The infrastructure minister for Northern Ireland, John O’Dowd, has recently stated that the current funding model for Northern Ireland Water (NI Water) is adequate for its intended purpose. This affirmation comes at a time when the region is grappling with a substantial housing crisis, characterized by a notable decline in housebuilding activity, which plummeted to a 60-year low last year. The backdrop for this drop in construction has been identified as restrictions on new connections to an underfunded water system, exacerbating the challenges faced by potential homebuyers and builders.
The constraints on the water system are significantly impacting plans for approximately 19,000 homes, with construction halted in 23 towns across Northern Ireland. This stagnation in the housing market not only affects the availability of homes but also represents a sizeable economic investment that remains unrealized. The Northern Ireland Audit Office (NIAO) published a report in March suggesting that there be a thorough review of how NI Water is funded and governed. The report advocates for an evaluation that could potentially illuminate alternative funding models for the organization.
When pressed by BBC’s The View regarding the sufficiency of the current framework, Minister O’Dowd affirmed its fitness, stating, “Yes,” but he also noted that the audit does not imply the model is ineffective; instead, it proposes exploring other alternatives to the existing funding system. O’Dowd emphasized, however, that suggestions of introducing domestic water charges as a means of generating additional revenue are off the table, as he is unwilling to implement such measures.
Tensions concerning the housing crisis were further highlighted by reports from various industry representatives, who described the backlog of housing development as a “fiasco.” The Construction Employers Federation specifically criticized both the Department for Infrastructure and NI Water, indicating that up to 8,500 homes may be unable to connect to the waste water system. This situation is particularly dire, amounting to approximately £1 billion worth of investment that remains sidelined.
Moreover, the Royal Society of Ulster Architects (RSUA) noted that one architectural firm has had £400 million in projects stalled due to the current inefficiencies in the water system. The RSUA characterized the overall situation as unsatisfactory and severely limiting to regional growth. In further comments, O’Dowd mentioned the variances in assessments of housing figures, suggesting that the discrepancies depend on the methodologies employed to calculate and interpret these statistics.
The minister also addressed the budget constraints faced by his department, which operates under “significant challenges.” He indicated the potential for connecting 4,500 homes during the ongoing price period, with an optimistic estimate of up to 18,500 connections if funding from developers were included. When questioned about specific developments that remain unconnected to the waste water system, O’Dowd eschewed detailed responses, highlighting the importance of considering the planning conditions laid out for each development before they commenced.
NI Water itself has incriminated insufficient funding as a leading cause of its operational struggles, asserting that its waste water infrastructure is already functioning at full capacity. In August, the utility company declared that construction was halted in an alarming 23 towns, pointing to a backlog in necessary upgrades and expansions as the primary factors impeding new housing developments.
Amidst these critical concerns, NI Water’s finance director, Ronan Larkin, revealed a stark £23 million gap between the funds required to maintain services and what the organization has at its disposal. He further elaborated on the long-term vision, indicating a £266 million shortfall in capital spending, highlighting that this represents a staggering 45% of the necessary investment.
Recently, Minister O’Dowd announced that an additional £31 million in funding had been secured through a Stormont monitoring round, but he cautioned that a remaining budget gap of approximately £100 million persists and cannot be bridged without substantial intervention. The unfolding situation demands urgent attention, as stakeholders continue to advocate for both immediate and long-term solutions to the water and housing crises in Northern Ireland.
