Esmond Birnie: The ongoing lack of realism about money of the two main political parties bodes ill for the stability of Stormont

They have said this repeatedly since 2007.

This notwithstanding the fact that by not charging separately for water this implies less of the Stormont block grant is available to fund other parts of public services.

This implies, contrary to Sinn Fein, that the absence of water charges actually disadvantages below average income groups.

Households on below average incomes rely on public services to a disproportionate extent. Hence, they are effected relatively more by any restriction in funding.

Similarly, the DUP’s argument that this is a low quality public service so it would be unreasonable to ask people to pay more doesn’t wash. Services will certainly remain inadequate if Northern Ireland Water (NIW) is denied a sufficient amount of sustained funding.

The executive parties are unable to come up with a convincing way of meeting NIW’s massive funding needs other than by resort to the ‘old faithful’ of: “we will blame the UK government and ask for yet more money in terms of a special funding package”.

The recent Northern Ireland Audit Office report shows just how big the funding gap is. It found that total capital and resource funding available for 2023-24 was approximately £93 million lower than what NI Water had identified as being necessary, and it is expected that there will be another shortfall in 2024-25. This is likely to significantly affect the delivery of the assets under a 2021 water infrastructure plan.

The private sector, especially the construction sector, is already noticing how previous failures to fund NIW adequately are now leading to significant economic costs.

Housing developments and commercial expansions are being blocked given a sewerage and water treatment system which is stretched to the limit.

It is very hard to give any good reason why Northern Ireland should be such an outlier in terms of either the UK or Europe when it comes to not having direct domestic charges for water.

Admittedly, domestic water charges were hit by massive public opposition in the Republic of Ireland and the Irish government u-turned to end charging for most households in the mid 2010s. That said, the Republic of Ireland is unusual in European terms in terms of not charging directly for water, Northern Ireland should not follow this (bad) example.

There is also no good reason in terms of either economics or natural justice why the average total level of rates in NI is so much lower than the combination of Council Tax plus water charges in Scotland, England or Wales.

In 2020-21 the average household in Northern Ireland was paying £1,036, those in England £1,836, those in Scotland £1,581 and those in Wales £1,952.

In the 1850s the stench coming from the then open sewer of the River Thames moved Westminster to action in terms of building new water and sewage systems for the capital.

One wonders if Stormont needs a similar ‘great stink’ moment to shake it into action.

It might be argued that the deterioration of Lough Neagh has already been very notable.

A 1950s French Prime Minister Pierre Mendes-France said ‘to govern is to choose”.

So far, the evidence is that the recently restored Stormont would rather govern without choosing.

In the long run that cannot continue.

Continued lack of realism about revenue raising bodes ill for the prospects of a sustainable and stable Stormont government.

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Dr Esmond Birnie is Senior Economist Ulster University Business School