Developer Contributions won’t solve the Housebuilding and Wastewater Crisis…

Infrastructure Minister Liz Kimmins has just issued a public consultation on Developer Contributions for Wastewater Infrastructure but unfortunately this won’t be enough to resolve a few decades of underfunding.

The 35 page document Developer Contributions for Wastewater Infrastructure – Consultation Document is aimed at raising desperately needed funds to upgrade and improve our dilapidated drainage system.

At present,19,000 properties in the planning pipeline have been refused a drainage connection. This is an astonishing amount, as it is over half of all applications in Northern Ireland. Drainage Problems Present Existential Threat to Northern Ireland PLC… – Slugger O’Toole

NI Water have confirmed that 34 foul network UIDs (unsatisfactory intermittent discharges) across 23 towns are high polluting and are now closed for new drainage connections. This means that no new housing or factories or schools or hospitals can be built in these areas unless there are already equivalent foul flows discharging from these sites. For these lucky few projects, a ‘like-for-like’ arrangement is accepted by NI Water, and they will permit a drainage connection.

As for the 18,000 applications (which can supposedly get a drainage connection), unfortunately many of these projects require expensive mitigation works to be undertaken before NI Water will grant them a foul drainage connection. This solution often takes the form of ‘stormwater off-setting’ but the opportunities for these off-setting mitigations are fast drying-up – if you pardon the pun!

However, coming back to this latest wastewater consultation.

The consultation presents two options. The first (Option 1) proposes the introduction of a ‘Voluntary Developer Contribution’ in areas where building is not possible due to a lack of wastewater capacity. Individual housebuilders and developers would be able to directly fund the upgrade of a public wastewater treatment works or the public drainage infrastructure to allow development to progress on their site. There would also be the option for developers to group together to joint fund these upgrades together.

The advantage of this voluntary contribution solution would be that it could fast-track housing and other developments – given the dire situation in the industry at the moment we need a quick solution. However, one of the disadvantages is that it could lead to a ‘post-code’ lottery effect where infrastructure funding is concentrated in the more affluent areas at the expense of the social housing and more deprived areas.

The second option (Option 2) would involve the introduction of a ‘Compulsory Developer Wastewater Contribution Levy. This levy would be paid by all developers, both private and public authorities, as part of the drainage application process. The advantage of this is that it would be fairer system than Option 1 in that the funds raised could be distributed, by NI Water, across all regions and types of housing.

However, there are two key disadvantages of this second option. Firstly, it will take much longer to collect the levy funding and then to arrange the various upgrades of the public drainage system, and who would decide which area went first. Developers could still be waiting a long time to get the go-ahead for their scheme.

Secondly, the ‘ring-fencing’ of the levy would be fairer but what’s to stop the Executive from reducing the overall funding to NI Water over progressive years and thus diminishing the money available to upgrade our crumbling drainage infrastructure?

So, in summary, whilst there are no easy choices I believe a hybrid of these two options would be best. Developers would be asked to pay a standard levy to help fund the overall infrastructure improvements in Northern Ireland whilst they also had the option to fund a voluntary contribution to fast-track their own scheme.

Finally, we must remember that neither of these options will solve the decades-long underfunding of our drainage systems. Another additional means of raising money will be needed to solve this problem.

For instance, could the developer ‘levy’ be expanded in the future to include what is often referred to as ‘Domestic Water Charges’?