Water charges were doomed from the start by bad policy Galway study finds

Galway Daily news NUI Galway report finds water charges were doomed by poor policy from day one

A new report on public policy making by NUI Galway researchers has said that water charges were poorly conceived, terribly implemented, and ignored expert recommendations.

NUIG’s Whitaker Institute is holding a conference this week on ‘How (Not) To Do Public Policy’ with a report that looks at the abject failure of the water charges, and the success of the  Local Property Tax.

The report used exclusive access to senior policymakers and independent research to examine what decisions led to the success and failure of these policies, and how to avoid repeating the latter.

The general gist of how water charges failed, the report finds, is that the government was trying to achieve too much too quickly, and in doing so completely failed in getting the public onside.

The goal of reforming the water sector and introducing household charges was to create a water utility that was able to independently borrow funds.

This was meant to finance a massive programme of investment in water infrastructure.

Jim O’Leary, Economist and Chief author by of the report said, “A sense of trying to achieve too much too soon is suggested by the approach to the overall water sector reform programme.”

“All in all, in examining policy on water, our reading of the evidence is that it was driven by a vision that would have been more appropriate for a 7–10-year timeframe than a 3–5-year period.”

In order to borrow money on its own, Irish Water first had to become classified as an agency outside of the government sector, the ‘Eurostat test’.

This was never going to be popular, since one of the things that made Eurostat call it a government controlled agency in 2015 was the capping of household fees for water.

“Passing the so-called ‘Eurostat test’ was a treacherous basis for policy,” said Mr O’Leary.

Certain decisions were made before anyone had considered the implications of them, the report found.

Things like universal metering and the universal free allowance that never had alternatives rigorously assessed.

Jim O’Leary points to the Commission of Taxation’s proposals on water charges in 2009, which were ignored by the government who went on to do much the opposite of what it recommended.

Beyond just bad policy decisions, there was a complete disconnect between how the policy was designed, and how water charges were implemented, creating more chaos.

In the end, it was a failure to win hearts and minds that killed the policy, Mr O’Leary said.

And indeed water charges were met with massive public outcry, protests, and a campaign of non-payment by people around the country.

In contrast, the Local Property Tax succeeded as a matter of policy because there was some awareness of the difficulties that might occur in implementing them.

A key decision was giving the power to collect them to Revenue Commissioners rather than the Local Authority, who would have been more reluctant to enforce a potentially unpopular local tax.