Fewer than half of Irish Water customers have paid their bills in the first quarter of 2015, and yet Minister for the Environment Alan Kelly has said he is “very, very satisfied” with this remarkably low collection rate. The Minister is choosing to put a brave face on what is clearly a disappointing outcome, where less than half the revenue owed for water has been collected. A majority (56 per cent) have refused to pay the charge; a minority (44 per cent) have done so. For Irish Water, a new public utility, this is a far from ideal start.
Any new charge for a public service previously available free of charge is likely to face resistance and meet criticism – not least when it is proposed at a time of economic recession, and after years of tough austerity measures. The Government in setting up Irish Water was keenly aware – with a general election due before next April – that water charges were also a major political issue. The Coalition, no doubt concerned to minimise the political damage arising from the water charges controversy, took two initiatives to make the introduction of the charge more palatable. One was to make it easier for households to pay their water bills, and the second was to defer the full impact of the sanctions that applied for non-payment of bills until after the election.
The softly-softly strategy adopted by the Government, offering an annual water conservation grant of €100 to those householders who registered with Irish Water by the end of June, while ensuring the penalties for non-payment of water bills were applied later, seems counterproductive. The polls suggest that water charges remain a major political issue and a negative one for the Government, while the deferral of penalties on those who fail to pay their bills, may be seen as rewarding rather than punishing non-compliance with the law. Certainly, it is hard to see how the decision to offer the €100 water conservation grant to all households has encouraged greater payment of water bills by customers. Instead, it has produced a rather perverse outcome where, as Fianna Fáil leader Micheál Martin noted, some people may be “paid for not paying” their water bill. Irish Water, like Mr Kelly, has insisted that the revenue collected in its first three months of billing represents a “solid start”.
The company notes that in the UK, customers of well-established water utilities take on average three months to pay a water bill. And Irish Water claims that, although it has issued no follow-up reminders to its customers, its collection rate is in line with expectations for a new utility that is billing its customers for the first time. After three months, a harsh judgment on Irish Water may be premature, but receipts for its first quarter are nevertheless cause for concern – especially in the context of those who have paid their bills in compliance with the law of the land.