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Turley research supports joint position paper proposing potential solutions to wastewater crisis in Northern Ireland

A joint position paper, published today, including findings of reports undertaken by Turley and Grant Thornton and commissioned by NI Chamber, the Construction Employers Federation (CEF), and the Northern Ireland Federation of Housing Associations (NIFHA) has assessed the long-term impact of the wastewater crisis on housing and construction. It has proposed a potential way forward which includes the introduction of a low-cost Infrastructure Levy, along with other measures.

The summary paper combines the findings of two reports, undertaken jointly by our Economics team and Grant Thorton, addressing both the economic impact of not delivering sufficient infrastructure to enable housing delivery, and proposals for a new fiscal model to ensure sufficient investment in wastewater infrastructure in the future.

The paper comes on the back of the NI Fiscal Council Report, published on 10 June, which also warned that Northern Ireland’s wastewater infrastructure is facing a critical funding crisis that threatens to undermine economic growth, housing delivery, and environmental protection for years to come. Although undertaken and commissioned independently, the paper published today aligns with the Fiscal Council’s assessment that the current governance structure and the financial model of NI Water is unsustainable, concluding that action must be taken now to implement more appropriate fiscal mechanisms.

In addition to suggesting a progressive and modest rates-based levy to meet the deficit over this Price Control and the PC28 period (estimated at £2bn), the report also calls on the UK government with support from the Irish government, to establish a Wastewater Infrastructure Transformation Fund. The purpose of the fund would be to ensure major capital programmes, such as the Living with Water Programme, are sufficiently funded to kick-start more home building and industrial development across Northern Ireland.

Suzanne Wylie, Chief Executive of NI Chamber, said:

“There is no doubt that our wastewater infrastructure is at a critical tipping point, and if the required investment is not realised, it will continue to have a highly detrimental impact on our economy, our loughs and shorelines and how and where we live.

“NI Water’s current funding model means it is unable to effectively upgrade, replace and build the new sewerage infrastructure needed for our towns and cities. Because this has not been properly addressed for many years, the problem has escalated to a point that the system cannot take new connections in many areas, while much of the existing infrastructure is operating at over-capacity. We face a stark choice; continue to defer the inevitable or confront it with clarity and a commitment to long-term reform.”

Every report which has been undertaken to date has said that a solution needs to involve some form of revenue raising. The NI Executive has made it clear that to date, this is not part of its plan. However, this report sets out mechanisms for keeping any levy to an absolute minimum. One of the models suggests that the cost to the domestic ratepayer could be on average an additional £11.80 per month.

“Without such an investment it will be much more difficult to grow Northern Ireland’s economy, build enough homes to meet the needs of all our population, maintain and grow our construction sector and prevent more pollution of our waterways.” Suzanne concluded. 

Mark Spence, Chief Executive of the Construction Employers Federation in Northern Ireland, commented:

“The wastewater capacity and housing crises we face have been years in the making, but recent weeks have brought the urgent need for action into sharp focus. While the Infrastructure Minister's three-pronged approach has some merit, it's clear that the Department for Infrastructure's proposals on developer contributions and sustainable drainage fall far short of addressing the barriers to economic growth and environmental decline.

“Lack of investment in wastewater infrastructure is crippling Northern Ireland's construction sector. We're seeing the lowest new housing starts since the post-war era, delayed school projects, and factories opting to invest elsewhere. Turley Economics projects that without urgent investment, 6,150 essential new homes cannot be built in the next three years, exacerbating housing shortages and driving up rents. This stagnation would also result in 1,690 direct and 870 indirect job losses, costing the economy £1.3 billion in lost construction investment, with far-reaching consequences. The economic damage will only worsen each year we fail to strategically reform wastewater funding.

“The groundwork for a new approach has been laid, thanks to reports from the NI Audit Office and the NI Fiscal Council, the outcome of the UK Government's Comprehensive Spending Review, and our own findings. Now is the moment for decisive action.

“Without concerted action, the legacy of this Executive will be just the latest in a long succession of direct and devolved administrations that has failed to fully grasp the scale of underinvestment in water infrastructure.”

The joint position paper presents a series of models which propose a progressive levy applied to rates to recoup the cost of borrowing over 40 years. Modelling undertaken by Grant Thorton illustrates how the shortfall in investment could be met by the average domestic rate bill increasing by just £101.15 per year.

According to our Economics team investing sufficiently in wastewater infrastructure could add an additional net £2.5 billion Gross Value Added (GVA) to our economy by building more homes.

John Davison, Head of Strategic Communications said:

“As a multi-disciplinary consultancy, we have brought an array of skills and experience – led by our Economics team - to assess the impacts of shortfall in infrastructure funding. At Turley, we see every day the impact of Northern Ireland’s continued failure to address its wastewater funding issues, it is causing delay, uncertainty or even a total block on new development in some parts of the region. At a time when the UK and Irish government have prioritised house building and removing barriers to development, Northern Ireland risks falling further behind. What this paper demonstrates however is that there are also solutions, and if we want to live in a functioning, thriving society, with a healthy built environment, we need to urgently address this pressing issue. This is not simply about facilitating growth, much more importantly, it’s about meeting the needs of our society now, before this issue becomes even worse. Every person in NI wants good public services and whilst the issue of wastewater is not so easy to get our heads around as our health or education services are, it is fundamental to providing all the conditions for our towns, villages, cities, businesses, hospitals, schools, entertainment venues, waterways, etc. to work well and flourish.”

Seamus Leheny, Chief Executive of the Northern Ireland Federation of Housing Associations, added:

“Housing is a human right, but the current funding model places our supply of much-needed housing in severe jeopardy. This is a clear ‘invest-to-save’ opportunity and doing nothing, risking huge societal, economic and environmental damage, is not an option. The prize of addressing the problem, isn’t just a new fiscal model for wastewater infrastructure, it is essential to meeting the rising levels of critical housing need, reduce rising rents and meet the objectives of the NI Executives programme for government and the Department for Communities housing supply strategy. We know that this is not possible without upfront support from central government, and action by our NI Executive”

Speaking on behalf of Grant Thornton, Chief Economist Andrew Webb said:

“Grant Thornton is proud to have co-authored this report. Without urgent intervention, new housing, business development, and broader economic growth will be severely constrained, further damaging investment and impacting on workers directly and across supply chains. Earlier this month the Fiscal Council for Northern Ireland detailed similar strategies to address the shortfall in infrastructure spending. We have gone a step further in presenting models that illustrate the costs to rate payers to recoup the required borrowing. The environmental impact sewage pollution is having on the quality of Northern Ireland water bodies is already well documented. While it will not be easy to meaningfully address decades of underinvestment, the first step is to understand the scale of the challenge and responding – something we hope our report will help policymakers to do.”

The full paper is available to download below. For more information please contact John Davison. 

26 June 2025