Irish Water says it will achieve exchequer savings of €2bn by 2021

Irish Water has said it will achieve savings of €2 billion over the next seven years.

The utility was responding to claims by Prof John FitzGerald of the Economic and Social Research Institute that overstaffing at Irish Water would cost up to €2 billion.

Prof FitzGerald said at the weekend that the company required about 1,700 staff but would have more than 4,300 because it is taking on all the water services personnel from the 34 local authorities, each of which has run its own scheme.

All other problems faced by the new utility “paled into insignificance”, said Prof FitzGerald, when compared with the overstaffing problem.

The company responded yesterday by saying the number of staff would reduce over a period of time, through retirement, or else by voluntary redundancy schemes that it may introduce. It pointed out that a significant proportion of the 4,300 employees were aged above 50.

It also pointed to a similar experience in Scottish Water, which took over the running of water services in Scotland from a large number of utilities. Its number of personnel had fallen from over 5,000 to 3,500 over a period of a decade.

Irish Water said in a statement that given the age profile of the employees, there would be substantial natural “attrition” in the coming years.

The company reiterated its claim that the establishment of a single water company would save the exchequer €2 billion between now and 2021.

When asked for details of how this would be achieved, it said savings of €1.1 billion would be achieved in the period between 2015 and 2021 through capital expenditure efficiencies of €500 million and operating expenditure efficiencies of €600 million.

“The combination of these total efficiencies of €1.1 billion, along with other factors such as the increased income resulting from the introduction of domestic water charges, will result in the projected reduction of €2 billion in government exchequer funding of the water industry,” a spokeswoman said.