The Construction Employers Federation NI (CEFNI) has today published its robust response to the Department for Infrastructure's (DfI) consultation on Developer Contributions for Wastewater Infrastructure, asserting that the proposals lack sufficient detail and are "fundamentally flawed."

Following extensive engagement with homebuilders and the wider construction industry, the CEF identified numerous critical issues within the DfI's proposals. The Federation believes these measures will do little to reverse "decades of underinvestment in our water and wastewater system," which it identifies as the primary inhibitor to economic growth and an accelerant of environmental decline.

The CEF's consultation response coincides with the release of its latest CEF Construction Survey, which highlights the urgent need to address the wastewater and housing crisis as the industry's number one priority for the Northern Ireland Executive. This view is further reinforced by a recent report from the NI Fiscal Council, which also stressed the need to consider alternative funding models for NI Water's needs into Price Control 28 (PC28) and beyond.

Key Concerns with DfI Consultation Proposals:

The CEF's summary response to the DfI consultation outlines several major concerns:

• Unanswered Questions on Compulsory Levy: The principle of a Compulsory Developer Wastewater Contribution Levy comes with significant unanswered questions and potential negative consequences that require more detailed consideration.

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• Silo-Driven Policy: The consultation is perceived as another example of silo-driven policy development, failing to view the issue holistically within the context of all factors affecting homebuilding costs and delays.

• Impact on Site Viability: With no detail on the potential cost of a compulsory levy, assessing the viability of development sites becomes impossible, especially given existing affordable housing contributions embedded through Local Development Plans.

• Lack of Cost Detail: The absence of any detail on the levy’s specific cost makes it impossible for industry stakeholders to commit to its principle.

• Legal Complexity: While acknowledging the need for legislative amendment, the CEF suggests the compulsory approach is far more legally complex than a voluntary one.

• Collection, Ringfencing, and Capitalisation Concerns: Beyond the lack of cost detail, engagement reveals that fund collection would be complex, and the ringfencing and capitalisation of these funds specifically for wastewater treatment and upgrades are not guaranteed. The CEF questions what any compulsory levy would actually be "for."

• Risk of Two-Tier Housing Delivery: Both compulsory and voluntary levies raise concerns about creating a two-tier housing delivery system, potentially leading to a "housing lottery" where developments proceed based on the levy's impact on viability and affordability, which the CEF strongly advises against.

Despite these criticisms, the CEF agrees that Voluntary Developer Contributions do have a role. With appropriate legislative amendments, these could enable homebuilders to upgrade existing NI Water assets where commercially viable. However, the Federation stresses the limitations of this approach, stating that major wastewater treatment work upgrades deferred from PC21 are unlikely to be commercially viable if wholly developer funded.

Commenting on the consultation, CEF Chief Executive Mark Spence said: "In the context of the wastewater and housing crisis that we are facing, the publication of this consultation as part of the Infrastructure Minister's three-pronged approach is to be welcomed. However on our detailed review it is clear to us that, for the reasons we have outlined, the proposals are fundamentally flawed."

He added: "With no detail whatsoever on what a proposed compulsory levy would be, we find it impossible to support it in principle as it gives rise to significant concerns with respect to site viability, how any levy would be collected, how funds would be ringfenced for wastewater upgrade works and a potential housing lottery, all of which the consultation doesn't begin to answer."

"While we can support the principle of voluntary contributions as a commercial judgment for homebuilders based on an extension of existing processes such as storm water offsetting, we are also clear that this has clear feasibility limitations which must be understood," Mr Spence concluded.