they’ve backed down totally.

    And Slugger posters can’t get off the topic of the Hunger Strike; the only relevance the Hunger Strike has to this is if you want to ask “Did Bobby Sands die so Conor Murphy could fail to abolish water charges as Minister for Regional Development?”

  • Comrade Stalin

    Sammy,

    I think the big thing is going to be whether our media ask the right questions, although Gerry Adams might suggest that they’re “stupid”, and Jim Gibney will probably be a long in a little while to say that those who point out the glaring inconsistencies between pre- and post-election positions on water charges are elements opposed to the peace process who are trying to discredit the Executive.

  • Insider

    Boys & Girls – this review is actually pretty good as far as these things go.

    In fantasy land the big shinners could just scrap them with the wave of a wand but in the real world this looks like a fairly credible way to go – and I suspect is the only way that Murphy could have gone forward in order to scrap the water charges.

  • Newton Emerson

    I agree, the terms of this review could actually come up with acceptable alternatives and Murphy is harldy ducking the issue when he’ll still have to take final decision on its report. The focus on the Welsh model is particularly interesting.

  • In fantasy land the big shinners could just scrap them with the wave of a wand

    Well, the big Shinners and the 80 non-Shinner members of the Assembly, every single one of whom fought the election on a pledge to scrap water charges, could have scrapped them with the wave of a wand and a few judicious reallocations of money. Or, indeed, according to the Shinners and DUP they had all of this sorted with their mate Peter Permatan and there wouldn’t even be any need to reallocate money. It was all sorted.

    Sure weren’t water charges were only even brought up as a way of getting the Shinners and DUP to make a deal? Surely, they were put there to be scrapped as the first significant decision of a new power-sharing administration, in an unmistakable lesson on the merits of co-operation and harmony to the people of Northern Ireland? A 108-0 vote that symbolised our new common future? Wasn’t all this a demonstration of the political genius of Peter Permatan?

    And now it turns out the Shinners and the DUP were sold a pup by the NIO all along. Whoops. And is this review actually pretty good as far as these things go? We only have the word of an ‘insider’ for that. I’ve been an ‘insider’ too, and I loved nothing more than nice pliable Ministers who did whatever we suggested and never caused us any more trouble than was absolutely necessary.

    And as for Newton’s comments, surely you know that a review is a classic blame distribution and avoidance strategy for politicians? Yes, he’ll have to take the final decision on the report, but as long as he more or less agrees with them or, better yet, agrees with them with a few minor populist sops, he doesn’t have to accept the blame, even if some of it is thrown his way. It goes like this:

    “Well, Stephen Nolan”, says Conor in about 20 months time, “we thought we could scrap water charges but actually our committee of experts made it clear that it wasn’t possible… No, no, I think it’s very important to bring experts into the discussion, they’re the experts… Are you saying the experts are wrong? Well, Stephen, it’s alright for people like you to irresponsibly suggest that water charges can be scrapped but the experts have looked at this and…”

    You get the idea. And you two are implying that I’m the naive one?

  • Newton Emerson

    Point taken, however surely Murphy knows that this would just take him back to square one i.e. facing a non-payment campaign. It’s the threat of mass non-payment, rather than a voter rebellion, that has forced the assembly to look at other options. The Shinners have been trailing the idea of ending “double payment” for some time now, which I think means they’d like to sell a separate charge with a discount on the rates – but that won’t be enough on its own and the terms of the review seem to accept as much.

  • Point taken, however surely Murphy knows that this would just take him back to square one i.e. facing a non-payment campaign.

    Talking is one thing, but how many will still not pay once a few get sent to jail? It might not be popular, but I’m sure the Executive could convince themselves it’s necessary.

    In any case, I’m sure that’s not where Murphy sees this thing heading. If I were him, I’d be thinking, “agree with the experts, let them take the flack, disagree on a few populist points to get positive headlines and claim a victory, a few Socialist Workers don’t pay so what?”

    And if that’s not what he’s thinking, I’m sure that’s what his civil servants are thinking. If they’re any good.

    It’s the threat of mass non-payment, rather than a voter rebellion, that has forced the assembly to look at other options.

    I’m not sure it’s either of those; they all promised the electorate they’d sort this; they all thought they’d got Peter Hain to sort it; he didn’t and now they’re all sort of looking at each other, thinking “oh, shit”. The review has NICS stamped all over it, I doubt that came from Murphy directly.

  • charlieo

    What the shinners say is not what they mean. Remember the word games the shinners play
    They probaly need more cash to pay their ministeral drivers.

    You can alwas vote Mr Murphy out next election.

    SMASH WATER CHARGES OR VOTE SINN FEIN OUT

  • Newton Emerson

    Your argument is horribly plausible but I’m going to wait until the Autumn and see what they come up with before writing this off.

  • Newton Emerson

    Last post for Sammy!

  • I wonder…

    WELL, the waer charge could be scrapped tomorrow but where will be money come from then to fund the infrastructural improvment that everyone (including the “experts”) will agree is required?

    BTW, the panel of experts who toured NI in spring 2003 as part of the public consultation of water and sewerage services are presumably all to be excluded? That means a leading local economist and chair of Scottish Water will not be asked for their views. Oh well, why would we ask them any how? Nor can we ask the ex Chair of OFWAT for his views, as he was another “expert” previously employed by DRD. But sure, what would he know? 😉

    If it isnt to be additional money, then itll come from some other Department or funding: education? health? The Administration has hard choices to make. I think most will pay some charge, if its reasonable and the poor are protected.

  • To be honest, this sounds like an eminently sensible proposal from the Shinners who have hardly covered themselves in glory on the Water Charges issue. There was a discussion on this previously on our site:

    “According to the Department of Regional Development, £3 billion sterling is needed for water and sewerage in the North until 2023. While the Executive can choose to abolish water charges once it is up and running, it either has to find this money somewhere else, and Gordon Brown is putting on the poor mouth, or demonstrate that the Department’s figures are wrong.

    It’s also worth noting that, much like the Bin Charges in the South, if the Assembly chooses not to make water ’self-financing’ then they will lose the grants from the British Treasury for capital investment in the water services.”

    So the money has to come from somewhere. This doesn’t necessarily have to be through a double tax, but since the Executive does not have tax raising powers, an examination of the best way to raise the money, which eliminates privatisation even as something to be considered, seems a sensible step.

    I’m a bit confused as to how people think this kind of thing works. I know Northern politics is a bit of a vacuum when it comes to economic thinking, but either they find the money somewhere or they show the money is not needed.

  • Pete Baker

    I’ve updated the post to note the statement by SF MLA Raymond McCartney

    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.”

  • I’m a bit confused as to how people think this kind of thing works.

    I thought the Shinners and DUP secured the money as part of their Deal of the Century with Peter Hain and the Treasury.

    Silly me! The Brits made eejits of them instead.

  • I Wonder

    Its rather difficult to see when the Executive could secure genuinely additional funding for NI if it isn’t NOW – at the outset of their administration.

    Or…could Gordon instruct his replacement at No 11 to “find the money”?

  • I think it’s very important here to put some perspective on Water Charges in general. The so-called “campaign” against water charges has been very much a media-led campaign.

    The general level of proposed charges (on average) was very low for the first 2 years due to the phasing-in process.

    I have a good friend who is a senior manager with Echo/Crystal Alliance who won the contract to oversee the administration of Water Charges here. He has told me frequently that there has been absolutely minimal contact from the vast majority of customers about the proposed charges. (even after the hundreds of thousands of estimated bills were issued earlier this year).

    Peter Hain initially made this into a political football which could be used by all parties as a way of cementing some form of camaraderie in the run up to the recent all-party agreement. The parties were all prepared to run with it and the media used it as an instrument to force local politicians into dealing with ‘normal’ day-to-day issues.

    The problem is though, that the pure facts do not support the so-called ‘outrage’ at these proposed charges. There simply is no mass rebellion amomg the wider public about these charges. Yes, it’s an extra bill, but most people are seemingly happy enough to pay it.

    Perspective and factual evidence have been totally lost in relation to this issue. Water Charges (in some format) simply have to be introduced and most people will happily pay them.

  • Shore Road Resident

    Put down Conor’s bag, bag-boy.

  • willowfield

    I think you’re right, macswiney. Most people know that they really can’t expect to receive subsidised water.