Official Report: Minutes of Evidence

The Chairperson (Miss McIlveen): We will now have a departmental briefing on unadopted roads. Hansard will record the meeting. I welcome, via StarLeaf, Conor Loughrey, who is the director of network services, and Lionel Walsh, who is the network planning manager. Good morning. You are both very welcome to our session this morning.

We cannot hear anyone at this stage.

Mr Conor Loughrey (Department for Infrastructure): Is that better?

The Chairperson (Miss McIlveen): That is loud and clear. Thank you very much, Conor. I ask you to open with your statement, and then members will follow with some questions.

Mr Loughrey: OK. Thank you, Chair. Hopefully, you can hear me OK. The last time that I was here, it did not work that well, but it seems to be a bit better today.

Thank you for the invitation to brief the Committee on unadopted roads. With me is Lionel Walsh, who is the network planning manager in the eastern division. He also chairs the private streets working group, which has oversight of private streets across Northern Ireland. The issue has come to the Committee before for discussion. Most notably, there was an inquiry in 2012, and there were certainly an awful lot of positive recommendations and outputs from that, which we will come back to later.

By way of background, as most of you will be aware, the Department manages the adoption of new roads that are determined as part of the planning process. When we say "determined", we mean that a road is suitable for adoption into the maintained road network, once it is completed in accordance with the approved drawings. Once planning permission is received, we work with the developer, the lender and the bond company to progress the adoption of a development's roads in a timely fashion. The legislation used for that process is the Private Streets (Northern Ireland) Order 1980. It is probably worth emphasising that the adoption of private streets in residential developments is a developer-led process, and the vast majority progress to adoption without the need for any intervention by the Department.

The Department is committed to ensuring that developers provide road infrastructure to a standard suitable for adoption. We ultimately do that through the planning process. There are a number of stages. As part of the planning application, we make sure that the standards used are appropriate. Once that is done, the private street is determined as part of the planning permission. The developer then takes out a bond, and the road is constructed and adopted. That is the theoretical process. It works well most of the time. There are occasions when it does not, but, for the most part, it works well. It is illegal for a developer to commence works on new developments without having an article 32 agreement and bond in place. Ultimately, that allows the Department to bring any development up to adoption standard should the developer fail to do so for any reason. Typically, a bond is a surety from a bank or another lender, but it has been known to be a cash deposit on occasions.

I mentioned the Committee for Regional Development inquiry in 2012. As I said, a number of very helpful recommendations and actions came out of that. One related to the role of solicitors in the entire process, which is very important. Since that engagement with the Law Society in 2012, there has been a greater awareness amongst solicitors of the importance of a bond being in place when purchasing a property. They have certainly moved in that direction. That is probably the single biggest factor that has helped to reduce problems.

A second issue that came out was the adequacy of the bond, and that was reviewed at the time. The issue was that, sometimes, the bond was insufficient to fund the completion of remedial works. Now, it is some time since it was last reviewed, and it can only be cleared by a Minister. We are updating previous submissions in relation to bond rates and will shortly bring something to the Minister on that.

Looking at the output and capacity of our privacy teams, that capacity reduced in 2015. You will be aware of the need to reduce staff numbers at that time to align with the resource budgets that were available. At that time, we lost a significant number of experienced private streets inspectors. The upshot was that that reduced our capacity to take enforcement action where a developer had commenced without a bond in place or, at the other end of the process, when they failed to complete the development. However, despite having limited resources, we have adopted over 2,600 new private streets in developments. It says in the text that these are figures for the past 10 years, but they are actually for the past eight years. Over that same period, there is a total bond value of about £120 million. That equates to approximately 330 new streets in developments being adopted each year on average. Equally, in respect of releasing bonds, we are averaging about £15 million per year. In that same period, we issued 223 enforcement notices to developers who failed to complete developments. All of this is summarised in the next table. You can see the value of the bonds and the bonds in place over the past eight years. In very simple terms, what it is saying is that we adopt about 10% to 15% of sites each year and release about 10% to 15% of bonds, and that, coming in on the other side, those are replaced by similar numbers that are added back into the process for new developments.

A third action that came out of the inquiry in 2012 was that we introduced a new policy to put in place a system for prioritising the backlog of sites. That seeks to prioritise sites predominantly on the basis of need. The length of time that the development has been 80% occupied is a key consideration. That is one of a number of considerations. We do not look only at the level of development. It is also very important to understand and consider the issues within individual developments.

There are a few other points that are worth mentioning. A significant number of older backlog sites have been in place since around the time of the property crash in 2007. Thankfully, those numbers are reducing as works get done and sites are bought over by new developers. However, some sites remain unadopted for a number of reasons, and we are looking to take those forward. We have noticed, in recent years, that there is an increasing trend for developers not to offer road infrastructure for adoption until the housing is complete in each phase. That is, presumably, because of a cash-flow issue for developers, with the need for house sales to fund the completion of infrastructure.

I mentioned that sites are prioritised depending on what the issues are at the site and the level of occupancy. The third factor that we consider is this: what are the chances of the development being completed? Whether or not the developer is still trading is another important factor in our consideration. If they are still trading, the best way to progress the completion of the site is to work closely with the developer to encourage them to complete it as soon as they can. Very often, that will be slower than residents would like. That is quite common. Certainly, if it is evident that a developer is unwilling or unable to complete the works to a required standard, we will consider enforcement action.

It is worth pointing out that there are some cases where we cannot use the enforcement processes to guide the works, and that is typically where there are land issues or access issues. We cannot use the article 11 process to deal with that. Again, the way forward there is to try to work with developers and residents to resolve the outstanding issues.

I am mindful that many sites have issues with Northern Ireland Water infrastructure. We recognise that. There are a number of legacy sites, and we are working with Northern Ireland Water to try to identify those long-standing sites in order to get them moved on and completed. I am aware that Northern Ireland Water is proactively trying to identify the high-priority sites and come up with a comprehensive list of sites and what the problems may be.

Finally, as well as unadopted roads that are part of the Private Streets (NI) Order process, you will be aware that there are a number that sit outside that. There is provision in the Private Streets (NI) Order to adopt such sites, but, as with any development, it is a prerequisite that it needs to be brought up to an adoptable standard before the Department will take it on. To give a sense of the scale, a study that was done about 10 years ago identified that there are over 620 kilometres of unadopted roads and laneways that sit outside the private streets process. The cost of bringing those up to standard would be in the order of £300 million. Clearly, given the Department's budgetary position, it would not be feasible for it to try to contribute to upgrading those sites.

Chair, that was a quick run-through of the paper. We are happy to take any questions.

The Chairperson (Miss McIlveen): OK. Thank you very much, Conor. That is very much appreciated.

All members can relate to the issue, given the number of affected sites across each constituency. You noted the work that the Committee carried out back in 2012. However, you highlighted only a couple of the recommendations, one of which relates to ensuring that solicitors have a much greater awareness of the issue. What concerns me is the level of the bond, which was identified as an issue back in 2012. It has been a considerable time since the Committee deliberated on that and made its recommendation, and yet there has been no change in the bond rates since prior to the Committee's inquiry. It has been a considerable time since we went down that road, and yet we still have not addressed the issue of the rates. You noted that you are looking at that and preparing something for the Minister. Why has there been a delay in dealing with that outstanding issue? You have identified that there are staffing issues and so on that are affecting progress, but some of the issues might have been addressed by increasing the bond in the first instance.

Mr Loughrey: There are a couple of issues there. First, any decision to change the bond can only be made by the Minister. Cases were made to previous Ministers for consideration. Then, there was a period when we were without Ministers. This is something that we have always been aware of. We are refreshing what has been done previously and will bring that to our Minister for consideration shortly.

The Chairperson (Miss McIlveen): The Committee made a number of recommendations. What is the status of the other recommendations? Are those are being considered? I am thinking, in particular, about a time limit on bonds. Has that been considered in any detail?

Mr Loughrey: The Minister wrote to the Committee to provide an update on those recommendations in February or March. Are you talking about a time limit at the end, before enforcement would kick in?

The Chairperson (Miss McIlveen): Yes. We are all mindful of legacy sites. You mentioned the fact that people leave the sites without bringing them up to standard and residents then have to deal with the consequences of that. Of course, time passes and some businesses cease to exist. However, if there was a time limit on a bond, that might better focus the minds of those involved — the conveyancing side, the developers and the various agencies that will need to be involved at completion — to bring a site up to the required standard.

Mr Loughrey: In some ways, we are at the mercy of developers because it is developers who decide what phases of sites need to be bonded. Rather than a time limit, we have an occupancy trigger for that. Once a site gets past 80% occupancy, we will consider it for enforcement. That is only one criterion. We need to look at what the specific issues are and whether the developer is trading. Ultimately, it is primarily a developer's responsibility. If they are still trading, the best and most efficient solution is to put a bit of pressure on developers to get sites finished.

The Chairperson (Miss McIlveen): I would be a bit more satisfied if you were telling me, "When we look at the submission on rates that will go to the Minister, we may look at some other suggestions as well". While the bond rate is an issue, there are other considerations that should be looked at.

You mentioned that some sites remain unadopted due to sewerage and road issues that the Department has no powers to remediate. The concern is that a bond's value lessens the longer it is in place. I have come across cases where the bond cannot cover the cost of the works required, while the developer company has been wound up or cannot meet the obligations. You said that you are working alongside Northern Ireland Water to identify some legacy sites. What is being done to identify the measures that you could take to address those issues, either in partnership with Northern Ireland Water or by seeking the powers to be able to do something about it?

Mr Loughrey: When we look at the sites, we look at what the issues are and what is needed to complete those individual sites. There are a number of issues around insufficient bonds and what the responsibilities are. Whether it is an old developer, a new developer or a surety, there are a number of ways that it can be progressed. Each site needs to be looked at on its merits.

The Chairperson (Miss McIlveen): There is an assumption that, when a development is completed and all the residents move in, that development will become part of the road network and become adopted. It is about the role that the Department plays throughout the process to ensure that that is done in a timely manner.

Mr Loughrey: Yes, I totally agree with you. A very useful lesson from the last time was to get solicitors on board with that. We are all aware of sites where there are no bonds. We certainly have every sympathy with residents of any developments where there are difficulties. When there is no bond, the difficulties are even greater, as we are aware. Certainly, that work has gone a long way towards ensuring that there are bonds in place. Obviously, we are looking at the adequacy of the bond. I think that it is working reasonably well at the minute. If we look at the table showing the number of bonds in place versus the number of sites that require enforcement action, we can see that the vast majority are progressing as they should be.

The Chairperson (Miss McIlveen): I do not doubt that. Obviously, it is very much dependent on the housing market. We went through a period in which sites were left — for want of a better word — abandoned during the downturn, which has created many of the legacy problems that you have. As we move forward, we need to be mindful of the lessons learned from that period.

Mr Loughrey: Yes. Certainly, a lot of those legacy sites, at the time of the property crash, were very problematic. As we come out the other side of that, we have seen a number of sites being bought over by other developers and developers enquiring about the individual problems at specific sites. We have examples of sites being bought and new bonds being put in place, so the market has improved, and that is, obviously, to everyone's benefit.

The Chairperson (Miss McIlveen): OK. Thank you.

Mr Hilditch: You are very welcome this morning, gentlemen. Are you able to share with us how many staff you are short by and how many it would take to run a much more efficient system or bring it up to scratch?

Mr Loughrey: At the minute, we have about 20 staff working on private streets. Those 20 staff cover the 3,470 live bonds that we have at the minute plus the enforcement cases. As I mentioned previously, in 2015, the Department had to, with staff numbers, cut its cloth to suit. Prior to that, we had approximately double the number of staff that we have at the minute. We have therefore had to do things differently and move into a reactive, rather than proactive, mode. To get back to a proactive mode and to be better placed to know the number of sites and levels of occupancy, we would need to go back to those pre-reduction levels.

Mr Hilditch: How were those jobs lost? Did people leave to go to other work, or were cutbacks required? Why are we now sitting at 50% of what we had?

Mr Loughrey: At that time, the Department had to look at its staff structures and match its structures to its available resource budgets. A lot of the things that the Department does are mandatory, legal requirements, whereas other things are more discretionary. A lot of the changes were absorbed by retirements. There were no redundancies per se. Some staff were reallocated to other parts of the Department, and some, as I say, retired, so natural vacancies occurred.

Mr Hilditch: Was it a mistake, then, for the Department to rationalise so heavily? Is that correct?

Mr Loughrey: No. The teams that we put in place reflect the budgets that we have. The starting point is to look at the available budget for staffing, and we have to resource the functions within that budget. I would not say that it was a mistake. It was something that we were forced to do to stay within our budget.

Mr Hilditch: OK, fair enough. The bonds add up to quite a considerable amount of money. What happens to those bonds once they are paid over to the Department?

Mr Loughrey: Lionel will keep me right here. The bonds come in and are held. The bonds are essentially a guarantee. They are typically a surety, although there is the odd cash one. They are held —.

Mr Hilditch: I know that they are held. Where are they actually held within the Department? Given the nature and size of the huge sums involved, are they put away in an investment?

Mr Loughrey: No. There are very few cash ones. Most of them are an agreement and do not involve cash at all. Most are an undertaking from a bank or a surety company, so there is no cash to be invested per se. It is a written, legal agreement.

Mr Hilditch: OK, thank you. Have sensitivity studies been considered on the 80% occupancy criterion? Could or should that be reduced slightly? Due to the nature of my constituency, in Carrick and Larne, there are problems with getting bin lorries and gritters onto sites if they qualify. Would it be worth looking at another percentage to assist people who live on those sites?

Mr Loughrey: An action that the inquiry in 2012 recommended was that we should discuss that with local government. The Northern Ireland Local Government Association (NILGA) carried out a review and did a pilot at that time. NILGA had a look, did a bit of work and concluded that it was quite happy with what we were doing and that the problem sites were coming to the top. NILGA came to the same list that we did, so it seemed that the identification of sites worked OK.

The difficulty is that, regardless of what you put the percentage to, the ones that are 80% occupied will naturally remain a higher priority than those that are 70% occupied. What we can do is limited. We have issued 223 enforcement notices over the past eight years. It is the same teams that are doing that that are managing the sites that do not go down the enforcement route. You can see from the table that, the more live, ongoing sites that we have, the less time that there is for enforcement, but, then, that is probably a better place to be because we want things to be done naturally and properly rather than having to go down the enforcement route.

Mr Hilditch: OK, thank you. I hope that we get to a better place on this subject.

Mr Beggs: Hello. Thanks for your background information, Conor. I am still trying to get to the bottom of why there has been such a large difficulty. You have said that it is illegal to commence work without a bond. Can you advise how many of the problem sites fit into that category? Have developers developed without a bond?

Mr Loughrey: The key thing there is that, now that the solicitors are dealing with this as it should be dealt with, it has become less of an issue. Through the property certificate and the legal enquiries, they are asking whether a bond is in place. In trying to attract people to buy a property, it is in a developer's interest to take out a bond because their solicitors will pick up at an early stage if it is not bonded. That has encouraged developers to take out bonds.

Mr Beggs: My question remains. Of the problem sites that we hear about, particularly ones where there are not even adequate sewerage systems in place, which is hugely problematic for the people who live in those areas, how many were developed without bonds in place?

Mr Loughrey: I do not have figures to hand. We can certainly find that out in relation to any individual sites, but I do not have numbers.

Mr Beggs: Can you come back to us with information, particularly on how many developers have been prosecuted for developing without having bonds in place?

Mr Loughrey: We can see what we have, but, as I said, it has become less of an issue because the market forces developers to take out bonds. Yes: there may be long-standing ones. I will see whether I can find out.

Mr Beggs: OK. Many areas are developed by a developer who sets up separate, ring-fenced companies, so that, if something goes wrong on one site, it will not affect their overall company — or group of companies, shall we say. If a site were developed without a bond and, perhaps, the developer went bust — I think that that has been a factor in all this since 2008 — is there still the capacity to prosecute the directors who were involved at that stage, even if the company has since been liquidated? At the end of the day, those individuals took a decision to develop a site without a bond. Has that occurred?

Mr Loughrey: Not as far as I am aware. Our capacity to do anything after a company goes out of business is extremely limited. I would hope that, in the modern day, in sites where there is no bond, no properties are being sold because solicitors are advising prospective purchasers accordingly.

Mr Beggs: My understanding of the legislation is that, all along, if you got a solicitor to do due diligence in a transaction, checking out whether there was a road bond in place would be a reasonable thing to require your solicitor to do.

Mr Loughrey: Yes.

Mr Beggs: Have you advised any householder to seek compensation from their solicitor and through the Law Society? I would have thought that that was where much of the difficulty occurred: where all the due diligence that should have been carried out by the solicitors who were involved in the transactions was not carried out.

Mr Loughrey: It has certainly come up again. The number of sites where we find ourselves in that position is small. Certainly, if there was no bond in place, that is the line that we take: that it is something that should have been checked by solicitors at the time. What they do thereafter is a matter for them.

Mr Beggs: The Department and, now, Northern Ireland Water collectively set the level of the bond. Can you confirm whether, if you get the figure wrong and are required to take enforcement action and draw down the bond, you pick up any additional costs, or the work simply does not get done because of your mistake?

Mr Loughrey: That could go a number of ways, because there is a definition in legislation of who the responsible person is. It could well be that the developer remains liable even if there is a shortfall, or the surety does, or possibly even the property owners. Again, it is a matter of looking at the individual circumstances of each case and seeing what the best way through it is.

Mr Beggs: Sorry: are you saying that, if you set the bond incorrectly and a company has gone bust, those who have bought their houses in good faith have no protection?

Mr Loughrey: If the bond is inadequate and the developer has gone bust, I would have thought that there was certainly a case to be made there. Without knowing the circumstances of a site, I could not give a general commitment. We would have to look at each site on its merits.

Mr Beggs: That is quite an important issue. You are saying that, if the developer's company still exists, he carries the responsibility and the occupants should probably pursue him if his company is still viable. If not, are you saying that the Department has a degree of responsibility? I would think that, as you set the bond level incorrectly and did not provide the guarantee that people needed, you could have a responsibility.

Mr Loughrey: If the developer is still trading, the developer still has a responsibility. That remains the preferred course of action. When we reduce bonds, that is something that we look at.

Mr Beggs: If there is no protection for the owner through the developer and the bond level is wrong, I would have thought that it was the Department's responsibility to step in. I get the sense that that is what you are saying.

Overall, are the numbers of unadopted roads with householders going up or going down?

Mr Loughrey: The number of live sites is going up. They are new sites. As you see in the table, the number of sites in our system has increased, but that is a reflection of the market. The level of enforcement action has reduced in the past number of years. That is probably reflective of our capacity and partly due to the fact that things are working better. The majority go through fine, but a small number cause the major difficulties.

Mr Beggs: I put on record that I have worked with local officials on a number of sites in the east Antrim area. It has taken quite a time, on occasions, but there has been good cooperation. Ultimately, we got a result by drawing down the bonds, and local services were improved and road services put in place.

Ms Kimmins: A lot of what I was going to ask has been asked already. Conor, I have one question. You talk about the greater understanding on the part of solicitors of the importance of bonds. Can the bond typically cover the adoption costs, if it comes to that? Is that what you are saying? How does that work?

Mr Loughrey: Sorry, you broke up. Will you repeat the question?

Ms Kimmins: Solicitors have a greater understanding of the importance of bonds. Can the bond cover the adoption costs, if it comes to that? How does it work?

Mr Loughrey: That is the plan. We take out a bond at the start to cover the cost of bringing a site up to the proper standard, and there are different levels of reduction as the scheme develops. We review at that stage. The intent of the bond is to enable us to access funding to complete the development of the site should the developer not be able to do so, for whatever reason.

Ms Kimmins: Most of what I was going to ask has been asked. I just wanted clarity around that. Thank you.

Mr Muir: Most of my questions have been asked and answered. Mr Hilditch asked what I wanted to ask about staffing arrangements. Staff shortages are having an impact on local people. People in a number of developments in north Down are living in a nightmare because their streets are not adopted. Are you aware of any safety issues arising from that? I am aware of residents who are at a real risk of falling and tripping because the road has not been completed. That is a concern. Are you aware of those issues? What are you doing to address them?

Mr Loughrey: Ultimately, the safety of any site lies with the developer, but, once we get into considering what sites to take forward for enforcement, the level of defects, the level of safety and public health issues will be considered. Yes, it is something that we consider, but, until such time as the road is adopted, those are issues for which the developer is responsible and would be made aware of.

Mr Muir: Do you gather information in relation to accidents and health and safety issues arising at the developments? Do you have statistics around that?

Mr Loughrey: No, we do not. That is not something that gets our length. If anything happens on a private site, it is assumed that the residents will contact the developer because the developer has the responsibility. We do not have powers to do anything. It is not something that we are made aware of in day-to-day operation.

Mr Muir: There are concerns around the issues and frustration about the Department not being able to move as swiftly as it should. Do you have any information on the oldest site that has not been adopted and how long it goes back?

Mr Loughrey: I do not. We can find it and come back to you on it. I do not have it to hand.

Mr Muir: It will be useful to have some statistics on the scale of the problem, because local people are enduring situations that have gone on for years now and are keen to see resolution. Thank you.

The Chairperson (Miss McIlveen): OK. Thank you. Mr Boylan.

Mr Boylan: Thanks, Chair. Welcome, Conor. In the paper, you say that bonds are insufficient and that you will present a paper to the Minister. Where is that paper now, and what are your views on proposed increases? Is there any information on that?

Mr Loughrey: I do not have it to hand. The paper is being developed, and I have not seen or approved it yet. It is something that we plan to take to the Minister shortly. Obviously, there are a few sides to it. The industry is another player here. If bond levels increase, there is an increased cost of bonds and increased cost to consumers and, ultimately, to the houseowner. All those factors have to be considered. Where that will end up remains to be seen. I do not know at this time, because I have not seen the conclusions of the ongoing review.

Mr Boylan: Obviously, there is an opportunity now, with the councils' new area development plans. Do you work with the councils on development, new sites and how you can recover some of this? If the planning service gives permission for a site, we need to see that those sites are developed and paid for and that individuals buy houses. It should be a whole package. From your discussions, is there an opportunity now to address the issues through a new phase of planning, or do you sit outside that with what you aim to do? Clearly, when a developer moves in, he or she has to finish the site, and that should be part of the discussions. No?

Mr Loughrey: Those are probably two slightly different things. The development plan looks at which sites can be developed, which sites are most suitable for development, and how that fits in to the whole fabric of the town or settlement. That sort of thing is looked at in the local development plan. We offer comments and advice on what constraints there might be for individual sites from the existing road infrastructure. Once a site moves to the development stage, to some extent that is different territory, with the Private Streets (NI) Order and how we ensure that that happens. They are slightly different issues.

Mr Boylan: If a bond will be taken out, surely there is an opportunity to talk about the price of that bond, the percentage, or whatever it is — whatever the site is — to ensure that the site is adopted fully at the end of the process?

Mr Loughrey: Yes.

Mr Boylan: Regarding legacy sites, does the Department foot the bill for all of that? I am surprised by some of the conversations that you had when asked questions earlier about sites that were given permission with no bond attached to them. In my experience, I have found that a number of sites sit for two, three, four or five years, or longer, and have not been finished. Where are we with trying to address those problems?

Mr Loughrey: We are doing ongoing work on the level of bond. There was a suggestion after the 2012 inquiry that bonds be index-linked. That was explored at the time, but the lenders had trouble with that. If the suggestion had been pursued, it was going to be difficult for developers to get bonds, so it did not progress. It is something that we are looking at, as part of the review of the bond level. It is not of particular interest to councils, but the Department is looking at it.

Mr Boylan: Do you agree that the discussion should be part of the process at an early stage? I appreciate that there are different responsibilities, but if we will ever sort this problem out, surely the issue needs to be discussed at the start of the process rather than later in the development? I know that some of the developments are in four or five phases that could be over a five-, seven- or eight-year period. That needs to be addressed at the start of the process.

I have a couple of final questions. You may not be able to answer on legacy sites now, but can you come back to the Committee with that information?

Was the issue with the voluntary exit scheme one of money? Why was a workforce model not put in place for delivery? It seems that a number of experienced people left the Department. How did that come about? When planning powers were transferred to local authorities, a workforce model was drawn up to deliver that service. Was that not the case with the DFI voluntary exit scheme? You have said that a number of people left and you lost experience. For example, how many people were working on bonds and how many are doing that now? You said that you lost over 50% of your staff. Why was there not a workforce model to deliver that service?

Mr Loughrey: The model that you suggest should have been put in place to deliver all the services that we wanted to do has to align with the available budget. The starting point is the budget, and we have to develop our structures to match that.

Mr Boylan: Conor, there is no point in saying that you develop a model to match the budget. Surely, all Committee members know, no matter what party we are in, that it is about delivering the service as opposed to the issue of the budget. I cannot understand how the staff have been cut by 50% — we let them go out the door — and now we are unable to deliver a service. It is about delivering a public service. Clearly, there was no workforce model, and it was a budget issue. Yes?

Mr Loughrey: We start with the budget and develop our structures to suit that. Given the number of bonds in place, our teams cover the vast majority. As I said, it works very well. A small number of sites need a bit more attention, and that will always be the case. We are where we are with resource and staffing levels. We cannot increase staffing levels without impacting the resource budget, and that applies not only to the private streets function but across a range of functions.

Mr Boylan: No, I appreciate that. I have a good working relationship with the staff, and they are doing as good a job as they can within the budget. How many staff who work on the bonds in the service have you lost? Did you say that 50% of staff had been lost?

Mr Loughrey: It is about 50% of the whole team, but bonds is a part of the entire process that includes planning, supervision and adoption. I cannot isolate a figure for bonds alone.

Mr Boylan: No, fair enough.

Thanks for your indulgence, Chair. Conor, I know that there are legacy sites, and I hope that you will write to us about who has that responsibility and what the Department will have to pay. As we move forward with new developments, there is an opportunity to have broader discussions with the planning service and everyone else, so that a proper percentage of bonds and accountability are put in place for new sites. Do you agree that those discussions need to happen now?

Mr Loughrey: Yes, and we are doing exactly that exercise with the bond review. It is purely a matter for the Department rather than councils, and we are actively looking at that matter.

Mr Boylan: I appreciate that. Thank you for your time and the presentation.

Ms Anderson: That last comment about the bond review is something that we all wanted to hear. In my constituency — in this district — there are 222 unadopted roads with a value of £12·5 million. Across the North, there are 2,991 unadopted roads that are worth over £101·5 million in bonds.

Someone has been raising this issue about the Woodland estate in the Waterside since 2007: Woodland Place, Woodland Mews and Woodland Heights. At that time, as you say, people believed that they were buying their homes with confidence. They did not think that they would have sewerage problems or unadopted roads. When I returned as an MLA a year ago, the situation was the same as in 2007; it had not been fixed. People had to be brought together, because they were ping-ponging them off one another. To be honest with you, some who rented or purchased houses in such estates were then left, in some places in Derry, unable to get their bins emptied. The bond review is part of the wider review.

You mentioned that developers seemed to be progressing work, and your officials were working closely with them and encouraging them to complete the developments in a timely manner. I have given you that time frame, albeit it might be slower than residents would like. I am telling you that it was diabolical.

What is a "timely manner"? When is the cut-off point for the Department? Are you reviewing that now, given that one example that I just cited? I could give you many other examples. There is a road in Derry that has not been adopted for 50 years. What is a timely manner for us as MLAs to scrutinise and assess this, working with your Department and others, and the developers, of course, in order to put them under pressure so that those sites can be completed to the standard that the residents moving into them not just expect but deserve?

Mr Loughrey: The review carried out at the time covered what a backlog site is. It related to occupancy rather than timing. When a site is up to 80% occupancy, it could then be considered for enforcement. I understand that you spoke to officials in the division about Woodland Close and received an update.

Ms Anderson: Yes.

Mr Loughrey: I am interested to know where the site of 50 years or longer is and whether it is subject to a private streets determination or is one of those that I mentioned that are not part of the private streets process. A number of those have no agreements or bonds.

Ms Anderson: I can get you that information. I have been down around the Skeoge Road. There had been lights and everything else at one time, but then it was discovered that a road was not adopted, so people came and took the lighting away instead of leaving it. Those are the kinds of things that people are working with.

I still do not understand the meaning of a "timely manner". That needs to be defined. Are you looking at that in the bond review? We need to be able to say to people who are buying or renting homes in estates in full confidence and good faith that those services will be provided within, for instance, a year of the developer leaving the site. I only throw that out. It should be six months; it should not even happen at all.

We need to be able to say to those residents that they will have their sewerage systems repaired or brought up to the standard that they deserve; the roads will be adopted; their bins will be emptied; and the services that they need on that estate will be provided. I am not so sure that you have yet explained a "timely manner".

Mr Loughrey: If we put ourselves in a developer's shoes, the difficulty is that it depends on the rate of sale of houses. On a slow-moving site, as we had in the recession, a developer will not want to give any commitment when only a small percentage of houses have been sold. There are cash-flow issues for developers, which is why 80% occupancy seemed to be a reasonable balance, looking at it from a developer's side and a property owner's side.

Ms Anderson: Will we accept that a developer will go into an estate and put in a substandard service because of cash-flow issues and will deliver the services that the people who purchased those homes or are renting them deserve only when it is at 80% occupancy? Other than that, can they get away with providing substandard work, and that will be acknowledged and accepted by the Department because of cash-flow issues?

Mr Loughrey: I would not necessarily use the word "substandard"; they are incomplete works. Typically, a development will have incomplete roads, depending on the level of development on a site. Developers will not want to put in roads and then have to dig them up in order to put in services for the next phase of houses. At a practical level, a developer will take it so far and maybe put in a base course. Many of the sites just need a wearing course before they are completed, and I can see the sense in that because a developer does not want to put in a wearing course and then to dig back through it again to link developments and provide services.

Ms Anderson: With all due respect, I think that, if people have to live with a foul smell in a home for 10 years because a sewerage system is not adequate, that is substandard. We are not talking about putting on the surface. We are talking about potholes and roads being left in such a state that any impartial observer with an eye in their head looking at it would not say that it is being done to that level and standard but it will be improved. I can definitely tell you that I can confidently categorise the cases that I have been dealing with as substandard work, and I do not think that the Department should accept that situation.

Mr Loughrey: I am commenting from the Roads side, and we are happy to look at any individual sites. There are separate bonds for Northern Ireland Water infrastructure. I am not aware of the detail on any specific sites. We can find out whether sites have been identified, but I am not aware of them.

Ms Anderson: Therein lies the problem. When there are 2,991 unadopted roads and sewerage problems, it should not be assumed that developers have done the work to an adequate standard. All that you have to do is to knock at the doors of residents and listen to their concerns to realise that, when we have to deal not only with you in DFI Roads but with NI Water and the developers in bringing everyone together around the table, developers move from that site and redevelop another part of it when that is not complete. We need to look at what kind of enforcement is in place.

I will pick up on what Cathal said. I read what you said about the voluntary exit scheme. Given the voluntary exit scheme, private street inspectors were not available in the numbers required in the workforce plan to inspect as they needed to. My understanding is that the voluntary exit scheme should not have been taken forward in that way if it was going to have an adverse impact. The voluntary exit scheme means that there are not enough private street inspectors.

Mr Loughrey: Yes, but the issues around the timing of completion of developments are not impacted by the Department's staffing levels. It relates more to the intent and plans of a developer rather than the Department. Obviously, that is from their point of view when they are looking at cash flow and at nugatory work and things like that. They need a master plan for their entire site, and we have to consider what is reasonable for that.

Ms Anderson: Surely a master plan for a site should be at the beginning of a process when a developer is proposing to do whatever it is, whether it is a housing estate or anything else, so that there would have to be a guarantee that NI Water would work with the developer, as has been done, and that the developer will deliver the kind of sewerage system that will allow NI Water to pass so that the roads can be completed. Some of these roads cannot be adopted, because the work that needs to be done underneath the roads is preventing Northern Ireland Water from fixing the roads, as it will have to dig it up because of the problem with the sewerage.

To be honest, I fear that there is maybe a view in the Department about the cash flow of developers. If developers do not have the cash to deliver the sites, many people end up with big mortgages, having taken on massive debts for homes that they want to move into with confidence. They are excited about moving into their first home or somewhere they want to live, and then they end up with sewerage problems and foul smells. That is what I am dealing with in my constituency, and I am not the only MLA dealing with those issues.

Mr Loughrey: Certainly, we have every sympathy with any property owners who find themselves in that situation. I have been there myself, having moved into a development where it took time for the works to be carried out, so I get that fully. It is down to the extent of the problems and what it takes to address them. Residents should certainly not be in a situation where there is a foul smell in the property. That means that something was not constructed properly, as opposed to something being incomplete. I think that that is a different issue. Without individual examples, I would need to discuss that with Northern Ireland Water. I need to understand individual site needs better before I can comment on them.

Ms Anderson: Chair, from this session today, the Department should realise something: "Houston, we have a problem". We have 2,991 unadopted roads. We have over £101 million in road bonds. We have developers moving from one site to another, leaving those sites in substandard condition, not just the roads but the sewerage systems underneath them, which they need to come back to repair.

Based on what you are hearing today from MLAs— we can all provide evidence, and I am sure that it would not just be in our Committee, if that is what is required — I recommend that the Department investigates this. I think that that will result in the need for some kind of robust action to be put in place on a legislative footing so that these developers are held to account. It is not just with bonds, but, in my opinion, they should only be allowed to move to another site within a reasonable time. That is why I asked about a timely manner. Before they move to another site, they need to complete the site for which they were granted permission, in good faith, to develop in the first place. Thank you, Chair, but I think that we have a lot of work to do in the Committee to take this further.

The Chairperson (Miss McIlveen): Thank you. You have stolen a bit of my thunder for the summation, but we will move on to Mr Buchanan.

Mr K Buchanan: Thank you, Chair. I appreciate that a lot of stuff has been covered. I have a quick question about guidance. For example, if a developer is building 10, 20 or 100 homes, is it a different bond process for each of those depending on the size of the estate or the size of the roads? Are all those parts of the guidance financially insufficient? When you give the green light to a developer and you have a bond, is that insufficient to finish the road work if the developer goes bust?

Mr Loughrey: No, the bond should be sufficient to meet whatever outstanding work needs to be done; the bond should cover that. How a bond is packaged depends on a developer's individual needs, and we have noticed a movement towards smaller bonds. I remember that, in days gone by, they would try to bond the entire site. They have maybe moved to smaller packages now, doing a number of streets in a development, bonding that, getting that work done, those houses sold and the money in, doing the works on those and getting those adopted. They have certainly moved towards smaller bonded areas, but the process is still the same.

It is complicated; we have 3,000-odd bonds in place. Those are all live bonds. That includes bonds that have just been taken out on new developments. They are not backlog sites. That is the total number of developments or bonds that the Department has in place for sites of all ages.

Mr K Buchanan: Do you agree that there are issues with the whole bond process? You heard the points made by Martina, Cathal and other members. Do you agree and understand that the whole bond process and the finishing of unadopted roads is a big issue?

Mr Loughrey: Not necessarily. A review was carried out in 2012. As I said, the vast majority of sites progress as per the normal process. Staff, developers, elected representatives and property owners do a lot of excellent work to make sure that the vast majority of them go through as planned. Yes, a small number could be better. It is a developer-led process, and the Department's role is restricted and limited. Ultimately, developers are responsible for the timing and programming of sites.

Mr K Buchanan: A developer can move on and, as Martina said, leave the mess behind for the people in the area to live with. That is unfair. It needs to be tighter. I appreciate that the review will cover that.

My final question is on the table in the briefing paper. The figure for bonds in place is up by 25% from 2013-14, but the number of enforcement actions is down by 80%. I appreciate that the numbers may not be linked, but have you anything to say about those figures?

Mr Loughrey: The increase in the number of bonds reflects the market. We are in a post-recession time and the housing market has got better. The better it gets, the more bonds that will be in place, the more activity there will be in the housing market, and the more resource that will be required from our side to manage that.

The reduction in the number of enforcement actions since 2013-14 and 2015-16 reflects our reduction in the number of staff who are available for work of that nature and the need for those staff to work on a busier market and on live sites that are working properly. It is the combination of a couple of things.

Mr K Buchanan: The reduction in enforcement action numbers does not tell us that the problem is going away. It is telling us that there are not the staff to solve the problem.

Mr Loughrey: The reduction does not tell us that the problem is going away. There are fewer actions because staff are more focused on trying to resolve sites without the need for enforcement, which is the preferred course of action.

Mr K Buchanan: Thank you, Conor. Thank you, Chair.

The Chairperson (Miss McIlveen): Thanks to Conor and Lionel, who did not have very much to say in that session. Thank you very much for attending. As you will gather, members have concerns, and we will return to the issue.