PAY HIKES AT IRISH WATER

Fresh bonanza for utility’s staff as Cabinet wrestles with refunding taxpayers who paid water bills

IRISH Water workers have enjoyed two years of pay rises and are now set for a scheme of performance-related pay boosts that will take effect from January.

The revelation comes as ministers argue over whether or not they will be refunding taxpayers who paid their water charges if water ends up being funded out of general taxation, as was recommended this week by the Water Commission report.

The internal debate has reached the stage where the Government is investigating the possibility of refunding those who paid their water charges by means of a tax credit, the Irish Mail on Sunday has learned. It is among a number of options that will be considered by Cabinet as the Fine Gael-led Government has come to accept that those who paid their water bills will have to be given their money back.

Revelations of a highly embarrassing U-turn come as we reveal that Irish Water employees received average pay hikes of €4,000 over the past two years under a bonus scheme.

‘It has enabled Ervia to attract and retain staff’

The non-pensionable temporary increment payments to 662 employees were paid as a result of a recommendation from the Labour Relations Commission to resolve a dispute between Irish Water parent company Ervia and its Group of Unions. Payments to individual employees averaged €2,000 per annum. The additional payroll cost to the company was €4m over the three-year period for the super quango’s 600 workers.

From next year, the pay rises will be even larger, with staff eligible to earn between 2.75% and 19% plus of basic salary if they achieve specific targets.

The Labour Court ruled last year that a performance-related pay model would be applied to Irish Water staff from January 2017.

But in the meantime, an arrangement would be put in place whereby Irish Water employees were paid annual increments until the end of 2016. These payments range from 1.5% for some 200 workers earning between €23,800 and €47,700 per year and a higher rate of 3% for 400 workers on higher salaries.

The most recent figures show that 29 staff earn more than €100,000 and are in line for an annual payment of €3,000 or more.

Despite these payments, Irish Water continued to insist this week that there was no bonus culture in the organisation.

‘There are no bonuses in Irish Water,’ said a spokeswoman. ‘A new pay structure was agreed and implemented in Ervia in 2013, which involved moving from a traditional increment-based pay model that rewarded length of service to a model that rewarded performance.

‘These rewards are based on robust performance management and it encourages a high performance culture. It has enabled Ervia to attract and retain specialised skilled staff in a competitive market.’

The bonus culture at Irish Water provoked fury when it emerged in 2014 that staff could receive topups of up to 10% of their salaries, even if their performance was classified as needing improvement.

A Joint Oireachtas Committee will open its deliberations on the future of the water regime this week.

It comes in the wake of a Government-commissioned report which says that some form of payment over a low usage should come into force. Water charges are suspended until next April.

However, Environment Minister Simon Coveney has firmly maintained that bills must be paid.

Our sister newspaper, the Irish Daily Mail, revealed yesterday that even his deputy at the department thinks that this is not feasible and that those who have paid will have to be reimbursed.

‘We will have no other option,’ said Damien English. ‘If you don’t have equity on this issue you will not have credibility if you go to the taxpayers with any kind of funding model. If we cannot find a credible way to collect this money, then we’ll have no option but to refund it.’

Taoiseach Enda Kenny has also refused to concede that there will be a reimbursement to those who have paid. There was a stormy meeting of the Fine Gael parliamentary party last Wednesday where members expressed their view that rather than pursue the public for unpaid bills the Government should just pay back those who have paid. It is believed this will cost the State about €160m.

A cabinet minister told the Daily Mail that this money could not be just handed back. But ministers accept that after the committee finishes its deliberations in the spring the Government will have to start handing the money back.

‘We have said consistently that people who paid won’t be worse off. So what does that mean?’ asked a cabinet minister asked rhetorically last night. ‘The option we are look-

‘People who have paid will not be worse off’

ing at is that you give the money back. How do you do it?

‘You could in theory just give everybody a cheque in the post and I think it could be about €160m. You’re not allowed just hand it back immediately because of the European fiscal rules that govern our spending,’ said the minister.

‘And I don’t see how you can do that and still have all the money you need to do the other things.

‘We could do it by some kind of tax credit and we will be discussing that option at Cabinet.

‘There are ways of doing it. There is a majority of people in the parliamentary party who are in favour of some gesture to those who paid. But those people aren’t the people who have to figure out where the money is going to come from.’

The minister sympathises with Finance Minister Michael Noonan and Enda Kenny as they will have to come up with a method of doing this without upsetting the national finances.

‘In fairness to Noonan, he is in a very difficult position because he is the one who has to find it,’ said the minister. ‘The extra spending in the Budget was roughly €600m.

‘Imagine you were to knock €160m off that, what would you not be doing? The cost of paying the gardaí is €50m, the cost of the Lansdowne Road agreement is €290m. And it’s a fair amount of USC cuts.’

There are other less popular options being looked at.

‘You pursue those who did not pay. Number two option is you could attach it to the property when you sell the house.’

The Government believes that the deliberations of the Oireachtas committee will be finished in March, with a recommendation coming forward before an important deadline – April 2017. At that point, the suspension of water charges will have expired.

However, Fianna Fáil plans to allow the committee’s work to go on as long as possible.

‘We will do this right, so we will get our guidance from this committee. That means calling in as many experts as we like and looking at all the facts,’ said a Fianna Fáil TD.

‘If it goes into the summer, then so be it.’

However this is interpreted by Fine Gael as an effort to further damaged Simon Coveney politically. He will be forced to lengthen the period of water charges payment suspension if the committee’s work continues into the summer.

Fine Gael TDs say Mr Coveney has already seen his leadership ambitions significantly damaged by the water controversy.

‘Noonan is the one who has to find the money’