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Minister O’Brien publishes Policy Paper on future of Irish Water

The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD has today (23rd February 2021) published the policy paper “Irish Water – Towards a national, publicly-owned, regulated, water services utility” following its approval at Cabinet.

The Policy Paper sets out the Government’s views and expectations on the next steps in the transformation of the water sector that will lead to the retention of Irish Water as a national, publicly-owned, regulated, water services utility. Specifically, the Government’s expectations are that:

  • Irish Water will separate from the Ervia Group during 2023.
  • Irish Water will integrate the day to day operation and delivery of water services into its own organisational structure, in place of the current Service Level Agreements, on a phased basis.
  • In preparation for such integration of services under Irish Water, the engagement process taking place under the auspices of the Workplace Relations Commission (WRC) to identify a stable operational framework for the future delivery of water services should be concluded by July 2021.
  • The framework for the future delivery of water services will enable progress on the ongoing water sector transformation programme by:
    • Providing Irish Water with the necessary control of water services operations, and full accountability for same; the capacity to manage risk; and the capacity to communicate and negotiate with all water services workers on the change agenda;
    • Addressing the concerns of workers in relation to the future deployment of current local authority water services staff through collective agreement with the workers; and
    • Ensuring that Irish Water is not left without an appropriately skilled workforce to carry out its statutory functions.
  • Irish Water, working with local authorities and current water services workers, will implement a phased plan for the integration of water services into its organisational structure, with implementation to be concluded in 2022.
  • Environmental regulation will continue to be performed by the Environmental Protection Agency (EPA), and economic regulation by the CRU.
  • Water services provision will continue to be faithful to, and consistent with, the requirements set out in the EU Water Framework Directive (2000/60/EC), and otherwise comply with EU law in all respects.

Minister O’Brien described this as an important step forward in the Government’s drive to achieve a world class public water services system in Ireland, saying, “Ireland has a rich supply of water resources that are the envy of many countries. However, we have a way to go in ensuring our water and wastewater networks and our broader environmental management systems are fit for purpose.

“Irish Water, backed by record Government investment in water infrastructure, is well placed to develop the systems and services that Ireland needs to serve our citizens in the 21st century. To do that, however, requires the creation of a world class utility. Working together, Irish Water and local authorities, have made real improvements in implementing nationwide systems to improve our water services since 2014. Today’s policy paper is about building on that and taking it further.

“Today I am setting out the Government’s vision of how we want Irish Water to develop. We want Irish Water to become the workplace of choice for those local authority staff right across the country who are currently delivering water services on behalf of Irish Water. We acknowledge workers’ loyalty to their local authority and to their status as public service workers as well as their commitment to local service delivery. I am therefore asking that, through the aegis of the Workplace Relations Commission, management from Irish Water and the Local Government sector sit down with trade unions to develop a solution which allows us to move ahead with that world class public utility while respecting the concerns of local authority staff.

“I am also conscious of the enormous transformation involved for local government in future years. The Paper recognises this and I will work with the County and City Management Association to ensure that local authorities are not left with un-supported financial liabilities as a result of the transformation programme.

“I want to thank the existing workforce of Ervia and Irish Water for their contribution to date in the progress made in modernising our national water infrastructure and services; and acknowledge too the further transformational change involved for them as the Government moves ahead with the establishment of two separate companies – Gas Networks Ireland and Irish Water – to manage our national gas and water networks.

“The Government is determined to ensure that the views and concerns of key stakeholders must be considered and addressed within the transformation process. These stakeholders include the water services workers throughout the country, who through their dedication and commitment have developed the water services on which so many of us rely today, the local government sector, which is an intrinsic part of the public service and of local communities, ICTU, and its relevant affiliate unions, namely Fórsa, SIPTU, Connect and UNITE and, of course, Irish Water, its parent company Ervia and their staff. To all concerned I want to say that we as a Government firmly respect your positions and views and want to give you the strongest possible say in deciding your own future working arrangements.

“We now have the opportunity to move forward with the integration of our public water services within Irish Water’s organisation structure so that we have a single organisation that is tasked with developing, and fully equipped to deliver, a world class public water system of which Ireland and its citizens can be justifiably proud,” he concluded.

ENDS

Notes to Editor

  1. Background to Policy Paper

Our Shared Future, the Programme for Government, includes a commitment to “retain Irish Water in public ownership as a national, standalone, regulated utility”, with further commitments being given to ensuring that Irish Water is sufficiently funded to make the necessary investment in drinking water and wastewater infrastructure to serve citizens and customers and to support balanced regional development.

The realisation of this commitment will complete the broad policy and legislative reforms which have seen the public water system embark on a journey of transformation, from a structure based on locally-organised water services authorities, towards a single, national, water utility.

  1. Policy objective

The objective is to ensure that modern and effective arrangements are in place for the delivery of water services, that:

  • meet the needs and expectations of citizens and users,
  • comply with domestic and international legal obligations,
  • represent good value for money,
  • support the principles of social, economic and environmental sustainability, and
  • are retained in public ownership and control.

The Policy Paper clarifies the Government’s strategic position for stakeholders and for the wider public. It also sets out the parameters within which meaningful and purposeful engagement can take place with, and between, stakeholders on the future arrangements for the delivery of water services.

  1. Summary Overview of Policy Paper

The Policy Paper is comprised of five Parts:

Part 1 introduces the Policy Paper in the context of the water policy commitments given in the Programme for Government (PfG), centred on “retaining Irish Water in public ownership as a national, standalone regulated utility”, building on the ongoing water sector transformation programme initiated in 2012, and reaffirmed in the current Water Services Policy Statement 2018-2025.

Part 2 sets out the Government’s vision for the future of water services and describes the next steps seen by the Government as being essential to the delivery of this vision.

Part 3 focuses on the specific commitments set out in the PfG. A detailed examination is given of the key characteristics of Irish Water (i.e. publicly owned, national, standalone, regulated public water utility) as described in the PfG, thereby underlining their essential importance to the Government’s overall vision for Irish Water. 

Part 4 provides a comprehensive overview of the water sector transformation programme. Key features here include:

  • the rationale for the initial establishment of Irish Water,
  • the key reforms achieved to date,
  • the experience to date in operating the SLAs, including their benefits and limitations,
  • a focus on the important role played by the Workplace Relations Commission (WRC) in securing progress based on stakeholder consensus,
  • a focus on wider public policy considerations that have become relevant to engagement on the transformation programme, namely its impact on the local government system, and the question of public ownership of water services, including proposals for a referendum on this matter.

This overall analysis supports the assessment, accepted by Government, that the SLA arrangement is considered to have reached the limits of its potential to deliver on the objective of facilitating the changes necessary to transform the sector.

Part 5 concludes the paper. It affirms the Government’s determination to complete the transformation of the water services sector by delivering the integrated Public Water Services Utility through Irish Water.

  1. Current Context

Irish Water operates by delivering its services through local authorities by way of Service Level Agreements (SLAs). While this arrangement was important in establishing Irish Water as a national utility, its limitations have become clear. As discussed in the Policy Paper, the present arrangements are now impeding the further planning, development and improvement of water services. The Policy Paper also describes how risks are being introduced to the assured delivery of water and waste water services because of there is now a lack of connection between Irish Water’s legal responsibility for water services and their delivery by local authorities. Despite owning the water services assets and paying for service delivery through the SLAs, Irish Water does not have direct control over the majority of service staff or water infrastructural assets. This separation between responsibility and control needs to be addressed as a priority.

  1. Workplace Relations Commission

A process, facilitated by the Workplace Relations Commission (WRC), was initiated in 2018 with a view to bringing the current SLA arrangements to an end in 2021 (four years ahead of the statutory end date initially specified under the Water Services Acts).

This process will give rise to significant organisational change for local authorities and their staff. To this end the Workplace Relations Commission (WRC) has been tasked with facilitating engagement between all of the key stakeholder bodies, which include:

  • Irish Water / Ervia;
  • ICTU and relevant affiliated unions (Fórsa, SIPTU, Connect and UNITE); and,
  • The County and City Management Association / Local Government Management Agency (CCMA/LGMA).

This is a challenging and complex process and engagement has been slow over the past 2 years.

The Policy Paper sets out the Government views and expectations in relation to the ongoing transformation process. By clarifying its own strategic position for stakeholders and for the wider public, the Government has enabled stakeholders to make their contribution to shaping and influencing the future arrangements for the delivery of water services which will now take on a renewed focus and a new sense of priority in keeping with the Government’s strategic objectives.

  1. Additional Issues of Concerns

The Policy Paper identifies a number of issues that will be critical to engagement and dialogue with stakeholders.

  • Future Status of Water Sector Workers:

The identification of a stable operational framework for the delivery of water services to replace the SLAs must necessarily involve securing an agreement through WRC structures addressing the stated concerns of workers regarding their status as public sector workers, pay models and terms & conditions, etc. Water services workers currently comprise both local authority water services staff subject to the SLA arrangements, and a smaller number of staff directly employed by Irish Water. The Policy Paper notes that the WRC process currently underway presents an opportunity for addressing concerns of this nature by collective agreement.  Reassurances are given in relation to there being a job in Irish Water for all staff currently employed within the water sector, and in relation to the existing terms and conditions of staff being respected.

  • Time Frame:

The Government recognises that the nature and scale of the planned transformation will be challenging for stakeholders. For this reason it is important that stakeholders are given every opportunity to influence and shape, through dialogue and consultation, the detailed working arrangements to be put in place for the future delivery of water services. It is important that a reasonable time-frame is allowed where the potential for such engagement exists and is likely to bear fruit. On this basis the Policy Paper allows a six month period for engagement facilitated by the WRC to develop a Framework for the future delivery of Water Services. This will be followed by an implementation process whereby Irish Water, working with local authorities and current water services workers, would collaborate to implement the agreed Framework on a phased basis, with implementation to be concluded in 2022.

  • Policy Issues – Water Referendum & future sustainability of local government:

The Policy Paper also commits to engagement with ICTU and the relevant affiliated unions on these issues which they have identified as being of concern to their members. The Policy Paper, notes that these matters are ultimately determined through the political system, independently of any industrial relations matters affecting water services staff. It also asserts that the policy imperative of ensuring that modern and effective arrangements for the delivery of water services are in place must be addressed on its own merits and cannot become contingent on progress on wider public policy concerns. On this basis, the Government is happy for separate engagement to take place outside of WRC structures on those matters of concern raised by ICTU and the unions which are outside the scope of the WRC.

  1. Further information:

The full text of the Policy Paper is available here.

You can read our FAQ on Water Sector Transformation Policy Paper here.