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On 20 November 2008, the Executive unanimously decided that there would be no household water and sewage payments in 2009-2010. As that was a collective decision, the Executive must decide how that cost will be met, and the June monitoring round will provide an opportunity to do that.
As part of the recent strategic stocktake, DRD identified that some £200 million of additional funding would be required for 2009-2010.
The Executive have not yet made a decision about the funding of water and sewerage services in 2010-11 and beyond.
As I outlined in my initial answer, that is a position for the Executive to take. When Members were first elected, the Executive decided to defer water charges for a year and to set up an independent panel, which brought forward a series of recommendations. We have yet to take decisions on all those recommendations, after which there will be a period of consultation.
The Executive decided to defer water charges further until 2010. Therefore, the Executive must decide how to meet the cost of that, because there is a very real cost to the provision of water and sewerage services. In that year alone, I estimate that cost to be in the region of £200 million.
Would that it were in my gift to decide how the Executive will find £200 million for the necessary investment in water and sewerage, but I am afraid that it is not. It is in the gift of the entire Executive, which is why it is an Executive decision. If there were to be any change beyond 2010-11, the Executive must pay for that by finding the money across Departments and services or by other means.
The average cost was some £200 per household. However, those calculations were based on what would have been paid last year and the previous year.
Water charges had been proposed during direct rule, and their deferral has had an impact on households, because they have not yet had to meet those bills. It has also had an impact on the Executive, which have had to find the money to pay for that service. We are investing about £1 million a day in necessary improvements to the water and sewerage infrastructure, which had not received proper investment for at least 20 years. We are playing catch-up and making substantial investments.
Households undoubtedly made financial savings as a result of the Executive’s decision. The Executive had to find the money to meet those costs and must soon decide how to meet the future cost of water and sewerage services.
In an attempt to be positive, may I ask the Minister to look into his crystal ball and suggest that the appointment of a new chief executive to Northern Ireland Water shortly will replace the floods of burst pipes — and the associated shambles — with new rainbows of hope for the future? On reflection, will he assure Members that there will be no separate water charges?
I look forward to the appointment of the chief executive. The Member knows from his time on the Committee for Regional Development that the current chairman has been acting as chief executive and, in my view, has done a very good job.
As I said in response to the previous question, in the past two decades, there was no investment in the water and sewerage infrastructure. Consequently, we have a substandard system in which more than £1 million a day is being invested in improvements. During the time that it will take to improve that system, leaks and other issues will, inevitably, arise. However, we are making a substantial investment.
The Executive must decide whether people will be billed at all for water and sewerage services. Having covered the cost of that over the past two years, the Executive must decide how to proceed in the future. All other decisions will flow from that.
I am grateful for the Minister’s confirmation that the Executive deferred water charges before knowing how that decision would be funded.
Does the Minister believe that the Executive’s approach to water charges helps or hinders Northern Ireland’s efforts to avoid the efficiency savings that the Chancellor is set to implement on Wednesday 22 April? In the event that the Chancellor requests at least £450 million in cuts to the Northern Ireland block grant, does the Minister feel that the decision to forgo water charges for two years is sustainable?
The Executive knew that, if the cost of water were not to be collected from households, the only other place from which that cost could be met was from the Executive — they would have to dip into the Budget in order to pay for that. That was quite obvious — there is no other third party or fairy godmother to pay for all that or to improve the infrastructure to the required standard.
Regardless of what the Treasury decides, we have our block grant. Ahead of the return of devolution, we strongly argued about the sort of investment that was needed here — particularly in relation to water, sewerage and a range of other issues — to sustain the return of devolved Government. We will continue to argue that case.
I do not think that we will make our decision based on how we think that the Treasury may feel about us or may regard the decisions that are taken. We have to assert our independence. Although the Treasury is responsible for allocating the block grant, we have some dignity in being able to make our own decisions. Were we to find that we are not able to make decisions on how we spend the money that is allocated to us, that would present a very significant challenge for the Executive and, perhaps, for this institution as a whole.
I look forward to hearing what the Treasury has to say, but I certainly know that I will continue to argue for independence in our decision-making.