For some 15 years, Northern Ireland has, on an annual basis, built only around 50-60% of its new build housing need. Taken cumulatively over that period, that has resulted in a dearth of new supply of housing of all types further exacerbating our social housing waiting list and the difficulties many have in being able to move from home rental to home ownership.
While recent years have seen positive steps by the Department for Communities to introduce new models of home ownership to the market as well as provide continued, vital support to Co–Ownership Housing, little has shifted the dial in terms of new home starts and completions.
To give this some context, we at the Construction Employers Federation recently conducted a survey of our homebuilders which made clear that current wastewater capacity constraints are holding up some 8,450 homes equating to just under £1bn of investment. As we understand it, when coupled with the proposals of housing associations and other developers, approximately 19,000 homes are today unable to proceed. That figure doubles again to 37,000 if you factor in the number of housing enquiries that Northern Ireland Water have received.
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, and an ever–growing social housing waiting list, it is unquestionable that we are therefore in the middle of a housing crisis in Northern Ireland.
With DfC’s revised Draft Housing Supply Strategy of February 2022 targeting the delivery of 10,000 new homes each year for the period 2022–37 (a target likely to be restated in the coming weeks) we believe it is crucial that the NI 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.
While the reasons that make that 10,000 home target today effectively unachievable are manifold, we believe there are two main blocks to growing homebuilding in Northern Ireland:
- 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.
We believe there a number of short– and medium–term steps which the Executive must take to address these inhibitors to homebuilding and economic growth.
Ensuring existing assets are maximised and delivering immediate legislative change
Of the 19,000 homes currently being held up, homebuilder–funded solutions such as storm water offsetting can be advanced but only where both NI Water and the Environmental Agency are satisfied with the proposal. This approach, at significant cost to homebuilders, must be expedited to ensure that the proposed much needed development continues. Expedition must also extend to wastewater impact assessments which regularly take many unnecessary months even where solutions to enable homebuilding have been readily identified.
We must also be sure that, in working with NI Water and the NIEA, all existing assets are fully utilised and permits for discharge consents are granted where they are reasonable and cause no detriment.
Looking to the other 18,000 homes which are currently proposed for upwards of 25 cities and towns where no existing connection nor solution is feasible, it is vital that Department for Infrastructure urgently takes forward legislative change enabling homebuilders to fund wastewater system upgrades and associated infrastructure directly. While this will not be a panacea to the challenge that is faced, it undoubtedly will unlock a number of major residential schemes and it would be, in the wider funding context, absurd for DfI not to act on this.
Delivering fundamental reforms to NI Water including its mutualisation
We must continue to fund NI Water’s PC21 and PC27 business plan requirements – but we must also find a way to meet this nearly £600m per annum requirement sustainably.
In the context of the NI Executive’s constrained capital expenditure budget (at the same level in cash terms in 2024/25 as it was in 2007/08) we believe the target must be the reduction of the amount of capital expenditure that the Executive has to put into NI Water in any one financial year. In our view, this could be achieved by moving to a mutual model which, along with other reforms to the existing sub–optimal governance model, would enable NI Water to borrow (effectively funding their capital plans in the same way that the Executive does with the existing Social Housing Development Programme).
Crucial to this will be giving NI Water a defined income stream. We do not believe that this requires the introduction of individual household billed water charging nor, indeed, any uplift in the existing rate bills paid for by domestic consumers. Rather, from existing rate bills, a directly hypothecated income stream to NI Water could be created thus, along with additional legislation in respect of their governance model, enabling them to borrow against their assets. Short of this type of fundamental reform, we fail to see how the NI Executive can, sustainably, fund NI Water’s needs given their crucial need to wider economic activity such as homebuilding.
Reform of our underperforming planning system
It is our view that, some 13 years on from the 2011 Planning Act, significant reform is required to a system which many in our industry see as broken. Key reforms must include:
- Introduction of a statutory requirement for pre–application discussions for major and regionally significant applications. All statutory consultees must be obliged to fully take part in PAD while it must also remain proportionate to the type and scale of application that is under consideration;
- Reduce the 12–week (minimum) Pre–Application Community Consultation process for major and regionally significant applications to 8 weeks (minimum) where applicants have demonstrated to the relevant planning authority, within the Proposal of Application Notice that “meaningful engagement” can be delivered;
- All planning authorities must develop mandatory application checklists through a matrix approach that is based on the type/scale of development (a consultation on an element of this – Planning Application Validation Checklists – has been recently undertaken by DfI);
- Processing agreements should be agreed by planning authorities and proposed applicants for all major and regionally significant applications, with these agreements clearly detailing a timetable from Proposal of application Notice to application decision to which all parties, including statutory consultees, are obliged to stand over;
- Put in place statutory timeframes within which statutory consultees must respond to major and regionally significant applications;
- Where statutory consultees do not respond, or respond substantively, within the timescales that all parties have agreed to in a processing agreement, then the planning authority must have the right to determine an application without further delay;
- Additionally, where statutory consultees seek to request further information from an applicant to inform their own response, they must issue this request in no more than 8 weeks.
Conclusion
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 housing crisis is undoubtedly what faces us.
It is our strong belief that taking forward our proposals can continue homebuilding in the short–term, while also making sure that we have a plan for meeting the 10,000 per annum target into the future.
A failure to act on this would be a damning indictment of the performance of our Executive.
Mark Spence, Chief Executive, Construction Employers Federation. Mark joined the CEF in 2019 as Assistant Director having served 8 years’ as a Director for one of Northern Ireland’s main contractors. He was also appointed by the Finance Minister to the Procurement Board which has responsibility for developing public sector procurement policy and practice for the £3bn annual spend by the NI Executive.
