Annual Conference October 2011 Water Services Training Group 15 th Annual Conference Water Services in Ireland – Organisational modernisation and new challenges 13 th October 2011

Annual Conference October 2011 Value for Money Review of the WSIP Mr. Tom Curran Kerry County Manager Chair of the CCMA water services committee

Expenditure Review – Why? Secure improved value for money from public expenditure Secure improved value for money from public expenditure Evaluate efficiency and effectiveness of WSIP (Subhead C1 – major water and waste water schemes) Evaluate efficiency and effectiveness of WSIP (Subhead C1 – major water and waste water schemes) Examine continued relevance of programme Examine continued relevance of programme Inform future investment decisions Inform future investment decisions Annual Conference October 2011

Expenditure Review – How? Dept of Finance guidance on VFM reviews which set out methodology Dept of Finance guidance on VFM reviews which set out methodology Steering Group – (DECLG/Finance/CCMA – Independent Chairman) Steering Group – (DECLG/Finance/CCMA – Independent Chairman) Review included an evaluation of: Review included an evaluation of: The broader context for investment in water services in IrelandThe broader context for investment in water services in Ireland Particular features of this sectorParticular features of this sector Existing funding and delivery modelExisting funding and delivery model A range of evaluative studiesA range of evaluative studies Compliance reports by EPACompliance reports by EPA EPA data on achievement of environmental objectivesEPA data on achievement of environmental objectives Annual Conference October 2011

Methodology contd… WSIP data on achievement of objectives using input and output dataWSIP data on achievement of objectives using input and output data Targeted consultation with key stakeholdersTargeted consultation with key stakeholders Assessment of alternative sectoral modelsAssessment of alternative sectoral models Illustrative project sampling exerciseIllustrative project sampling exercise A sample of DBO schemesA sample of DBO schemes An assessment of cost data for a sample of completed schemes during An assessment of cost data for a sample of completed schemes during Annual Conference October 2011

WSIP Annual Conference October 2011

WSIP

Key Findings Objectives of the WSIP remain legitimate and will continue to be valid in the medium to long term Objectives of the WSIP remain legitimate and will continue to be valid in the medium to long term The WSIP will require continued high levels of investment The WSIP will require continued high levels of investment The Report underpins the relative prioritisation of the WSIP within the capital envelope The Report underpins the relative prioritisation of the WSIP within the capital envelope Medium term – need increased focus on reducing UFW and deficiencies in infrastructure in gateways and hubs Medium term – need increased focus on reducing UFW and deficiencies in infrastructure in gateways and hubs Review identifies measures to improve efficiency Review identifies measures to improve efficiency Recognises that water services investment has a key role to play in supporting Ireland’s economic recovery through provision of capacity Recognises that water services investment has a key role to play in supporting Ireland’s economic recovery through provision of capacity Annual Conference October 2011

Conclusions Effectiveness = Extent to which objectives are achieved and benefits delivered WSIP has been reasonably effective in delivering on its objectives; WSIP has been reasonably effective in delivering on its objectives; Greater priority is required for Water Conservation Sub-programme (Section 4.6.3); Greater priority is required for Water Conservation Sub-programme (Section 4.6.3); Development of future assessment processes (stronger evidence base; investment cycles to distinguish proposed time frames for schemes; communication of national priorities) (Section 7.2.3) Development of future assessment processes (stronger evidence base; investment cycles to distinguish proposed time frames for schemes; communication of national priorities) (Section 7.2.3) Annual Conference October 2011

Conclusions (2) Efficiency =relationship between inputs (expenditure and personnel) and outputs (goods or services) Positive correlation between inputs and outputs Positive correlation between inputs and outputs Programme efficiency can be further improved Programme efficiency can be further improved

WSIP (by value)

WSIP (by value)

Efficiency

Recommendations - Efficiency Measures Project Appraisal Project Appraisal Project Delivery Project Delivery Project Management Project Management Monitoring Efficiency Monitoring Efficiency Water Pricing Review Water Pricing Review Annual Conference October 2011

Project Appraisal - Economies of Scale - potential for Economies of Scale - potential for Grouping across authority boundaries (with a river basin perspective);Grouping across authority boundaries (with a river basin perspective); grouping of schemes not just in terms of geographic proximity, but also in terms of similar level of priority re compliance.grouping of schemes not just in terms of geographic proximity, but also in terms of similar level of priority re compliance. Achieving correct project scale Achieving correct project scale The report recognises that for differing reasons, i.e., the achievement of lower unit costs in large scale projects; and the achievement of high levels of statutory compliance through a range of identified small scale actions; the greatest efficiencies are achieved by an appropriate balancing of the Programme to maximise efficiencies that can be gained at either end of the spectrumThe report recognises that for differing reasons, i.e., the achievement of lower unit costs in large scale projects; and the achievement of high levels of statutory compliance through a range of identified small scale actions; the greatest efficiencies are achieved by an appropriate balancing of the Programme to maximise efficiencies that can be gained at either end of the spectrum Annual Conference October 2011

Wastewater DBO Contracts – DB Cost per PE

Water DBO Contracts – DB per Ml/day

Project Appraisal - Preliminary Reports Guidance on Preliminary Reports to be updated to: Guidance on Preliminary Reports to be updated to: - ensure improved project scoping; phasing; and affordability/cost issues; - reflect issues arising in spot checks and capital appraisal guidelines and capital works management framework; - reflect new approach in WSIP through sequencing of contracts and river basin approach Annual Conference October 2011

Project Delivery Develop a streamlined statutory process to enable water services projects to proceed more expeditiously through planning Develop a streamlined statutory process to enable water services projects to proceed more expeditiously through planning As 30% of schemes in planning in WSIP are valued between €1-5m, but account for only 6% of value – examine scope for further devolved procedures under WSIP As 30% of schemes in planning in WSIP are valued between €1-5m, but account for only 6% of value – examine scope for further devolved procedures under WSIP develop a multi-annual approach to the small schemes measure under the Rural Water Programme (in consultation with CCMA and NRWSC) synchronised with WSIP investment cycle (to include a discretionary and targeted element) develop a multi-annual approach to the small schemes measure under the Rural Water Programme (in consultation with CCMA and NRWSC) synchronised with WSIP investment cycle (to include a discretionary and targeted element) Annual Conference October 2011

Shared Services Approach Proposals for roll out of shared services to be developed within 12 months of publication of VFM report in consultation with CCMA Proposals for roll out of shared services to be developed within 12 months of publication of VFM report in consultation with CCMA Established on a river basin structure;Established on a river basin structure; As a minimum involve sharing of services in planning and procurement; project management of large schemes; collation and presentation of regional information; strategic planning;As a minimum involve sharing of services in planning and procurement; project management of large schemes; collation and presentation of regional information; strategic planning; Can provide platform for development of a national agency.Can provide platform for development of a national agency. Annual Conference October 2011

Project Management Role of Project Steering Groups should be strengthened (Directors of Services to attend, standard reporting) Role of Project Steering Groups should be strengthened (Directors of Services to attend, standard reporting) WebPCS should be further developed and expanded to incorporate a management module, and to develop the programme management aspect WebPCS should be further developed and expanded to incorporate a management module, and to develop the programme management aspect An updated procedures manual should be provided to all water services authorities by the Department on a three yearly basis setting out all key circular and policy documents required to implement the WSIP An updated procedures manual should be provided to all water services authorities by the Department on a three yearly basis setting out all key circular and policy documents required to implement the WSIP Annual Conference October 2011

Monitoring Efficiency Performance Indicators Performance Indicators Develop formalised structure for reporting on agreed indicators aligned to each investment cycleDevelop formalised structure for reporting on agreed indicators aligned to each investment cycle Publish summary of each WSA’s performance indicators as part of each WSIPPublish summary of each WSA’s performance indicators as part of each WSIP IT based PMS to be used on all plants for comparative purposes IT based PMS to be used on all plants for comparative purposes Annual Conference October 2011

Water Pricing An independent review of water pricing policy should be carried out and should include: An independent review of water pricing policy should be carried out and should include: An assessment of its appropriateness An assessment of its appropriateness An evaluation of its implementation An evaluation of its implementation Recommendations on integrating domestic water charging Recommendations on integrating domestic water charging Assessment of adequacy of structures for implementing and monitoring pricing policy Assessment of adequacy of structures for implementing and monitoring pricing policy Recommendations for alternative flexible approaches to the application of polluter pays principles Recommendations for alternative flexible approaches to the application of polluter pays principles

Update Report was approved by the Steering Committee and the Secretary General, and was submitted to the Minister and presented to the Oireachtas in line with Depart of Finance requirements. Report was approved by the Steering Committee and the Secretary General, and was submitted to the Minister and presented to the Oireachtas in line with Depart of Finance requirements. Published in June 2011 Published in June 2011 Copies issued to all Water Services Authorities and available on Departments website Copies issued to all Water Services Authorities and available on Departments website Department accepted all recommendations and an action plan to implement them is now available on the Departments website Department accepted all recommendations and an action plan to implement them is now available on the Departments website Annual Conference October 2011

Current Developments  Programme for Government commitment to set up Irish Water – a new State company to take over water investment and maintenance programmes  VFM report is a valuable input into current independent assessment on establishing the new water company Annual Conference October 2011