Official Report: Minutes of Evidence
Committee for Infrastructure, meeting on Wednesday, 18 June 2025
Members present for all or part of the proceedings:
Mrs Deborah Erskine (Chairperson)
Mr Cathal Boylan
Miss Nicola Brogan
Mr Keith Buchanan
Mr Stephen Dunne
Mr Andrew McMurray
Mr Peter McReynolds
Witnesses:
Professor Alan Barrett, Northern Ireland Fiscal Council
Sir Robert Chote, Northern Ireland Fiscal Council
Mr Jonathan McAdams, Northern Ireland Fiscal Council
Ms Maureen O'Reilly, Northern Ireland Fiscal Council
Report on the Financial Sustainability of Water Delivery Services in Northern Ireland: Northern Ireland Fiscal Council
The Chairperson (Mrs Erskine): We welcome from the Northern Ireland Fiscal Council Sir Robert Chote, chairperson; Jonathan McAdams, chief of staff; Professor Alan Barrett, council member; and Maureen O'Reilly, council member. You are very welcome to the Committee. I have been reading your report avidly. It was a pleasure for some Infrastructure Committee members to attend in person your briefing at Ulster University. We thank you for your work on the report.
Obviously, we have an extensive report in front of us. Will you give a brief outline of the report for five minutes? I know that that will be difficult to do in five minutes, but I ask you to detail and introduce the report in that time, if you can, because I am keen to come to members' questions on it. Thank you.
Sir Robert Chote (Northern Ireland Fiscal Council): Thank you very much, Chair, for the invitation. Let me take you briefly through the highlights of the report.
As you know, Northern Ireland is the only part of the UK in which the water and sewerage industry remains in public ownership. Northern Ireland Water (NIW) was created in 2007 towards the end of the period of direct rule. At that time, the UK Government intended to introduce domestic and non-domestic water charges. In the end, they decided to leave the decision on domestic water charges to the incoming Executive. The incoming Executive then decided to defer the introduction of domestic water charges, and their introduction has remained deferred ever since. As a result, instead of money coming from domestic water charges, the Department for Infrastructure pays an equivalent amount in subsidy that accounts for about 70% of the income or financing of NI Water.
One complexity is that you can look at the finances of NI Water through two lenses. There is the way that they appear in standard corporate accounts, which reflects the fact that NI Water is a government-owned, contractor-operated (GOCO) company. Equally important is the fact that NI Water is accounted for in the way in which the Treasury manages public expenditure. That requires the Executive to have budget cover or expenditure limits for NI Water's resource and capital spend. The spending of NI Water in its current form as a non-departmental public body (NDPB) counts towards the Department for Infrastructure's budget cover and therefore that of the Executive, so it competes for public finances with all the other services funded by the Executive.
The key takeaway is that what NI Water can spend in practice is based not on the cash that is available to it or its ability to borrow and bring more in but on the amount of budget cover and the expenditure limit of the Department that NI Water has access to. For example, the fact that NI Water's accounts show that it makes a profit and pays a dividend does not suggest that there is automatically money there that could be spent on services.
The other key thing to bear in mind about NI Water is that it has a natural monopoly. Therefore, you cannot have lots of competing providers of domestic water and sewerage services. As a result, it is regulated by the Utility Regulator to protect consumers. The regulator sets out the targets and efficiencies that NI Water has to achieve and the profit that it can make. It also indicates the amount of budget cover that, it thinks, NI Water needs to fulfil its statutory and regulatory obligations. That means that, in a sense, you can think about the adequacy of funding for NI Water in two ways. First, does it get the money that, the Utility Regulator thinks, it needs to fulfil the regulatory requirements? Secondly and more broadly, are those requirements set in such a way that they will serve the public good, such as by providing enough investment in infrastructure?
The first point to make on that is that there is no guarantee that NI Water receives all the money that, the regulator thinks, is necessary. If you look at recent history, you will see that there have been years in which, essentially, DFI has said, "I'm afraid that there is not enough money to provide you with that amount", and, therefore, NI Water has to prioritise accordingly.
If you look at the way in which the contracts, which are called "price controls", between the regulator and NI Water are set up, you will see that the first two of those — they run over multiple years — were really about trying to increase the efficiency of Northern Ireland Water relative to its English and Welsh counterparts. That was quite successful. More recently, those price control contracts have focused more on longer-term sustainability and have involved a big increase in potential investment. There has been quite an improvement in the relative efficiency of Northern Ireland Water compared with its English and Welsh counterparts, but one thing that is worth noting is that Ofwat, the regulator in England and Wales, has said that the water companies there need a lot more resource to invest over the next few years and has basically sanctioned quite big above-inflation increases in domestic and non-domestic charges for water consumers in those places. However, because of the reliance on subsidy from the Department for Infrastructure, it would be hard to provide that same flow of additional money for investment for NI Water.
Think about the rationale for having greater investment in and greater financial resources for NI Water. In addition to the services-to-customers, public health and environmental considerations, there is a long-standing belief that inadequate waste water and sewerage infrastructure is a meaningful constraint on the ability to do residential and commercial development around Belfast and elsewhere and that that holds back economic growth. That is another reason why it might be desirable to get more resources into NI Water. Various options and ways to do that are talked about, and the perennial one is domestic water charging. As I say, that has been deferred, and it remains the view of current Ministers that it is not desirable. Obviously, it would place additional financial burdens on households. DFI estimates that, if you had had domestic water charging, in 2022-23 it would probably have freed up about £300 million of additional budget cover. NI Water says that, if you look at more recent years, the figure is probably £450 million or so. Clearly, there would be that potential to bring more resourcing in.
It is possible that, if you had some domestic water charging while retaining government control, you would see NI Water moving from being a non-departmental public body to being a public corporation like Translink. It is still then ultimately constrained by the budget cover that it can get from DFI and from the Executive more broadly, although what scores towards that changes in a complicated way that we probably do not need to go into. It is less about what it spends than the capital financing and subsidy that it receives. If you were to move NI Water into the private sector, that would remove that need for budget cover, but, obviously, there would then be greater potential to bring in more money from external borrowing. However, that would certainly not be without risk, and you do not need to look far — at the English and Welsh companies — to see how some of those risks manifest themselves.
Other possibilities for bringing more money into NI Water would be simply to use existing budgetary mechanisms. You could increase the regional rate, for example, and use resources on that basis to bring more money into the Executive and into that area. Of course, like domestic charging, that would be an additional imposition on households, although it would fall in different ways. You could, as happens occasionally, go to the Treasury and ask for more money from the UK Government. Given the current fiscal position and the fact that the Treasury has concerns about the relative treatment of different parts of the UK, that approach would not be likely to be terribly successful. From a public policy point of view, the bottom line is that the fundamental constraint on NI Water is a budget cover one. Even if NI Water had cash on hand or access to borrowing, it could not spend the money unless it had the budget cover in the Department for Infrastructure's budget to do so. You really need to have some form of bringing in additional revenue to be able to spend here, rather than accounting sleight of hand. Any of those models would, in all probability, put a greater burden on households, but, if no action is taken, there will be consequences for households when it comes to the quality of the services that they receive and the scope for commercial and residential development, which, obviously, would be of benefit to households and to the economy as a whole.
That was a bit of a canter through, but, hopefully, it was of help.
The Chairperson (Mrs Erskine): Thank you, Sir Robert. You did quite a canter through, but I think that you covered all of the main points as I was flicking through some of the things that I have highlighted in the document. I have been reading it avidly during the past week, looking through the things that you have discussed.
I will kick off with some questions. You may or may not have realised this, but your report got some traction in the Assembly Chamber in the past week. It was raised during Finance questions this week, and I noted the Finance Minister's comments. I am paraphrasing, but he said that the report makes no real recommendations about what should be done. Do you dispute that? My reading of it is that you are asking the Executive to implement domestic water charging.
Sir Robert Chote: The role of the council is more about explaining the trade-offs and the choices that confront the Executive, rather than saying, "This is the one that you ought to take". It is about trying to clarify the position. The report does not explicitly say, "There is no alternative to domestic water charging"; essentially, it says that, if you want to have greater investment in the water and sewerage sector in Northern Ireland, for which there appear to be good and compelling arguments, partly to match what might be happening in England and Wales but also to deal with the local specific challenges of development, you have to bring in more revenue. There are different ways in which you could do that, and those are, ultimately, choices for the Executive and the Assembly to make. Aside from domestic water charging, the regional rate is the only really major tax lever that the Executive have available to them. Obviously, they have fewer tax-raising powers than the devolved Administrations in Scotland and Wales. Those are their choices. The alternative is to do nothing and look at the way in which development will likely be constrained and the potential consequences for environmental and public health performance etc. Those are the choices that confront the Executive. There will be other ones on the margins. Our role is to say, "These are the things you have to choose between and decide about", rather than saying, "This is how you ought to make those political choices", but colleagues may want to expand on that.
"the business community, local councils, political parties, and the NI Civil Service and public bodies".
Can you provide a brief breakdown of the number of people you engaged with during the process? How long did it take the Fiscal Council to look at the issue and report on it?
Sir Robert Chote: It certainly took quite a long time, partly because we did not realise quite how complicated the different financial lenses through which you have to look at NI Water are or appreciate the complexities of how different sorts of public body are treated under the Treasury's accounting public expenditure control rules. There were lots of conversations with the Department, NI Water and the regulator. We talked to the Treasury about whether we had the correct understanding of how the expenditure rules work. There were quite a few conversations with external business community stakeholders, not merely in the preparation of the report. In most of the conversations I have had since taking on this role, even when we have not been doing a report, I have not had to wait for long for issues such as domestic water charging to come up. The issue of the need for greater investment in order to improve infrastructure to bring about a better environment for commercial and domestic development has been a consistent theme that has come back.
Sir Robert Chote: I might ask Jonathan to come in in a minute. Obviously, with this, NI Water itself, the Department for Infrastructure and the Utility Regulator are the key players in the price control, regulatory and funding process. Then, as I said, you obviously also have the Treasury setting the rules around that, so we have had useful and productive conversations with all of those, and they have been patient in coming back when we have said, "We do not quite understand this. Can you help clarify that?". Jonathan, do you want to add anything on that engagement?
Mr Jonathan McAdams (Northern Ireland Fiscal Council): Yes. To flag the level of engagement that we have, we have terms of reference with each of the Departments. It is usually at finance director level that we engage with Departments. As Robert says, Infrastructure and Finance are the two that we have had most engagement with over the last 18 months while we have been working on the report. As well as the report itself or sections of it, there have been occasions where we have gone to them with some quite extensive information requests, and they have been very helpful. As Robert says, the relationship there is constructive. We have also shared some shorter, technical papers on aspects of this, such as the issue of what would happen if it were changed to a public corporation rather than a non-departmental public body. Over the last 18 months, there have been extensive relationships and information requests, especially to Infrastructure and Finance, as well as Departments in Whitehall, like Treasury, on certain matters of expertise.
The Chairperson (Mrs Erskine): Yes. Thank you for that. In your report, you talked about an infrastructure levy. I am interested to know how that would or could work in practice, because "infrastructure levy" can mean an awful lot of things. You also talked about the competing nature of things like budgets and in-year monitoring rounds. Really, NI Water is competing against road maintenance and a lot of other things. How do you envisage an infrastructure levy working in practice? I ask because it would clearly need to be ring-fenced for NI Water for it to give the revenue that it needs from a departmental point of view.
Sir Robert Chote: The first point is to echo what you said. Obviously, people will mean different things by "infrastructure levy": are you essentially talking about an increase in the regional rates, which is badged as being something — either domestic or non-domestic — that would move in that direction? Of course, some people would also think about contributions that developers would make, when there are existing contributions when new work happens for access to infrastructure. Might you want to do more on that basis? There are different models for different versions of that.
Jonathan, again, I do not know whether there is anything that you want to expand on on that.
Essentially, one important differentiation is that, if you are thinking about things that are just an additional imposition or a contribution when you have got some new development coming along, will that generate the amounts of money that NI Water and others have been talking about as the need, for example, for above-average expenditure over an 18-year period if you are really going to deal with the backlog of development constraints, rather than something that is essentially a broader charge but clearly badged in that direction? Jonathan may be able to expand.
Mr McAdams: There is one technical aspect to an infrastructure levy that I want to flag. We talked earlier about whether the corporate model is important. If the infrastructure levy were collected as part of general taxation, say by the Department or by the Executive, and provided, as you say, as a ring-fenced addition to the subsidy, it would probably be unlikely to be treated as sales by the Office for National Statistics (ONS).That means that, even if Northern Ireland Water was now receiving enough money to cover more than 50% of its costs, it would not pass the market test, so it could not move from being an NDPB to a public corporation. As we said, there are pros and cons to both models, but an infrastructure levy would probably constrain it to remain an NDPB.
I see that Alan wants to jump in, so I will be quiet.
Professor Alan Barrett (Northern Ireland Fiscal Council): Thanks, Jonathan. I have a quick point on development levies. Politicians are often attracted to development levies by the idea that they put the burden on business as opposed to households. We all understand that people want to avoid putting burdens on households. However, we should always be aware that it is always perfectly possible that development levies merely get added to the price of housing, so that households ultimately pay the development levy.
I was struck, Chair, by your question on recommendations. As Robert clearly pointed out, we do not make recommendations, but the report is rather good at pointing out things that are not real solutions. When we started this, I could have been persuaded that there were corporate structures — a way of doing this — that would free the budgetary envelope to a certain degree, but that appears not to be the case, and it comes back to the issue of charging somebody. I will add to that point that the incidence of development levies could ultimately be on the homeowners.
The Chairperson (Mrs Erskine): Thank you, Alan and Jonathan. That is an interesting point, particularly as we will be looking at the developer-led contribution model that the Minister is bringing forward. We are waiting for the outworkings of the consultation at the minute. It is an interesting point to bear in mind.
I will move on, because I do not want to take up too much time, and I know that other members want to ask questions.
I was struck by your discussion of development constraints in areas on page 32. You noted that the Northern Ireland Audit Office (NIAO) mentioned that:
"Some have questioned the extent to which the restrictions being applied are entirely merited, and do not feel they are presented with appropriate evidence by NI Water to justify the restrictions currently applied."
It was indicated that that might be a tactic in relation to the Executive and the Budget-setting process. From the Fiscal Council's point of view, did you see any evidence that pointed to that?
Sir Robert Chote: No. It was interesting that the NIAO thought that that was worth mentioning in its report, so we flagged it. We had not spoken about it, but then we were not searching in that area for much more evidence on that front. Again, I will yield to people with greater local knowledge, but we noted it essentially because the NI Audit Office felt that it was worth pointing out. We did not hear a great deal about that in detail from the stakeholders whom we spoke to, but the issue seemed worth flagging. In general, among a wide range of stakeholders from councils and businesses, the idea seems to be widely held that there is a constraint on something that is potentially economically valuable and valuable to people and businesses. The concern that the NIAO flagged does not undermine the overall sense that there is a concern that needs to be addressed, but, again, I am happy to yield to anybody who has heard more in that area.
The Chairperson (Mrs Erskine): Does anybody want to add to that? No? OK.
Lastly from me at this stage, you said that the set-up and administration costs of introducing domestic water charges could be significant. Did you do any modelling of what those costs might look like, should the Executive look towards doing that?
Sir Robert Chote: No, we did nothing other than note that. There is the Scottish experience. It would depend in part on how you implemented charging if you were to go down that route. If you are having metering, there are issues around the need for metering. You do not have to do it on that basis if you have, say, a charge based more on the property rather than the consumption of water. If you did not do metering, you would probably still have costs involved in ensuring that you were collecting and dealing with debts as well. It would depend on exactly how you did it. We did not go into a detailed examination of the options around that.
Mr Boylan: Thank you very much for presenting to us today. I am sorry that I did not get the opportunity to chat to you, but maybe I will take that offer up again at some point.
Everybody thinks that domestic water charges would be a panacea, which they are not. We have seen the challenges that the likes of Thames Water and Welsh Water have faced. Your report is gauged towards bridging the gap in funding rather than looking at a model. There may not be a model; I do not know. As part of your findings or as part of the conversation, is there a model other than domestic water charges, or have you seen anything that could be introduced?
Sir Robert Chote: There are different models in different places. As I said, there is effectively a choice between a domestic water charge and the other obvious one, which would be a supplement to the regional rate. It depends a bit on what incentives you are trying to send people. Are you looking for a way of raising money in a relatively efficient way across different households or something that will also change the way in which people efficiently consume water? There are different ways of doing this that are not just about how much money could be raised but about what behavioural changes you are trying to get. The Republic — Alan will know much more about this — looked at an excess use charge. That would not have had many people paying a water charge, but there would have been one for, I think, consumption depending on size of household. However, the Government there decided not to proceed with that. That is another example of a model that was, at least, thought about if not actually tried.
Alan, do you want to say anything about other models?
Professor Barrett: I will go back to Mr Boylan's introductory remarks. The starting point was the idea that charging did not guarantee an efficient and sensible model. That is absolutely true, but the flip side of that also applies in that it is hard to see efficient models that do not have charging. That is a necessary condition but not necessarily a sufficient condition. You will all understand that, still scarred by the discussions and debates that happened in the Republic about 10 years ago.
The issue of conservation is important. One reason why we struggle on water is that the levels of wastage are pretty enormous in circumstances where people face no incentive to conserve. That was at a really bad time in the South, so the rationale for charging was more about making money. There was a big coalition against water charges, but there was a coalition in favour, which was all about sensible management of a critical resource, namely water. As Robert said — people may be familiar with this — there was a series of amended structures and tweaks to the proposed structure of charging. What was eventually arrived at was a system whereby you would have to have had truly enormous water usage before you paid any charge. It really was one of those political fudges that got us nowhere. I would just put back on the agenda the idea that, with any utility, as you can imagine, when you simply give away the product, it is very hard to manage the product. It is almost certainly the case that capacity requirements are much larger because of the absence of charging. Let me also be clear that I know that it is easy for people like me, Robert and Maureen to say that and I understand your dilemma as politicians.
Mr Boylan: I appreciate that, Alan. Thanks for the honesty. No matter what the model, there will always be problems and challenges.
I want to make two more points. I want to talk about the rates, because, clearly, people have paid for water through their rates for years. We have never got an exact figure for what we have paid, but, on average, it is £1,239. The Minister said in the Chamber the other day that the average water bill would be £590 — roughly 50% on the average household bill. Going by what you say and what people are reading from the report, that is exactly what is coming out of the report: that you would put that burden on ordinary households and families, which would certainly not be acceptable to Sinn Féin. Ultimately, Robert, you mentioned the economy, and that would seriously impact on the economy and whether people could reach those targets.
Ms Maureen O'Reilly (Northern Ireland Fiscal Council): Can I come in there, Cathal?
Ms O'Reilly: One of the narratives has been that we already pay water charges. The figure that you just provided is around 54% of the average water charges paid in England, Scotland and Wales. The £590 payment per household that we discussed would take the figure up to around 80%. I appreciate that there are issues around household disposable income and what that means, but we are not paying that kind of contribution and, arguably, the gap will only get wider. As Robert said, there will be higher charges in the future because of the issues with the water companies in England. That just sets some context around what we actually pay.
Sir Robert Chote: The other point to make is that households are affected by this whether you do or you do not. One of the consequences of not having domestic charging is that £300 million, according to DFI, a couple of years ago or £450 million over the second half of the current price control period, according to NI Water, essentially has to come out of the Executive's Budget that could be spent on something else. It could be spent on water, health provision, education or a whole lot of other things. It comes out of that block, and the choice, which is a legitimate decision for politicians to make, is, "We don't want to have this charge, but, as a consequence, we are going to take it out of the pot of money from regional rates and the block grant that we have available to spend in all the other Departments and all the other things that one might want to care about, and that has consequences as well".
Households are already being affected in different ways by the fact that there are no charges here. To be clear, the £590 figure comes from the Utility Regulator, which calculates a notional average charge for households. Obviously, if you were to implement charging, one set of discussions that, I am sure, you would want to have is around whether you might want to structure the charges to protect less well-off households. That would obviously reduce the amount of money that is brought in, but it would be a legitimate thing for the Executive to think about, if they were to decide to go down that road. Obviously, I am conscious that there is not much appetite for that at the moment.
Mr Boylan: That leads me on to my final point, and it definitely is my final point. I have been around a long time and seen all the price controls, and we have invested a lot of money over the last 17 or 18 years. Last week, the Department talked about an indicative allocation of £350 million, and the Utility Regulator said it would be £500 million for this year, but then they say that only £405 million could be spent this year if it was given that amount. Is it reasonable to think that, within the in-year allocation across the board, we can cover the £50 million funding gap for the year? That is what the Minister is looking at in terms of increased investment.
It is no different from reaching that target for the year. You were talking about bridging the gap. There is an opportunity for this year. I know that we can get into multi-year Budgets and everything else, including more security, but that is what we hear for this year. Rather than just impose charges, there is, maybe, an opportunity this year to secure that. My point really is this: the Utility Regulator has a certain role, but are what NIW is putting in the development plan and the Utility Regulator's responsibilities marrying up?
Sir Robert Chote: There is a slightly complicated relationship. The regulator, essentially, has to come up with an answer, but it is doing that, in part, on the basis of guidance — statutory guidance or guidance under statute — that comes from the Department and what NI Water says about business plans. NI Water may, for example, say that, even if you gave it all the budget cover in the world, there is only so far and so fast that you can move some of these things.
In terms of what goes on in-year, the Northern Ireland Audit Office picked up on the point about the challenges for NI Water. The challenge is not merely that it sometimes does not get all the money in a particular year that, the Utility Regulator thinks, would be desirable. It is also sometimes the fact that, when it gets more money, it is basically handed out in the middle of the year because of the way in which the wider budget process is managed. That creates awkward incentives as well, because it is hard for NI Water to plan when it is still waiting, at the tail end of the year, to know whether additional money will come in. The Audit Office also noted that it creates an awkward incentive for NI Water to be cautious and then to backload capital and other spending towards the end of the year.
The overall picture is that there is no guarantee that NI Water will get all the money that, the Utility Regulator says, it ought to get, and, sometimes, if it comes, it comes late in the year. That is not the best basis on which to think about how to spend it most productively and most sensibly when you know that there will be a doubt about what will come along in the following year.
I will go to colleagues on the specific figures that were quoted most recently. I am not sure whether Jonathan or others have any insights on that. I am not fully sighted on the numbers that you quoted.
Mr McAdams: I can build on what Sir Robert said about there being two thresholds: there is the amount that NI Water should get and then, sometimes, the amount that it could get. Northern Ireland Water said to us that that is a real constraint on how quickly it could build. It is a bit like the health service. Even if you threw an infinite amount of money at it, there are other constraints in the system that will affect how quickly capital expansions could be delivered. Northern Ireland Water talks about an 18-year period of heightened investment in order to remove or deal with the development constraints. The Utility Regulator did not say to us explicitly whether it agreed with an 18-year period, but, in general, the Utility Regulator agreed with the idea that there would need to be more investment over a long period in order to see radical change in where the development constraints are.
Mr Boylan: OK. Thank you very much for your responses.
Mr McMurray: Thank you very much for presenting today and last week. It was really thought-provoking and a lot to get through.
One of the things that struck me from the presentation last week — we have touched on it a wee bit already — is the fact that the link between NI Water funding and the regional rate has been broken since 1998. Could you talk us through that in a bit more detail? How did that happen, and what are the implications? It comes back to the perception that we pay for our water through rates, but, in actuality, we do not. If you could talk us through that, that would be useful — for me anyway.
Sir Robert Chote: As you say, for a long period, the widespread perception has been that people already pay through rates. That has been a key part of the debate and is why moving in this direction has been more complicated than it otherwise would have been.
Concerning the formal break in 1998, when the Executive were restored shortly after the creation of NI Water, they convened an independent water panel to do a study, and one of the questions that the panel was tasked with was, "Is it true, as often people say, that we are already paying?". The point that the panel made was that not only was the link formally broken in 1998 but that, because people did not see their rates bill fall when it was broken, it is not surprising that people did not realise that, suddenly, this was no longer there and there was no pot of money that had suddenly become freed up because you had broken the link and you were no longer paying for water on that basis. Look at what the Executive were saying shortly after that. They were implicitly saying that, yes, it was partly paid for out of the rates. It is a semi-theological question. Formally, I do not think that that link is there, but that argument has been made for an extended period.
Coming back to Maureen's point, if you look at the total amount paid in water charges plus council tax in England and Wales versus the regional rate, you find that the regional rate is not vastly larger here to reflect the fact that it has the water charges implicitly in it as well. It is lower on average than in the other parts of the UK, but then, of course, so are incomes and house prices in the same way, and therefore drawing that distinction is clearly not straightforward. However, the formality of it is that, if the independent panel was right, the link was broken many years ago.
Mr McMurray: Thank you. Again, on reading the report, I see a lot of talk about loans and subsidies. It is quite financially based. I am just trying to get my head around that. The report states that the first DFI loan to NI Water is due to mature in 2027 and that Northern Ireland Water has two options: refinancing the debt with new borrowing or a debt-for-equity swap. Can you comment further on the debt-for-equity swap option? How does that work with DFI being already the sole shareholder?
Sir Robert Chote: The first point to come back to is that borrowing is, obviously, a way of bringing more cash in, but, fundamentally, it is the budget cover and the way in which NI Water counts towards DFI's part of the departmental expenditure limit (DEL) that determines what it can spend primarily. Changing how much money is flowing in from the loan notes will not change that crucial determinant of the scope spend.
At the moment, essentially, NI Water could, in principle, borrow from the private sector if it wanted to, but there is not much point in doing so if you have essentially not got unspent budget cover to use. Therefore, at the moment, it is partly financing its investment by borrowing from DFI. As you rightly point out, DFI is in this odd position: it is the sole shareholder of NI Water, the sole creditor, the largest source of income from subsidy and the second-largest source of income because of the money that comes via DFI Roads for run-off as well. Therefore, thinking about it as a conventional private-sector company, borrowing to spread its costs over time, it does not look quite the same.
The loans that NI Water has at the moment are not formally structured in a way that requires debt repayment, which is why some people ask, "Is this really a sort of loan in a private-sector way, or is it essentially another way of providing a subsidy?". Therefore, if you were to have a debt-for-equity swap, it is my understanding — I get onto thin ice here in my understanding — that it will increase the value of DFI's already 100% shareholding in NI Water. It would have consequences in the amount of money that is flowing back, but, essentially, NI Water and DFI are both in the public sector, and so it is not bringing in additional resources in that way. Again, I yield to Jonathan or others, if I have misspoken or they think there are things to add.
Mr McAdams: I might just add, to go back to Robert's first point, that what we are talking about here is cash, and it does not really affect Northern Ireland Water's spending power or the Department's. I will come back with a caveat on that in a second.
Effectively, if Northern Ireland Water borrows a lot of additional money from the banks or the Department, as Robert said, that is cash that is sitting in its account. It is not allowed to spend that cash; it is not allowed to move that cash outside the public sector unless it has the budget cover to do so. That is the thing that constrains it at the moment. To put it another way, handing that cash back to the Department is not a detriment to Northern Ireland Water, because it could not spend it anyway. They are flows of cash, but they are both in the public sector. If I am in the public sector and my friends are in the public sector and I give them a fiver and they give it back to me, the money has not left the public sector. It is a bit of a technicality, if you like. That is the space that this is in.
The caveat is that, if the restructuring or refinancing of the loans changes the level of charging that Northern Ireland Water raises on the non-domestic side — if it decreases the level of charge, for example — there would need to be more subsidy from the Department to make up for the lower income. That is where these start to get more than just technical. The Department will need to talk you through these, because that is the limit of my knowledge. Where such options as an equity swap or the restructuring or refinancing of the loan change the rate of interest due, the Utility Regulator takes that into account, and, if a lower rate of interest is due, the Utility Regulator would allow for lower charges on the non-domestic customers. That might mean that more subsidy is required from the Department. It is very technical, but that is where it gets different and where there are differences between the two options.
Mr McMurray: Thank you for that. I am going back to what Sir Robert said about financing investment through borrowing. Does that mean that you are essentially borrowing money that you have already spent? Have I picked that up wrong?
Sir Robert Chote: No. It is another sort of cash flow from the Department to NI Water. Some of it comes in subsidy, and some is lent by NI Water — obviously, that would be more on the capital side than on the day-to-day resource spending side. As I have said, there is also a flow of money into NI Water via DFI Roads to deal with run-off. In a sense, there are different ways in which money flows between the Department and NI Water. As we have said, it is the overall budget cover constraint and what NI Water can do within the DFI envelope that matters. If NI Water were to be investing more for a given DFI envelope, somebody else would have to invest less. There is not traditional constraint there.
Miss Brogan: Yes, Chair. Thank you, folks, for your presentation. It has been helpful. It highlights the issues that, we all know, exist. NI Water has been underfunded, and British austerity for the past 15 years has been a contributing factor to that and has had a significant impact on the economy and, as you mentioned, Robert, our ability to build houses and that type of thing. It affects all areas. We need to have an approach to combat that.
You will know that the Infrastructure Minister, Liz Kimmins, has a three-pronged approach to improving the waste water infrastructure. She wants to increase investment at Executive level; there is talk about developer contributions, and that is out for consultation; and she wants to introduce a Bill to improve sustainable drainage systems.
Robert, you and I have spoken before: I was on the Finance Committee when we talked about the interim fiscal framework. At that stage, Caoimhe Archibald, who was Finance Minister, secured the level of need for the North at 124%.
Miss Brogan: Surely. Robert mentioned that maybe we should not seek more funding for that, but the Holtham report said that the level of need was up to 132%. How can we seek more funding for that?
I have two specific questions. Have domestic water charges affected the performance of Thames Water and Welsh Water, and is there any funding model that would not have its challenges and problems?
Sir Robert Chote: If you look at the English and Welsh situation, most recently, Ofwat has been pretty clear that there needs to be more investment in the water companies in England and Wales. Welsh Water is pretty much in the same camp. We noted that, for some reasons, mutualisation looks more attractive in some respects than privatisation, given the sense that money would flow back and the business would be run in the interests of customers. The view of Ofwat is not that Welsh Water performs particularly better than the privatised companies. Obviously, that is only one example, so we would not want to go so far as drawing a clear conclusion that no mutual will perform better than a privatised entity, because there is no clear evidence of that.
The view that Ofwat has taken is that the English and Welsh companies essentially need to be able to increase their charges on domestic and non-domestic customers by well above inflation for five years, principally to deliver on the environmental and public health requirements. There is no easy way to see how the current structure and funding model for NI Water could do that. You might be willing to say, "Let us take the non-domestic customers who are already paying charges and ask them to pay 6% more per year in real terms.". However, if you were to increase the notional domestic charge, DFI would not have the budget cover to rise by 6% a year in real terms to be able to give that to NI Water without hurting the amount of money that it can provide to other people on that front.
Sorry, can you remind me of your first question? It has slipped out of my head.
Miss Brogan: It was basically about the funding model and how each approach will have its challenges and problems.
Sir Robert Chote: Yes, absolutely, and some of that comes back to the fact that funding models have different roles, as Alan discussed with you before. There is not only the question of whether you have a model that provides some additional resources to the Executive. As you rightly imply, the Executive's total amount of available capital spending and resource spending is largely determined by the amount of block grant that they get from the UK Government. There is the scope to do a bit of borrowing for capital and to raise regional rates for resources, but both of those are relatively small when compared with the size of the overall block grant. The model that you have at the moment is one in which, in order not to have domestic water charges, you have to take some money out of the Executive's overall Budget that could be spent on something else, either putting more money into the water and sewerage industry or putting it into Communities, Education or Health. At the end of the day, those are the constraints and the choices that the Executive are left to make. Households, consumers and families are affected by those choices one way or another. If you do not have additional cash coming in somehow, you have the consequences of less housebuilding than you would like, lower-quality services or environmental and public health outcomes. Those are the choices implicitly or explicitly.
Miss Brogan: That is great, Robert, thank you for that. It is clear that there is no quick or easy option. Thank you.
Sir Robert Chote: Seventeen years on from the decision not to have charges, you can see that "no quick answer" is an understatement.
Professor Barrett: Yes, just a 30-second intervention in response to Miss Brogan's question about whether there is a good model. One of the things that struck me in the discussion around all this is that we are very focused on how things are done in Great Britain and on the island of Ireland. You could make a case that, on the island of Ireland, we have water systems where we just give all the water away, which is rarely a great idea. There is a particularly radical form of privatisation in England, but you could argue that that has not worked terribly well either. There are lots of places in continental Europe — perhaps some of you have lived in various parts of continental Europe — and the United States where the water flows in and the bills flow out, and it all works. There are probably a load of models out there that work rather seamlessly; it is just that we are closer to the ones that are particularly dysfunctional.
The Chairperson (Mrs Erskine): That is a good point. The Committee received a research paper that looked at models elsewhere in Europe. It has been interesting to look at the research.
Mr Dunne: Thank you, folks, for your work and your presentation. Obviously, considerable work has gone into it. Have you had any engagement or is any planned with the Infrastructure Minister or any other member of the Executive? Jonathan mentioned engagement at official level. It is positive and helpful to have the report, but it was not designed to sit on a shelf somewhere.
Sir Robert Chote: As is the case with all of our reports, we are happy to talk to anybody who would find it useful. Jonathan may know whether we have had any particular approach from the Minister. We are delighted to be here, talking to you about it. The launch was an opportunity to engage with a lot of different sorts of stakeholders. I very much thank those of you who came along to that. We are keen to talk to whomever would find that helpful.
Jonathan, has there been any particular engagement request that we have had so far that is appropriate to flag up?
Mr McAdams: No, there is nothing to flag up.
Mr Dunne: It is alarming that the Infrastructure Minister has not reached out to you, given your expertise and the work that you have done on the report and the significance of the issue. As you outlined, it impacts on so many issues across our country. I hope that that will be explored further.
You mentioned in the report that you have a second stream of work. I presume that that is under way or shortly will be. Is there a time frame for that or for a further report?
Sir Robert Chote: Not at this stage. We thought about the second string of requirements on the council. The first thing is to try to explain how the Executive are or are not balancing their Budget, which, as you know, we do on an ongoing basis. On longer-term sustainability, we did the work that led to the discussion about the 124% needs figure and how you think about sustainability in the context of a jurisdiction that has the taxing and borrowing powers that Northern Ireland does. The next focus was on health, which is by far the largest part of the current resource day-to-day budget for the Executive. We felt that infrastructure was the next most logical one to turn to. Something on infrastructure more generally, such as where capital spending is going, might be where we turn to next. The other one is Translink and transport. At the moment, we have no concrete timetable on that. That is partly a consequence of the fact that it is not yet clear where the council will be in terms of its legal status and membership over the coming months, so we do not want to embark on a long-running piece of work and then discover that the whole committee will be turned over in the middle of the process. Hopefully, something on the more general infrastructure and capital budgets will be the next one along the line.
Mr Dunne: Obviously, our businesses pay water rates. Has there been a comparison between the amount that they pay and what businesses pay in the rest of the UK?
Sir Robert Chote: Maureen might be able to help you on that one.
Ms O'Reilly: Yes. We do not explicitly look at it in the report. We have not looked at it, but it is obviously something that is gaining momentum, particularly with the developer contributions piece and what that might do. There is a business lobby around the fact that it arguably puts an increased burden on businesses. Through the report, we have seen consultation around the fact that, in spite of that levy, it is starting to damage investment, not just in housing. You see it in some of the consultation around expansion of indigenous and foreign-owned companies in Northern Ireland and what that has meant. We have not looked at it explicitly, but it is obviously a next step from a policy perspective on what that does to incentivise — or not — how the business or company develops.
Mr McReynolds: Alan has actually taken my first question, so could you build on what you said, Alan? Does anywhere in the world provide water in the way that we do? I have looked into that as well and have not seen many other countries approach it in the way that we do. Can you speak to that?
Professor Barrett: I cannot claim to be an expert on it, but the notion of a completely free-at-the-point-of-use supply of water strikes me as somewhat unusual. It may be possible for people to point to examples of that elsewhere, but I cannot think of that many beyond these islands. Again, going on personal experience, in a lot of places where people live, their water bill comes in and that is just part of life. Apart from that, I cannot claim to have specific expertise, so I had better not try to point to anything beyond that.
Mr McReynolds: Secondly, Maureen, you said that we pay, I think, 54% less. Are you able to put a figure on what we might be paying per household, roughly, on average? I remember looking into that a decade or so ago. The figure that was commonly stated was that households were paying £160. Are you able to update that figure on what we pay, roughly, now? Obviously, we are unaware of what we pay.
Ms O'Reilly: The average annual bill is just over £1,200 per household in Northern Ireland. It ranges from about £1,400 in Scotland to £1,900 in Wales. England is in between. Those are the average council rates. We sit at the £1,200 per household mark. When you take the water charges on top of those figures, you head up to and over £2,000 on average for England and Wales. That is the differential that exists. As I said, you would want to put that in the context of the disposable income of households, but it gives you an average, when looking at the issue of whether we already pay for water charges indirectly through our rates.
Sir Robert Chote: If, by any chance, you have the report to hand, look at the table on page 37. You will see that we have tried to pull together the most recent information on the average council tax or rates per dwelling and water and sewerage. The numbers are as Maureen described them. We also put in the average household disposable income, which shows that part of the explanation for why you would expect bills to be lower in Northern Ireland, on average, in total, is that you have lower average household disposable income. Nonetheless, that would probably still be true if you had some domestic charging put on top as well.
Ms O'Reilly: It is something that really needs to be watched, because those additional charges will be put on households. Our rates, in real terms, have not moved for the past year or so, whereas, when you start to look at the kind of movement in England and Wales on average charges, for example, you will see those go up and that gap widen over time.
Mr McReynolds: OK. Nicola mentioned England and Wales earlier. Does the Scottish model not have measures in place to protect people who may struggle if something like this were implemented? How is the Scottish model set up, and how are they able to work within that to ensure that people are protected as much as possible?
Sir Robert Chote: I will yield to any colleagues who have more detail on how the Scottish system operates, but, as we said a couple of answers ago, if you were to introduce charging, it is pretty likely that you would need to do some sort of structuring of the charge or have some sort of way of ensuring that the poorest households were protected or cushioned to some degree. That would, depending on how generous that was, reduce the amount of money that you would bring in overall. I am afraid that I do not have, unless colleagues do, chapter and verse on how Scottish Water does that or how the Scottish Government do that.
Mr McAdams: Page 35 of the report contains a table that summarises, at the high level, the differences between the jurisdictions. In Scotland, the model is that it is a government-owned company, or public corporation. That is, perhaps, more similar to what we have here, and there has not been the same level of criticism as maybe there is of England and Wales. Obviously, Scotland still charges domestic customers.
Sir Robert Chote: The key thing in Scotland is that there is a choice. You can either choose to have it, essentially, as something that is added to your council tax, which, presumably, therefore, is more related to property value, or you can choose to have it metered.
Mr McReynolds: I attended last week, and my main takeaway was about the cost of not doing anything and the impact that that is having. Obviously, for the past 17 years, the same discussions have been taking place and the elephant in the room is that we are not addressing major issues in Northern Ireland Water. Your report lays that bare. I talk regularly at Committee and in the Chamber about the human waste that we see in Belfast lough and burst storm overflows leading to human waste in the roads as well. I talk about the impact that it is having on our economy because of the lack of ability to build housing, and I talk about the jobs that could be created but are not. Did you look at the impact that the lack of action is having on not addressing the issue?
Sir Robert Chote: Implicitly, that partly comes through the length of time that it is estimated that you would need to have increased investment to clear the backlog and to sort out the areas of Northern Ireland where there are serious constraints on potential development. Somewhere in the report — I now cannot remember where — we quoted an estimate of the job implications of the development constraints, but we were referring to a study from some time ago. You are absolutely right to say that it is important to consider the consequences for households and families' well-being of inaction as well as action because of where resources are diverted and because less is being spent on dealing with development bottlenecks and, arguably, on public health and environmental outcomes. The rationale for Ofwat deciding that big real increases in charges is necessary in England and Wales may, in part, be implicitly down to the fact that there is a lot of concern around the performance of those companies more broadly, but I think that it is also that you are going to need to do that with the greater attention that is paid to the environmental and public health considerations. You are absolutely right that there are consequences from doing nothing as well as consequences from doing something more to bring more revenue in.
Professor Barrett: I see that member Buchanan has his hand up as well.
Professor Barrett: Grand. I will go ahead. On the issue of the cost of doing nothing, in our deliberations, it struck me that, if this were happening in a European Union country, one of the mechanisms to get some action here would be for somebody to go and sue the water authority for perceived breaches of its environmental responsibilities. I have to confess that I do not know enough about the situation in Northern Ireland, but, increasingly, where legislation has been passed through a sustainability or an environmentally-friendly lens, it opens to a much greater extent the possibility of organisations, be that Friends of the Earth or whatever, to sue. Ironically, when we were talking to Northern Ireland Water, I almost put it to it whether that is something that it would borderline welcome, because it would play well for it in getting the additional resources. On the member's question about the cost of doing nothing, partly in the context of Lough Neagh and other things, I sometimes wonder whether, ultimately, the decision could potentially be taken out of the Executive and moved into the courts.
The Chairperson (Mrs Erskine): On that point, the Committee is aware of enforcement action against NI Water for alleged breaches and pollution incidents, which we also looked at.
Mr McReynolds: The AERA Minister is looking at that and making sure that Northern Ireland Water is playing its part in addressing those issues. There are a variety of reasons why our waterways and Lough Neagh are as impacted on as they are, and we are addressing those issues.
Multi-annual funding has been talked about quite a lot, and it might be a way for Northern Ireland Water to be more strategic in how it spends its budget allocation. On the matter of changing something or changing nothing, what should get more priority? Is it the revenue that is coming into Northern Ireland Water to address the issues or having a strategic focus with multi-annual funding? Would it be able to plan better with multi-annual funding, or is it still the elephant in the room that our system is completely inefficient?
Sir Robert Chote: At the end of the day, we are making the point that, fundamentally, there is a budgetary issue here and a need for more money to be found from somewhere to spend here.
On the multi-annual funding picture, one paradox is that you have price controls: the contracts that eventually end up between the Utility Regulator and NI Water. The most recent contract was over a six-year period, and that has been extended to a seven-year period. However, the Executive have had 11 single-year Budgets in a row. We are now tentatively hoping that, with the UK Government having three-year spending reviews every two years so that they overlap, there is a bit more scope for certainty over that period. At the end of the day, however, as the NI Audit Office pointed out, just because NI Water is regulated and there are legal requirements, it does not mean that it has funding that is ring-fenced or earmarked over an extended period of years.
With the finances of the Executive, you discover that, as the UK Government change their spending policy, that increases or reduces the size of the block grant, so DFI is not going to be confident about exactly how much money it will have to spend over a number of years. Therefore, there is a limited amount of confidence that you can give to NI Water, unless you were to say, "Let's ring-fence. Let's be explicitly saying that this is the first priority", but then you are simply pushing the budget volatility onto other parts of the Infrastructure Department's budget — maybe it ends up as more of an issue for Translink at that stage. Greater ability to plan over the longer term is clearly helpful and desirable. However, when the overall funding of the Executive is still affected very largely by decisions that are taken not by the Executive but by the UK Government, there is only so far that you can go with that.
Mr K Buchanan: Alan, you spoke about the developer contribution and what that would do. I heard a radio report the other day in which builders and developers were talking about that. You made the point that that money was going to be passed on to first-time homeowners. They said that that could £10,000 to £15,000. If developer contributions go ahead, is that not water charges by the back door for unfortunate young people — it will be broadly young people — who are first-time buyers?
Professor Barrett: The straight answer is yes. On the precise extent to which something such as a levy gets translated into the price of a house, there is a technical strand in the economics literature about market structure and the extent to which people are in perfectly competitive markets or in more oligopolistic markets. It is generally the question of the incidence of taxation, which often comes up. Although a tax or, in this case, a levy can be applied to one group, it can manifest to the other.
The reverse of that is that, for many years in the Republic, we had first-time buyers' grants. The argument was that that probably only increased house prices as well. The politicians liked the idea of giving young married couples or whoever a grant, but, if everybody showed up to the auction with that money in their pocket, that tended to put up bids on the house. That was really a transfer to developers in that case.
The roundabout answer is that it is likely that, if there is a development levy, it will be passed on in some shape or form and at some level.
Mr K Buchanan: I do not know whether you can answer this question directly, Alan; maybe Sir Robert can. Is the developer-led contribution a good idea?
Sir Robert Chote: It is a reasonable part of the overall picture. Looking at the amounts of money that NI Water or the Utility Regulator have implied over the longer term, the NIAO quoted a possibility of needing £350 million a year in 2021 prices over quite an extended period in order to deal with backlogs. The idea that you would get sums of money of that sort or be able to get a large contribution to that from developer contributions does not seem very likely. It could help at the margins, but it is not as much of a game changer as something bigger on regional rates or domestic charging itself. I do not know whether Alan has anything to add on that.
Professor Barrett: No, Robert. It is one of those things that I had not thought about for quite a while until we were discussing it this morning. I had better not add too significantly to my earlier remarks in case I say something incorrect.
Mr K Buchanan: Cathal mentioned a figure — I think that you did as well, Sir Robert — of approximately £590 as a notional average that would be required to accumulate £350 million. If there are approximately 841,000 households in Northern Ireland in that league, how many of those would be paying? Do you know how that equation was calculated? Roughly, how many of those households would be paying in order to equate to that £350 million? Do you know where that comes from?
Sir Robert Chote: As I said — Jonathan may be able to correct me — the £590 figure is a calculation by the Utility Regulator of what a notional average household charge would be in 2025-26. That figure is higher than it has been in the past, partly because retail price inflation has been higher than anticipated, and there is a link through on that. I am trying to remember — Jonathan may have to remind me — whether that is an average per household or an average per dwelling. Can you remember?
Mr McAdams: No. I think that it is per household, Robert, but I cannot recall. The calculations that we have done are per household.
Sir Robert Chote: The £350 million figure that I referred to a moment ago was an estimate that the Northern Ireland Audit Office attributed to NI Water as to how much money would be needed to be spent over an extended period of time in order to deal with the development constraint backlog — again, if I have not misremembered.
Mr K Buchanan: OK. I have heard different conversations, and it is hard to know whether we blame the Tories, the British Government, the Labour Government, the Finance Minister or the Infrastructure Minister. The narrative is changing: it used to be the bad old Tories, and now it is the British Government. We now have a Labour Government, however, so we will see what changes they make. I have no doubt that we will see how the conversations that the Finance Minister had on the comprehensive spending review a few weeks ago will develop into money on the ground and solutions. Thank you, gentlemen and Maureen: I appreciate that.
I had two questions in my head. I could spend all day talking about this, but we have run over time, which shows the topic's importance, particularly for this Committee and for the Assembly as a whole. It impacts on so many Departments and on homes across Northern Ireland.
You talked about the fact that you have had regular engagement and discussions with the Treasury on the funding streams. As you mentioned in your report, Treasury rules mean that NI Water cannot carry forward unspent DEL from one year to the next without permission, even though that might enhance value for money and one thing and another. It is an interesting point. My party and others have obviously been lobbying Treasury. The Executive have lobbied Treasury, and my party has looked at the level of need and spend per head of population, as we do not feel that it is adequate for Northern Ireland. In your discussions with Treasury, have the Treasury officials been agnostic to making changes regarding the ability to carry forward the unspent DEL? Essentially, they are the people who can make changes to help NI Water on that element.
Sir Robert Chote: Our discussions with Treasury officials on this have been limited to whether we understand how this rather complicated system works, rather than questioning them. I would not expect them to give me answers on how, they think, things might change. A constraint such as the inability to carry forward unused DEL into the following year is not some sort of bespoke rule that the Treasury has decided to impose on NI Water. It is the way in which it treats bodies with that sort of classification. Obviously, one challenge for the Treasury officials, if you were to make a particular case — "Could you not make it a bit easier for this particular entity to do that?" — is that you then open up a whole can of worms about whether they get similar requests for freedoms elsewhere.
In the report, we highlight a couple of examples. I think that there was one example on roads and, possibly, one on Network Rail of where there has been greater freedom, but that, typically, comes with the need to have earmarked funding at the same time. It is not, as I said, that the Treasury has decided to wield a particularly heavy baseball bat over this particular company; it is the way in which it tries to set the rules across such institutions as a whole. The spending of non-departmental public bodies and roughly the income or the financing for public corporations that scores against the Treasury rules is set at a higher level across the whole system, rather than its being particularly bespoke or aimed at disadvantaging or not advantaging Northern Ireland.
The Chairperson (Mrs Erskine): OK. I will play devil's advocate a wee bit with my next question. I know that you advise and one thing or another. It raised a smile on my face when I read, on page 25, about greater transparency around DFI's indicative and then ultimate DEL allocations. In your report, you mentioned that it is hard to keep track of how NI Water's resource DEL and capital DEL allocations, provisional allocations and worst-case scenarios evolve over time. I have to say that, from a Committee perspective, that can often be difficult as well. We are not experts in finance; we rely on looking at the figures. It was interesting to note that you said:
"If and when DfI decides not to allocate the resources necessary to meet the UR’s recommendations it should explain clearly to the public and to its Assembly Committee why it has done so."
Obviously, we are the Assembly Committee that scrutinises everything. What was it that you noticed? We know from scrutinising the budget and looking at it how difficult that can be difficult at times, but what was it that you picked up on or noticed as something that could be done differently to ensure that there is a greater level of transparency around those figures?
Sir Robert Chote: Part of the difficulty here is that, as we were trying to write a narrative of explaining, essentially, the adequacy of funding the relationship between the budget cover and what the Utility Regulator thinks is necessary, what might be in an NI Water business plan, where the decisions of DFI come out, we were having to pick around a whole lot of different documents produced for different audiences and for different purposes. All those entities are producing and doing the reporting that they are supposed to be doing, as far as I am aware, in all those different ways, but you have this complex model in which you have different lenses through which to look at things and you have determinations published by the Utility Regulator and worst- or best-case scenarios for available funding by DFI. We tried to put that together as best we could in some of the narrative that we have here; for example, in looking at successive going concern statements in NI Water's accounts to get a view of where it thinks that funding has come in above or below necessity.
Basically, if you and others have a continued interest in this subject, it is asking, for the next time that you want to go to it, rather than somebody having to scramble around and assemble all the different documents, whether it is possible to have an agreement with you, the Department, NI Water and the Utility Regulator on the numbers that you are interested in keeping an eye on as you are regularly monitoring and watching this in your activities. Is there a way to provide a regularly updated flow of those sorts of figures that would be of benefit to you rather than having to go back to square one and chase them around every time that you think that you want to ask that question?
Ms O'Reilly: Even the exercise in itself of doing the research and the report identified the challenges with trying to get information. That in itself and, hopefully, doing the report suggests a pathway forward for what should be asked and what should be on the table in trying to understand this better and faster. That is really important.
The Chairperson (Mrs Erskine): Very soon, we will be looking at the forensic accountant's report on NI Water. That comes hot on the heels of the work that you have done.
We have massively run over time today. The session was an hour and a half, I think, but it shows the importance of this. Thank you for the work that you have done on the report, which will help, from a Committee perspective, our investigation of the sustainability of NI Water. All of us want the same thing for Northern Ireland, and that is that we have a better way of doing things.
I really appreciate your time today and am sorry for keeping you. Thank you for your evidence. We greatly appreciate it.
Sir Robert Chote: Thank you for the invitation and for your interest.