The Department for Infrastructure (the “Department”) has issued its public consultation on Developer Contributions for Wastewater Infrastructure. This consultation opened on 21 March 2025 and will run until noon on 27 June 2025.
The purpose of the consultation is to gather views on whether the Department should introduce developer contributions to help fund improvements to the wastewater infrastructure. One of the key objectives in the recently published Programme for Government is to increase housing stock, in particular, social housing. Developers are prepared to create developments to make this a reality, however, this necessitates the vital connection and improvement to the current wastewater infrastructure. Over 100 areas of the wastewater system are operating at capacity. This in turn hinders further development and the provision of new housing stock as developers are unable to obtain connections to the existing wastewater infrastructure.
Therefore, the Department, as articulated in the consultation, has adopted a “three-pronged approach”:
- Securing Further Investment: Working with the Executive to secure further investment.
- Introducing SuDS: Introducing the Water, Flooding and Sustainable Drainage Bill to propel the adoption of Sustainable Drainage Systems (“SuDS”).
- Developer Contributions: Introducing some form of developer contributions. The consultation has mooted and explored two potential options.
Voluntary Developer Contribution Scheme
The first option analysed in the consultation is a Voluntary Developer Contribution for Wastewater Infrastructure scheme. Developers would voluntarily pay to offset the costs of upgrading or replacing the wastewater infrastructure which has prevented new connections being provided for in the specific areas where they are unable to build. This is a more project specific form of a resolution noting agreements are likely to be between developers and Northern Ireland Water as opposed to including any planning authority.
In relation to the voluntary contributions, the Department have recognised the issue of potential unfairness. Particularly it draws attention to the “first mover disadvantage” where the first developer who funds the upgrade and “future proofing” of the wastewater infrastructure will bear the burden of costs while subsequent developers would be able to take advantage of it for a fraction of the cost. This issue is reminiscent of the one faced by NIE Networks when they sought to upgrade their electricity grid. However, the Department has recognised this and provisionally proposed a “reimbursement scheme” to allay developer fears. Some developers may make a commercial decision to focus on improving wastewater infrastructure in high value developments where the profit margin is more generous.
Compulsory Developer Wastewater Contribution Levy
Alternatively, the Department may pursue the option of introducing Compulsory Developer Wastewater Contribution Levy. This would be a more general compulsory wastewater levy, requiring a financial contribution from all developers which would be used on a prioritised needs basis across the whole of the jurisdiction, not just in the areas that are directly benefiting. This would create a new ring-fenced fund which would be exclusively used for improving wastewater infrastructure in Northern Ireland.
However, there are key questions still outstanding, particularly around the mechanics of the levy. For example, how this general levy is to be calculated is not apparent from the consultation document. Additionally, it is not clear how the funds would be allocated. The consultation recognises that “clear and transparent” criteria would be required including the defining of “specific purposes” so that developers can better understand the Department's priority and decision-making. These are very important issues to be addressed in the future. The effectiveness of the general levy hinges on these issues being resolved in a practical and diligent manner.
Conclusion
There is also an acknowledgement within the consultation document that neither of the above options will provide the long term solution to the funding shortfall that is required to address the wider wastewater infrastructure needs in Northern Ireland. As it stands, it is estimated that £800m to address the historical underfunding. However, even if the funding was present now, it would still take a decade to address the issues within the infrastructure.
The consultation also gives brief consideration to the possibility of combining both options of introducing the voluntary for the short-term while further consultation is undertaken to refine the specifics of a general levy.
While not a perfect solution, this document provides a welcome starting point on the journey to addressing those long term issues.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
