NI water in a 'critical situation' with £30m hole in budget

By Rebecca Black, PA

NI Water is in a critical situation, with a £30 million hole in its budget, following a reduction in funding at the same time as an increase in demand for water, it has been warned.

Infrastructure minister Nichola Mallon said it has reached the point where it is threatening economic recovery in Northern Ireland in terms of "inhibiting" the building of new homes.

She described a "dramatic reduction" in income, with many businesses closed over lockdown, at the same time as a "significant increase" in water usage at home - adding the Executive is aware of the situation.

However, the minister said she does not support the introduction of water charges in Northern Ireland.

Ms Mallon said her department was given extra funding of £5.5 million in the June Monitoring Round, but said that falls "considerably" short of what is required.

"It's really critical for NI Water, we have an immediate pressing problem in terms of the income deficit, that's standing over £30 million at present," she told the Stormont Infrastructure committee.

"But if we're serious about economic recovery then investment in water and wastewater infrastructure is key. The phrase 'no drains, no cranes' is not just a soundbite, it's an actual fact.

"As we move to secure our economic recovery from Covid, we will have to invest in our critical public services and for me, A real critical service here is our water and our wastewater infrastructure.

"There are around 100 locations in Northern Ireland now that are at or almost at maximum capacity. That is a huge inhibitor in terms of building homes, building factories and growing our economy."

The minister added: "The immediate issue is extremely serious and I don't say that lightly. I have expressed concern that the allocation that was given is only £5.5 million.

"I do intend to submit a further paper to the executive, and I think that's important as part of our discussions around Covid recovery so I'm hoping that when I submit an additional paper that we could see additional funds coming across for that specific purpose.

"If we don't invest in our water infrastructure then the housing waiting list will continue to grow, businesses will continue to say it is difficult to draw down investment because you don't have the capacity to build."

The department's permanent secretary Katrina Godfrey said the concerns around NI Water are being backed up by the regulator.

"You don't have a £30 million hole in your budget at this point in the financial year without there being consequences," she told the committee.