The Government is in a deep hole over Irish Water - so what can be done to redeem the situation?

The first thing to do, as whenever you find yourself in a hole, is to stop digging.

Stop adding insult to injury with off-the-cuff threats of rationing, tax increases of 4pc and a €425 charge if you don't register. Stop arrogantly dismissing nationwide marches as a ventilation of anger that will soon pass. These were among the reported reactions of the Taoiseach and his ministers early last week. One way or another, citizens will have to pay a lot of money for water, so most of the debate has centred around how it will be funded, whether by a charge on every home or from general taxation.

The street protests reveal widespread resistance to the separate charge; for many people it is the last straw after years of austerity. The latter strategy would place an unforeseen burden on the State's finances, just as we seemed on track to achieve the 3pc deficit target next year demanded by the funders of our national debt.

If the Government were ultimately forced to take the costs back onto the State's balance sheet, instead of keeping it "off balance sheet", this would constitute the kind of unforeseen shock that the Irish Fiscal Advisory Council and other independent commentators warned the Government to factor into its recent budget - advice which was ignored.

In addition to their dismay at the imposition of yet another tax, at a deeper level people fear the loss of democratic control over water supply. They also object to paying for what they see as gold-plated executive pay, perks and bonuses, 12-year contracts granted to an estimated 2,000 surplus staff and other arrangements that will drive up the cost of Irish Water to the public by as much as 40pc above international benchmarks. And many people fear that insistence on submitting their PPS number risks breaches of their privacy.

Fear of privatisation is born of the national trauma of seeing how the power of the markets was ruthlessly exercised to virtually bankrupt sovereign states, including Ireland.

The debacle of the Eircom privatisation also lingers; investors and staff reaped a bounty while the national network was starved of investment. Government reassurances that there will be no privatisation - and that legislation can guarantee against privatisation - will not assuage people's fears because, as the polls show, there has been a loss of trust in politics.

The only remedy to this predicament is a referendum that would enable the 150,000 people who marched and the rest of the population to use their vote to guarantee that the national water utility will remain under democratic control and will never become a commodity provided by a private monopoly. Such a referendum would have a cathartic value in mitigating the sense of powerlessness felt by many over this and other impositions.

The permission given to Irish Water to demand PPS numbers was spirited into a new Social Protection Bill - and went unnoticed by the media until it was too late. This manoeuvre, which itself has been seen as a breach of trust by Government, can be dealt with by rescinding this permission.

There is significant scope to reduce the cost base of Irish Water, but this will require going back to the drawing board and re-visiting the set-up the Government now admits was put together "under the cosh of the Troika".

If necessary, the emergency legislation that was introduced to enable cuts to public service pay, and which Mr Howlin has said he intended to dispense with, should be retained and invoked to renegotiate terms arrived at under duress.

The matter of bonuses needs to be addressed, not only in regard to the size of the incentives and the large differentials between senior and frontline staff, but also as to how the system will work. Elizabeth Arnett, head of communications at Irish Water, explained that someone on €100,000 with a potential 10pc 'incentive' will not get €110,00 if they perform outstandingly; rather they stand to lose 10pc if they badly underperform, thereby receiving only €90,000.

Does this mean that the person will be paid the €100,000 pro rata during the year and the money taken back if they underperform? Or will the 10pc be deducted monthly and awarded at year end?

A re-think will also enable realistic timelines to be established for tackling the countless legacy issues to do with bad water, responsibility for pipes that cross people's land and so on. If these are not dealt with proactively and fairly they will end up in court.

Public concerns over Irish Water are so complex that even announcement of a new charging regimes will not be sufficient to win over large swathes of the population who recognise the need to charge for water and are willing to pay - but not so long as they fear loss of democratic control over supply, threats to their privacy and the demand that they fund the apparently-extravagant staff contracts "negotiated" with a troika gun to the head.

No matter what sweeteners are offered by the Government to soften the blow to people's pockets, they will not be sufficient to allay concerns. Nothing short of a comprehensive statement from Government that addresses all of these issues will suffice to get his vital national project back on track.

Sunday Independent