NI Executive ‘will need to raise funds from water charges’

The Executive will need to raise money from water charges or other sources if it wants to improve the performance of NI Water, an independent watchdog has concluded.

The Northern Ireland Fiscal Council said changing the structure of NI Water will not, on its own, make a sufficient difference.

“The fundamental constraint on NI Water is a budgetary one,” it said.

Persistent underfunding of NI Water has led to shortfall in wastewater infrastructure which in turn is limiting housebuilding and other development.

Northern Ireland is the only part of the UK where households do not pay directly for their water.

Instead, NI Water receives a government subsidy which diverts more than £300m annually from the Executive’s budget.

The Fiscal Council said a popular belief that households pay for water through a portion of their rates bill is not true.

It said the link with the regional rate was broken in 1998.

Sir Robert Chote, chair of the council, said: “The current funding model is not fit for purpose.

“Charging for water or increasing taxes would put a further squeeze on the household finances, but failing to do so has its own costs.”

Sinn Féin and the DUP, the largest Executive parties, are opposed to water charges.

The Sinn Féin-controlled Department for Infrastructure is holding a consultation which could lead to all housebuilders in Northern Ireland having to pay into a wastewater infrastructure fund.

The infrastructure minister, Liz Kimmins, has set out a second proposal which would involve voluntary contributions from developers.

She said developer payments alone would not solve the problems but would be a “step forward on the journey towards having the infrastructure we all need”.

Much of Northern Ireland’s wastewater infrastructure is ageing and needs upgraded.

It means there are more than 100 towns and villages where the system is operating near or above capacity and cannot accommodate any additional wastewater connections.

Speaking in March, Kimmins said: “Due to years of historic underfunding and austerity by the British government, our current drainage and wastewater infrastructure is in urgent need of upgrades.

“Improving our sewerage systems will be a significant undertaking, costing billions and spanning multiple decades.”