Irish Water set to become a standalone, integrated utility

The Irish government has announced a series of moves designed to transform Irish Water into a national, standalone, regulated water services utility.

The moves were set out in a policy paper approved by the Cabinet that confirmed that Irish Water will separate from its operator, the Ervia Group, in 2023. They were published by the Department for Housing and Local government, which is responsible for the water sector.

Currently Ireland’s 31 local authorities help deliver water services in their area on an agency basis for Irish Water. Traditionally water services were a local government function.

Despite owning the assets and paying for service delivery through service level agreements (SLAs) Irish Water currently does not have direct control over the majority of service staff or assets. However, it is responsible and accountable for the delivery of public water and wastewater services nationwide. This, according to the policy paper, was a “fundamental disconnect between service responsibility and operational control." The paper said it "represents a systemic risk to the effective management of water services”.

This cumbersome arrangement is now set to end. 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, some three years earlier than once anticipated, and the 3,200 local authority staff involved in water services will be integrated into Irish Water.

Discussions on the staff transfer between all the parties involved, including the unions, have begun under the aegis of the independent Workplace Relations Commission, and are set to be concluded within six months.

Irish Water’s operating costs under the SLA-based model are currently some €532 million a year.

The Commission for Regulation of Utilities has acknowledged that its efficiency targets for Irish Water within the 2020-24 Revenue Control period are linked to the transition from the SLA-based service delivery model to the integrated delivery of services by staff working in Irish Water.

Ministers accept that managing the transition while ensuring that local authorities are not left with stranded costs will be difficult. The country’s largest trade union, Siptu, has told the government that its members working in local authorities will not be forced to move to Irish Water and the issue could lead to industrial action.

However, the paper highlighted the government’s “strong commitment” to the public ownership of water services and reiterates that it “sees no circumstances arising where any part of Irish Water would be placed in private ownership”.