Debate contribution: NI Water Challenges

Debate contribution by Mr Mike Nesbitt on 8 April 2024.

MLA

Mr Mike Nesbitt

Party at the time

Ulster Unionist Party

Date

8 April 2024

Type

Debate contribution

Business

Private Members' Business

Heading

NI Water Challenges

Assembly identifier

Official Report component 4481592

Read the official Assembly record

Text

I beg to move

I should point out that it was my party colleague John Stewart, the Ulster Unionist spokesperson on infrastructure, who was scheduled to lead on the debate, but, unfortunately, he is not here because he is unwell. I am sure that the House will join me in wishing him a speedy recovery. I will begin with some thanks. First, I thank the Minister for coming to the Chamber to respond to the debate and, more generally, for his engagement on the issue of water management. I thank the Assembly research team for a very detailed pre-debate paper, and I also thank all the individuals and organisations that contacted us with their queries, questions and comments. I rise to address a really pressing issue that demands urgent attention; the state of Northern Ireland's water infrastructure. We are facing a crisis that requires action such as strategic investment, policy reform and changes to governance. Those are the three essential elements that we need to address. What we are calling for is, I believe, entirely consistent with the view of the Northern Ireland Audit Office (NIAO), which published a paper that called for a review.

That document was called 'Funding water infrastructure in Northern Ireland', and it called for a comprehensive review of alternative arrangements.

Let us begin by acknowledging the key challenges. Our water and sewerage network is ageing, to say the least. Over a third of pipes are more than 100 years old. The result is leakage rates that exceed 25%. Underinvestment in upgrading waste water treatment facilities leaves us struggling to meet environmental compliance standards, and climate change will exacerbate those challenges, with heavy rainfall likely to overwhelm our capacity through waste water and sewage. Compounding those issues are concerns around the funding model and the affordability of water charges. Of course, political instability in recent years has not helped in strategic decision-making and investment planning. The impacts of underfunding are profound and far-reaching. We face limitations in providing new water and sewerage connections for households and commercial development. That leads to construction delays and stalled projects. In turn, that will restrict economic growth and result in missed investment opportunities, which may tarnish our reputation and make Northern Ireland less attractive for inward investment. As the First Minister recorded at Question Time just an hour or so ago, the positivity of her visit with the deputy First Minister to Washington ahead of St Patrick's Day was quite astonishing, not least from the point of view of the business community that, in America, is saying that the time is right to take a look at investing here in Northern Ireland. The impact of the infrastructure deficit on housing is perhaps one of the most damaging outcomes of the historical lack of leadership and funding surrounding our water and sewerage management. It is widely accepted that we face a housing shortfall that places tens of thousands of families across Northern Ireland in crisis. It is simply the case that a growing number of planning applications going before council planning offices are approved but are then subject to agreement with Northern Ireland Water on how costs for water and waste infrastructure are to be met. There may be those in the Chamber who feel that such costs should be passed to developers and that such a decision would alleviate pressures on our existing services. Unfortunately, however, simply adding such charges on to developers creates serious issues, particularly in housing, both private and social. The cost of funding water and waste infrastructure in new developments creates pressures on housing associations, which can mean that whole social housing projects are scrapped because the funding to meet those additional costs is simply not there. The additional costs for new-build private and affordable housing are passed directly on to the purchaser, pricing more and more people out of being able to buy a home. I have examples of that in my constituency. There is a development in Newtownards where the developers had to fork out an additional £1 million to install the water infrastructure that was necessary to allow the houses to be built. It is my impression, from speaking to them, that that was nearly a deal-breaker in the decision for that development to go ahead. On the same theme, the Construction Employers Federation (CEF) estimates that waste water capacity constraints are holding up the building of some 8,450 homes. It believes that that equates to around £1 billion of investment. If you couple that with the proposals of housing associations and other developers, you will find that the Construction Employers Federation believes that the building of approximately 19,000 homes is, today, unable to proceed. Indeed, Northern Ireland Water accepts that over 100 areas have waste water treatment works that are at or approaching capacity. There are, however, potential actions that we can take to address those challenges. We could embark on a multi-year programme to replace the highest-risk water mains and sewers alongside upgrades to waste water treatment works' capacity and regulation compliance. Environmental protection measures, such as sewer separation and sustainable drainage systems, are also imperative, as is the effective management of agricultural run-off and the implementation of environmental farming incentives. My party continues to propose considering the mutualisation of Northern Ireland Water into a member-owned cooperative model. That could provide access to lower-cost financing and capital markets, remove us from public-borrowing constraints and enable more independent governance and long-term strategic planning. Reinvestment of surpluses and increased efficiencies would be key benefits of such a model. Turning to the current model, perhaps it is worth discussing some of the issues that, we believe, should be addressed and overcome. The shareholder of Northern Ireland Water is the Department for Infrastructure. It has a licence to be so from the independent regulator. The Utility Regulator determines price, and it is currently price control 21 (PC21), which runs until March 2027. PC21 was based on social and environmental guidance issued by the Department after public consultation. PC21 is accepted by the Department and the Northern Ireland Executive. The Utility Regulator has advised the Department that its mid-term review of PC21, which is under way, is likely to require more, rather than less, investment. It is a fact as I know it, but the Minister may correct me, that the Department lends money to Northern Ireland Water and charges interest on that loan and that no other public body in Northern Ireland pays interest for a similar arrangement. The Department also takes a dividend from Northern Ireland Water, and I am informed that if you add the dividends and the interest paid to date, that is a collective sum of £1 billion that could otherwise have been invested in the water infrastructure. Investing in the water infrastructure was, of course, a commitment of the New Decade, New Approach deal. It states:

"The Executive will invest urgently in wastewater infrastructure".

The question is this: has that happened? As a party, we call on the Department to follow the Audit Office recommendations, but, in the meantime, to stop taking the interest and dividends from Northern Ireland Water and allow it to invest to facilitate the building of more houses. Northern Ireland Water, I believe, costs taxpayers around £370 million per annum in subsidy and £450 million in capital every year. That, frankly, is the inescapable cost of owning a water company, and it is only bound to increase as we go on unless we find a different governance model and a different financial model. I look forward to the Minister's response.

1,264 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 01:20 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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