27-06-2025
- Business
- Belfast Telegraph
£100 charge to home rates bills ‘could tackle NI's wastewater crisis'
The wider industry is warning that a £2bn funding gap for NI Water over the next eight years could see more than 6,000 homes unable to be built in the next three, while the worst case scenario could see a shortfall of up to 20,000 houses.
'Northern Ireland is no longer simply under strain – it is facing a full-blown crisis,' a fresh study says.
The study has carried out by Grant Thornton and Turley Economics, on behalf of the Northern Ireland Chamber of Commerce and Industry (NI Chamber), Construction Employers Federation (CEF) and Northern Ireland Federation of Housing Associations (NIFHA).
'At the heart of this crisis lies a funding model which is not sustainable,' it says.
'NI Water is reliant on continuing subsidies from the Department for Infrastructure (DfI), without a significant stream of revenue against which it can address long-term infrastructure investment and leaving its finances subject to the limitations and uncertainties of the NI Executive's budget.
'Now, as the critical infrastructure investment needed approaches £3.9bn, we face a stark choice: continue to defer the inevitable or confront it with clarity and a commitment to long-term reform.
'The evidence is clear, continuing to rely solely on public subsidy is not viable, unless the UK Government steps in and injects significant new capital. We know this is highly unlikely without joint political pressure from all NI Executive parties.
'The scenarios modelled in this paper show that practical, fair, and less financially challenging solutions are possible – but all involve political choices. Whether through borrowing, rates-based levies, developer contributions, or innovative financing models, addressing the investment backlog is now unavoidable.'
Among the suggestions for revenue raising are the idea of developer contributions – something which the Infrastructure Minister is considering as part of a recent consultation.
However, the study says 'they are not expected to generate the billions of pounds required and could result in two-tier housing delivery'.
It's also suggesting different models linking NI Water to our domestic rates bills.
Northern Ireland is the only region in the UK in which households don't pay directly for their water.
'To enable NI Water to access private capital markets on favourable terms, a 'Hypothecated Infrastructure Levy' could be introduced that retains public ownership of NI Water, supports long-term strategic investment and minimises pressure on the NI Executive's budget,' it says.
Over the next few years it says adding around £95 to an annual domestic rates bill could largely help address the £2bn deficit.
'Our most conservative estimate assumes a continuation of the current downward trend (around 12% reduction year-on-year) in new home completions and a continued failure to bring forward any of the necessary wastewater infrastructure projects within the next three years (the current Price Control period). This will result in a dramatic 4% reduction in the overall construction sector workforce in Northern Ireland (currently circa 60,500) by the end of 2027.'
That could lead to 'rising rental costs' and 'housing stress', resulting in a loss of 1,690 jobs in the wider construction sector.
'Northern Ireland is no longer simply under strain – it is facing a full-blown crisis,' the report says.
'A crisis, by definition, is a critical juncture marked by an acute imbalance between demands and resources, where failure to act leads to widespread negative consequences. This precisely describes the situation NI finds itself in today. As with so many crises, the true cost of inaction will only be clear once it is too late.'
Infrastructure Minister Liz Kimmins launched a public consultation on Developer Contributions for Wastewater Infrastructure, earlier this year.
It proposes two options – voluntary developer contributions, to offset the costs of upgrading or replacing the wastewater infrastructure preventing new connections in the specific areas where they are unable to build, or compulsory contributions.
But in an interview with Ulster Business, Infrastructure Minister Liz Kimmins are not on the cards, while she isn't sold on mutualisation as an option for NI Water.
'[The issues have been there] as a result of years and years of chronic under investment,' she said. 'For me, there's not enough investment.
'The only options that have been presented to me, other than what I'm doing, are options that will lead to water charging… and that's not something that I am willing into do.'
The latest report says while 'much of the immediate impact is now unavoidable… whatever harm can be ameliorated in the short term must be, and solutions agreed upon matched by commitments that provide certainty for the future'.
'The prize of addressing the problem, is an additional net £2.5bn Gross Value Added (GVA) added to our economy, stimulated by housing led growth and enabled by the delivery of our required wastewater infrastructure.'
