NI water charges 'by 2006'

Water rates are expected to be introduced in 2006

Privatisation of the Water Service in Northern Ireland has been ruled out, the government has announced, but new charges are to be introduced.

Regional Development Minister John Spellar said on Tuesday that he had ruled out a flat rate charge for water applying to all households as "unfair".

He was speaking at the publication of an interim report, as government officials continued to evaluate responses to a public consultation on water charges earlier this year.

Water charges are to be introduced in April 2006.

There will be no widescale metering of supplies, and it is understood bills will be partly linked to rate bills or property values.

CURRENT AVERAGE CHARGES Northern Ireland: £473 (in rates) Scotland: £1,300 (property tax/water charges) England and Wales: £1,100 (council tax/ water charges) A step closer to water charges

The Water Service is to be replaced with a form of government company or corporation.

It will have no Crown Immunity, which means it could end up in court if it fails to meet legal standards.

Mr Spellar said he had discarded several of the original options put to the public during the consultation exercise after hearing people's opinions and receiving independent expert advice.

"I have ruled out the use of a universal flat rate household water charge," he said.

"I share the serious concerns expressed about the fairness of a charge that takes no account of a household's ability to pay, or to the costs of providing water and sewerage services.

"I can confirm that, in line with the executive's thinking, we will ensure that there is clear and firm protection for those on low incomes, so that the necessary additional payments for water and sewerage come from those who can afford them, on a fair basis."

The public was asked about the introduction of charges, the structure of the reformed service and how to protect consumers' interests.

Arguing that 'the Treasury should pay' would mean that we would be asking taxpayers in Great Britain to pay more when we are already paying much less than they do in council tax and water charges John Spellar Regional Development Minister

Options included a flat rate for all households, charges based on property values and rates based on how much water was used.

The government received 686 submissions from individuals, while 98 responses came from political parties, trade unions and other interested groups.

More than 12,000 petitions opposing water reform were received during the three-month consultation period, which ended in June.

The sector needs investment of more than £3bn over the next 20 years to bring it up to current European standards.

Mr Spellar said reform was critical to ensure efficient water and sewerage services were delivered at a fair and affordable price.

"We have already begun a major programme of investment to address the glaring deficiencies in the water and sewerage infrastructure," he said.

"Some additional contribution is needed from people here to help sustain that investment in the long term."

Northern Ireland householders pay about £473 each year on average in rates.

In comparison, Scottish people pay £1,300 per year in property tax and water charges per household, while England and Wales residents pay more than £1,100 in council tax and water charges.

Policy options

Mr Spellar said the introduction of domestic charges was never going to be a popular policy.

"However, arguing that 'the Treasury should pay' would mean that we would be asking taxpayers in Great Britain to pay more when we are already paying much less than they do in council tax and water charges," he said.

The minister's announcement confirms that it is only a question of how charges are introduced and what the initial level will be Bumper Graham Union spokesman

"We are now examining the remaining policy options for water changes, business model and the introduction of customer representation and regulation arrangements.

"Ultimately this will lead to the development of preferred options which will be subject to equality impact assessment."

Mr Spellar said although about 350 jobs would be lost at the Water Service, he believed most of the existing staff could be redeployed.

Water Service trade union spokesman Bumper Graham described the report as a "cop-out".

He said the public consultation process on the Water Service's future had showed an "overwhelming" rejection of water charges.

"The minister's announcement confirms that it is only a question of how charges are introduced and what the initial level will be.

"Furthermore, he has confirmed his intention to dismantle the Water Service and in doing so destroy hundreds of our members' jobs."