A proposed 50 per cent hike in the sewerage rate is unpalatable but necessary says the chairman of the Manx Utilities Authority.
Tynwald will be asked this month to approve a hike in the sewerage rate.
The sewerage rate was introduced in April this year to replace the £50 flat rate toilet tax, deemed by many to be inequitable, with even Chief Minister Allan Bell accepting it was unfair.
For 2015-16 the rate was set at 62p in the pound, raising the equivalent sum to the toilet tax if it had been increased to £100 as planned.
The MUA said the increase is in line with its 20-year financial plan and reflects the continuing scheduled withdrawal of the Treasury subsidy.
Mr Cannan said the increase was necessary if the MUA was to maintain operations and its ‘fiscal integrity’ amid the progressive withdrawal of Treasury funding of £1.5m a year up to a total of £9m.
He said: ‘Our sewerage operation can’t make up that sort of shortfall. I certainly don’t welcome bringing this charge forward. It’s not palatable and I accept the cost of living is rising for many people.
Mr Cannan said the rate was like to rise again the following year but his personal view was that it was ‘probably getting towards the top level’.
He said a report commissioned by the authority showed that the charge was £100 lower than the average set in England and Wales and even with the proposed increase would be £50 lower than the average across.
Lib Van said it will oppose the increase when it comes to Tynwald. The party has two MHKs.
Lawrie Hooper, Lib Van spokesperson for finance, said: ‘If the increase is coming about as a result of government reducing financial support to the recently merged MUA then this increase should be rejected until government as a whole can present a case as to why it is necessary to target the MUA versus other less important expenditure elsewhere.’
Mr Cannan said the MUA could not forecast it would come in ahead of target again and not increase the sewerage rate could ‘potentially store up problems for next year’.
He said ‘just because it’s election year’, it would be ‘wrong to kid the electorate’ about the authority’s financial position.
He said government was running a £75m deficit and rebalancing of public finances may be handled in a slightly different way under the next administration.
Source: IOM Today
