More than 50 developments ‘turned down and jobs lost’ over waste water infrastructure issues

Construction – and more crucially house building – is facing a watershed moment.

At Ulster Business we’ve continued to raise the issues facing developers here, including planning delays and appeals – which is leading developers such as Lagan Homes to look south for expansion.

But two major concerns have reared their heads continually this year – although they are far from fresh problems.

One of them is the lack of capacity in our water infrastructure here.

A recent report said a lack of investment in Northern Ireland’s water infrastructure has resulted in “significant” capacity issues that are affecting new developments.

According to the report by the comptroller and auditor general of the Northern Ireland Audit Office, Dorinnia Carville, construction of new homes is among the developments affected.

Major schemes here are being recommended for refusal by NI Water due to insufficient capacity.

“We urgently need the independent expert review of the funding of NI Water as called for in the NI Audit Report published in March 2024 to begin to address the enormous obstacle that the water infrastructure deficit presents to social and economic development that is promised in the draft Programme for Government (PfG),” Mark Spence, chief executive of the Construction Employers Federation, told Ulster Business.

“Recently, the announcement of a £700m investment in the Magee campus, an exciting and important aspiration, must now be seen through the lens of NIW’s latest updates that rule out future development in Derry.”

He said that’s in addition to “some 55 commercial, manufacturing, hospitality projects that have been turned down due to lack of water infrastructure and has directly led to jobs being created as far afield as Poland”.

“It is simply not credible for our Executive to continue to kick this issue down the road and the construction industry would welcome the opportunity to add their expert input to the independent review in due course. “

Speaking about the PfG more generally, Mr Spence said while there is a commitment to delivery more housing here “it falls drastically short of what is needed in order to deal with Northern Ireland’s housing crisis”.

The PfG mentions a £150m enhanced investment zone for Northern Ireland, which is essentially a policy that provides grants and tax breaks for a region. This was promised in the Safeguarding the Union deal that led to the restoration of Stormont in February.

There is also a commitment to deliver a housing supply strategy is welcome, given demand is far outstripping supply, with more than 47,000 applicants on the waiting list.

“We are seeking Treasury agreement for appropriate treatment of borrowing to enable the Northern Ireland Housing Executive (NIHE) to increase investment in its homes, improve energy efficiency, and contribute to new supply,” it says.

“The Executive doesn’t appear to have fully understood that against a backdrop of a 60-year low of housing completions in 2023 – a record likely to be eclipsed by a new low in 2024 – fundamental reform is required to deal with the key blocks to growing homebuilding,” Mr Spence said.

“We believe it is crucial that the Executive treats housing as its main priority for the rest of this mandate because, if it does not, it risks removing from an entire generation the prospect of a home to call their own.

“Given the Executive’s one-year capital budget of £2bn for 2024/25 – the same in cash terms as some 17 years ago – and a recurrent need from NI Water from this of at least £600m per annum for the next decade, the Executive must face the urgent reality that the overall settlement, and what is likely in the years ahead, goes nowhere near the level required in order to deliver many of the key projects which form part of the draft PfG, never mind NI Water’s PC21 and PC27 programmes.”

He said while related strategies such as the Executive’s Investment Strategy and the Housing Supply Strategy are yet to emerge, it is therefore vital that urgent steps are taken to deal with both “decades of underfunding in our water and wastewater system which means that homebuilders cannot get new housing connections in large parts of the country and, a planning system which is no longer fit for purpose.”

“A fundamental test of any government must be whether it puts in place the enablers for a necessary level of newbuild housing to be delivered for its people. Currently, Northern Ireland is falling woefully short on this and a failure to act would be a damning indictment of this Executive’s performance.”