Belfast Telegraph

Water rates the answer, says man whose 2007 report warned of ticking time bomb

By Adrian Rutherford

The man who led a review into Northern Ireland's water services has questioned why its key recommendations were never acted on.

In 2007 Professor Paddy Hillyard produced a report that concluded a separate water charge within the rates should be introduced.

However, for the last eight years his work has sat gathering dust.

Prof Hillyard, an academic at Queen's University, said it was obvious in 2007 that NI Water was heading for problems. "I feel it was a mistake not to have acted on this report - absolutely," he told the Belfast Telegraph.

Prof Hillyard believes that without proper investment - funded by the new water rates - NI Water's problems will worsen in the future.

"We are building up huge, huge problems," he added.

The main parties, except Alliance, are opposed to water charges.

Prof Hillyard's comments come in the wake of an industrial dispute by NI Water workers that left 9,000 homes without supply at one stage.

The problems were concentrated west of the Bann, where the decades-old infrastructure needs modernisation.

Prof Hillyard was chair of the Independent Water Review Panel, which was set up by the Assembly in 2007 after direct rule ministers advised that water services should be privatised.

He has warned against privatisation, citing problems in England, notably at Thames Water.

The panel's report also concluded that a proposal for a separate water charge should be abandoned.

Instead, it said water charges could be collected by the Rates Collection Agency as part of the normal rates bill. According to NI Water's most recent annual report, it receives an annual subsidy from the public purse of £277m. Non-cash costs such as depreciation add up to £166m.

It means the current cost of NI Water is running at £443m - £640 for every household in Northern Ireland. Added to that are Treasury rules on borrowing public money, which means money is borrowed at a higher rate than an independent company, meaning we are paying more for the interest on capital.

Prof Hillyard added: "All of those things mean that the simplest thing to do is to set up a municipal company for which we all have a commitment - we know it's ours, it can't be sold.

"It would have a pay structure which is more even. The chief executive, for example, should not earn more than four times the average wage."

Prof Hillyard believes charges would allow for essential modernisation of our outdated water system, while freeing up money for other areas such as health.

"I just think that people in Northern Ireland have been short-changed," he added.

"We see the crisis in our hospitals and the only way to deal with that is with more money and greater efficiencies.

"At the same time we have very few ways to raise money, and one of the ways we could raise money is through water charges.

"That would not only improve our water network but also release money for greater investment in our hospitals.

"We wouldn't be giving a £270-odd million subsidy to NI Water."

He admits it is a hard sell, especially after the bungled attempts to introduce water charges in the Republic.

The Irish Government revised its proposals in November following months of unrest and protests.

Most of Northern Ireland's main parties also remain stubbornly opposed to water charges.

DUP MLA Trevor Clarke said: "The lack of proper shift patterns and a high reliance on overtime within the company do not justify the introduction of water charges."

Sinn Fein MLA Chris Hazzard said: "Water charging is a regressive form of taxation that would have placed many households in the North under additional pressures. People already pay for their water through their rates and any double taxation proposals are totally unjust."

An SDLP spokesman said the party was "fundamentally opposed" to water charges.

The UUP said: "We should be talking about investing in infrastructure, not charging people for water."

However, Alliance MLA Chris Lyttle said it was time political parties were honest with the public.

"In addition to the £750m investment needed, the Executive already subsidises the cost of water services by £250m per year which is lost to other important public expenditure," he said.

"Alliance believes that we must be open and honest about the need for serious consideration of the introduction of fair domestic water pricing based on the ability to pay if we are to meet the demands on this and other vital public services."

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