NI Water funding model fit for purpose, says minister

The current funding model for Northern Ireland Water is fit for purpose, according to the infrastructure minister.

Housebuilding in Northern Ireland fell to a 60-year low last year, partially due to restrictions on new connections to an underfunded water system.

Plans for an estimated 19,000 homes are being held up due to the restrictions – affecting construction in 23 towns.

In March, a report from the NI Audit Office (NIAO) said there should be a comprehensive expert review of how NI Water was funded and governed.

When asked by BBC’s The View if the current funding model, and the way in which NI Water is established is “fit for purpose”, John O’Dowd replied: “Yes.”

“In fairness, the audit report does not suggest it is not fit for purpose… what it suggests is that we look at alternative models,” O’Dowd said.

“All alternative models that have been brought to my attention thus far involve domestic water charges, I am not introducing [them].”

O’Dowd told the programme that he doesn’t “recognise” figures from industry bodies, who have described the housing backlog as a “fiasco”.

The Construction Employers Federation has criticised the Department for Infrastructure and NI Water over thousands of homes which cannot be connected to the waste water system.

It told a hearing of Stormont’s infrastructure committee that 8,500 homes are being held back, which it said is around £1bn in investment.

The Royal Society of Ulster Architects (RSUA) told the same committee that one architectural practice had £400m of projects held up in the system.

The organisation said that the situation with waste water in Northern Ireland was a “fiasco”.

“It all depends on how you add them [the housing figures] up, or what formula you use,” O’Dowd said.

The minister highlighted the budgetary pressures of his department, which he explained faces “significant challenges”.

He added: “4,500 homes could have been connected during this price period, and there is the potential for 18,500 to be connected if developer contributions are included”.

O’Dowd would not be drawn on questions of specific new build developments which are yet to be connected to the waste water system, and said: “You’ve clearly done a lot of research which you could have shared with me beforehand, you chose not to.”

“You need to look at the planning conditions that were on those developments before they commenced,” he added.

NI Water has indicated that its waste water infrastructure is operating at full capacity.

In August, it said construction had been stalled in 23 towns.

The provider blamed underfunding, and a backlog in necessary upgrades and expansions is delaying new housing developments being connected to the existing network.

Last week, representatives from the utility provider warned Stormont that capacity problems would get worse without additional long-term funding.

The infrastructure committee was told NI Water is facing a significant gap in funding – both in the day-to-day running of operations and on the longer term capital side.

NI Water director of finance Ronan Larkin said there was a £23m funding gap between what they needed to run the service and what was available.

On the long-term capital spending plan, he said there was a £266m gap in funding or a shortfall of about 45%.

On Thursday, O’Dowd pointed to an additional £31m in funding which came from the Stormont monitoring round earlier this month.

He told the programme that, for this financial year, there remains an estimated £100m deficit that he is unable to fill.

“I want to ensure NI Water is delivering an efficient, effective service,” the minister added.