Phase 1 Case Study: Irish Water Charges
- Foilsithe:
- An t-eolas is déanaí:
- Demand for water charges
- Irish water charges through the lens of the Three-Pillar Framework
- Lessons learned
Demand for water charges
The demand for water charges came from our government, partly as a means of conserving a scarce natural resource, partly as a means of funding investment in that resource, and partly in response to requests from the Troika of institutions on which Ireland, during that period, depending on for funding. The Troika includes the European Commission, European Central Bank and International Monetary Fund.
Irish water charges through the lens of the Three-Pillar Framework
Irish water charges may be popularly understood as failing under the legitimacy pillar of the three-pillar framework. It provoked widespread public dissatisfaction. On deeper analysis, we can see that many of the issues that afflicted it were partly caused by not adequately analysing the initial policy demand and not foreseeing the likely tensions.
Irish Water strove to pass a test called the Market Corporation Test (MCT). If it passed, it would enable Irish Water to be placed outside the Irish Government. It could then borrow on the strength of its own balance sheet. It was thought that this would enable a level of investment so it could upgrade the water infrastructure. To pass this test, private customers would need to account for more than 50% of total sales. However, it was exceedingly difficult to reconcile this target with the plan to give allowances and grants to customers.
Later analysis of this policy concluded:
"you can set out to pass the MCT or you can have free allowances, but you cannot have both… neither of these elements of policy were subjected to rigorous evaluation before being adopted. In the case of passing the MCT, it was embraced as a policy goal from the outset, but there is no evidence to indicate that this followed a formal discussion informed by a thorough assessment of what consequences might flow for other aspects of policy." (6)
(6) Jim O’Leary (2018) How (Not) to do Public Policy: Water Charges and the Local Property Tax. Whitaker Institute. NUIG. Pg. 75. Available at https://whitakerinstitute.ie/wp-content/uploads/2014/02/NUIG-Whitaker-Report-Water-Charges-LPT-Final.pdf
In addition, the question of an allowance, was a ‘given, pre-determined in the political domain’ with no evidence that ‘this was done on the basis of an evaluation of other options or a proper understanding of the implications. (7)
(7) Ibid, pg. 75-76.
The policy demands of MCT and allowances were not analysed as fully as they should have been and the initial policy demand was not filtered appropriately. This meant that we did not appreciate the scale, cost, or public opposition associated with the proposed regime change.
Lessons learned
The above case study shows that we must question the demands for policy, irrespective of their source.
As the demand for water charges came not just from the government but from EU bodies on which Ireland was dependent for funding, this made it a difficult call to proceed or not. However, in the end, we did not have the data, evidence, capacity, or public support to implement water charges as originally envisaged.
If we don’t critically assess the policy demand, we run the risk of pursuing policies that will be either ineffective or never happen. Even if filtering initial demands identifies a positive policy demand, we still need to work through the other 4 Ds of policy development to make sure that high-quality policies can emerge.