The responsibilities of local authorities have, in most areas of policy, contracted in the century since the foundation of the State. Until the late 1920s, activities like electricity generation were conducted in part by local councils when the decision was taken to operate the industry instead as a national company, not for ideological but for practical reasons.

At that time, the local councils also undertook the direct provision of many health and education services as well as water supply and wastewater disposal, but had a more limited role in land-use planning, where their powers were greatly expanded in the 1960s, so the scope of their duties has narrowed in many areas while broadening in a few.

The electricity industry and water services have features in common. Both involve local production and the transmission of surplus across a national network to areas of deficit, so both industries must sustain extensive facilities for distribution as well as production.

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Both are also ‘natural’ monopolies, in the sense that monopoly is not imposed by statute but arises naturally – it would not make sense to duplicate the delivery networks to every user in pursuit of benefits from competition.

There are none, since costs would be far higher. The ESB was accordingly designed from the beginning in 1927 as a State-wide monopoly company, initially to develop hydro resources, starting with the Shannon scheme. The Shannon is again in the news with the proposal to pipe surplus water across the country to the eastern region, where demand exceeds supply, a deficiency which is expected to continue.

The 1920s legislation foresaw an industry which would cover its costs through charges to customers and the ESB, even when new operators were introduced into generation in recent decades, has always been expected to bill customers sufficiently to balance the books and to maintain the capacity to raise finance for expansion through issuing long-term debt.

This debt is not classified as sovereign, like the debt raised to finance budget deficits, and is off the State books.

The budget for next year will see direct injections of State equity capital into Eirgrid, the electricity transmission company, and into the ESB unit providing local low-voltage distribution, but also into Uisce Éireann, which faces large outgoings in the next decade for system expansion.

Uisce Éireann has calculated that up to €2 billion per annum, possibly more, will be needed to close the capacity gaps which have emerged through historical under-investment by local authorities, from whom Uisce Éireann has inherited the water industry.

Since both electricity and water need to embrace a surge in capital expenditure and both belong to the State, it has gone unremarked upon that the State budget should inject capital – in the electricity case, the sole shareholder has chosen to subscribe to a rights issue, to keep the balance sheet in order and preserve the capacity for stand-alone borrowing in due course. For Uisce Éireann the situation is entirely different.

The company is prohibited from covering its operating costs by charging domestic customers and must also expand the asset base. Both the annual operating losses and the capital budget must be met from the Exchequer, a consequence of the decision to make water supply and wastewater treatment free to household customers, a privilege never afforded to electricity consumers over the last hundred years.

Last year, Uisce Éireann earned revenue from customers less than half its regular outgoings and must meet the investment bill on top of these recurring losses. Miraculously, the company is able to report ‘profits’ and even pays some corporation tax, out of a billion-plus annual State subvention.

When Irish Water was established, the intention was that customers would meet the costs and that the company would build a balance sheet strong enough to support independent financing.

There is a further difference between the electricity and water industries. All of those engaged in the State-owned electricity industry are directly employed by Eirgrid and ESB.

The water sector employs 4,400, but roughly half of these remain on the books of the local authorities, so Uisce Éireann does not enjoy autonomy in the deployment of its own workforce. These unconventional and unintended arrangements have arisen because of the rapid-fire reaction of the political parties over a decade ago to the public reluctance to pay for water.

Following the surprise election of an independent candidate opposed to domestic water charges in the Dublin south west by-election of 2014, each of the political parties in government and opposition reversed engines and pronounced themselves converted to the virtues of free water, at least for households.

The conversion has already proved to be contagious. Ireland is the only country in Europe which provides free water to domestic users. In the United Kingdom, the only region where water is free is Northern Ireland.