Official Report: Minutes of Evidence

The Chairperson (Mr Martin): I welcome Alison and Kiera to the meeting this morning. Alison is the director of water and drainage policy, and Kiera is the director of corporate strategy and performance. I need to get Committee agreement that we record this for Hansard.

The Chairperson (Mr Martin): I invite Alison and Kiera to make a presentation of up to 10 minutes, after which we will have questions from members. The floor is yours.

Ms Kiera Lloyd (Department for Infrastructure): Thank you for the opportunity to brief the Committee on the outcome of the developer contributions for waste water infrastructure consultation. A copy of the Department's high-level summary report on the consultation responses was sent to the Committee in advance of the meeting. Hopefully, members have had a chance to read it. The report has not yet been published, though it is intended that it will be in the coming weeks. Before we get to questions, I will briefly set out the context of the consultation, say what it was about and outline the top-line findings from the responses.

The public consultation is one element of the Minister's three-pronged approach to unlocking the waste water constraints that have become one of the main barriers to increasing housing supply. It is best described as a "high-level consultation". It was designed to get an insight into what people think about the potential of the concept of developer contributions to help bridge the gap between the significant funding that the Department already provides to Northern Ireland Water (NIW) and what is needed to build on the work that is already being done to release waste water capacity to support future housing construction and wider economic development. It was not and was never intended to be a consultation on detailed policy proposals on what either a voluntary developer contribution scheme or a compulsory developer waste water infrastructure levy might look like. Should the Minister decide to proceed with developer contributions — no next steps decision has been made so far — further policy development, targeted engagement and consultation on legislation would all have to take place. That ministerial decision, when it comes, will be informed by the outcome of the consultation and, of course, any views from the Committee, which we will report.

The consultation asked consultees whether they agreed in principle that a pathway for developer contributions should be introduced and, if so, whether they preferred a voluntary or mandatory contribution model — that is, a levy. The consultation also asked some high-level questions about how a voluntary or compulsory contribution scheme might operate in practice, invited views on a number of initial impact assessments that we had carried out and asked about the factors that should be taken into account by the Department if it was designing a levy. We received 293 responses to the consultation. Of those responses, 91 were from individuals and 202 were from organisations. We received 164 responses on the Citizen Space online survey. We received 102 written responses following a standardised template by email and 27 written responses that did not follow the template.

The first question, which was about whether a pathway for introducing developer contributions should be introduced, was the only question that all 293 respondents answered or could be taken to have answered. One hundred and eighty-one respondents — 62% of respondents — disagreed that a pathway for developer contributions should be introduced, with 87 respondents or 30% agreeing that a pathway should be introduced and 23 respondents or 8% neither agreeing nor disagreeing. A lot of additional information is captured in the report.

Alison and I will welcome any questions that Committee members have about the responses that we received to the consultation or, indeed, the consultation itself.

The Chairperson (Mr Martin): Thank you very much, Kiera. Yet again, departmental officials do not get anywhere near their 10 minutes, leaving me to panic as I get my questions in order and try to bluff for the rest of the members. That was excellent; thank you very much for that. First, I highlight to members that there is a Clerk's memo in the tabled papers that is useful. I encourage members to have a quick look at that as they consider questions to the officials.

I will kick off. Kiera, you mentioned the Minister's three-pronged approach which, as far as I know — correct me if I am wrong — is delivering more money in order to solve the problem of waste water. I assume that that money is going to Northern Ireland Water, the sustainable drainage systems (SuDS) Bill and the concept or policy intent of developer contributions. Am I OK so far?

Ms Lloyd: Yes.

The Chairperson (Mr Martin): OK, fine. If we stick with the developer contributions and the consultation here, has the Department considered what quantum of money, if we are looking at the overall issue of trying to solve waste water, that policy intent would deliver?

Ms Lloyd: We have. It is certainly a question that we are asked a lot. This was a high-level consultation geared towards looking at a couple of options — a compulsory levy and a voluntary model — so it was not really possible for us to say how much additional funding would come to Northern Ireland Water as a result. The Minister has been clear from the outset — it was repeated several times in the consultation document — that this is not a big money-producing initiative; it is about bridging the gap. It is about adding to the amount of money that Northern Ireland Water receives that is targeted specifically on waste water. If you think about voluntary contributions, as we mentioned in the consultation, you see that Northern Ireland Water infrastructure upgrades cost anything from £500,000 to £10 million to £200 million. It is highly unlikely that any Northern Ireland developer would have the ability to contribute to the higher end of those figures and, if they did so, the resulting costs would just not be economically viable. However, they might be able to contribute towards the lower end of that, and that is the quantum that we are talking about.

When we looked at a compulsory levy, we were careful to steer away from any suggestion of what that might look like, because we were concerned that, if we were to put an arbitrary figure on it for the sake of a calculation, it would skew perception and people would fixate on that when we had no basis for calculating that amount. If you were to take a random figure — say 5,000 houses are built every year, perhaps, and you add a £5,000 levy to that, that would be £25 million. However, because we had no basis for what that levy might look like, we were asking people how we should calculate the levy. One of the suggestions that we got some responses on was similar to what is done in England with the infrastructure levy, which is based on square metres. If you were to do a square metre charge, that would result in a different amount. That is a long-winded way of saying that we thought about it, but we do not really know.

The Chairperson (Mr Martin): OK. That is useful. It is difficult to put a figure on those things, but you have done the best you can, and giving us that matchbook calculation of 5,000 times £5,000 is useful. Clearly, that is just a figure that you picked; I am not suggesting that it is the figure that DFI has considered.

I have a range of thoughts around this, but, certainly, if the Department took this forward, my concern would be that, if developers, either through voluntary or enforced contributions, were asked to — let us take the £5,000 figure as being slightly arbitrary: if they were building five houses, the figure would be £25,000. Is the Department not concerned that, if that levy were imposed on developers, the developers would simply impose that on the price of a house, and we would see house price inflation? It is not something that, I imagine, developers would take on themselves, so you might find that the infrastructure might be slightly better but the houses would be slightly more expensive. Do you see that as a possible consequence?

Ms Lloyd: We raised that in the consultation document, and we made it clear that there were potential impacts on the price of a house. The developer would have to make a financial viability assessment when they purchased land and looked at building houses around how viable that would be, taking into account a levy or any voluntary contribution, if, indeed, we moved down the pathway of developer contributions. There could certainly be a scenario where they chose to pass on the increase to the price of a house. The calculation is really about whether it is better to pay extra or have no connection.

A developer could be faced with a situation, as they are at the moment, where they cannot connect houses. There is no capacity in the area of the land that they own and wish to develop. They are waiting for sufficient funding to be made available for the waste water infrastructure to be upgraded to enable them to build the houses. There are a limited number of solutions that can be put in place currently under the system, but, if those are not available to developers, they do not have the ability to build the houses that connect. Therefore, putting in a place a pathway for voluntary contributions would at least enable them to see movement to enable them to build the houses and to sell the houses. The issue with the compulsory levy is that it is a pool based on need, as opposed to directly allowing a developer to contribute towards specifically unlocking their houses. Yes, in essence, as we made clear in the consultation when we asked people's views on it, it would, in most likelihood, increase the cost of a house.

The Chairperson (Mr Martin): This is my final question. In terms of house price inflation — I realise that it is just a consultation document at this point, but you mentioned that it could lead to house price rises — if this were adopted in some shape or form, what level of risk would you attach to that? The more houses you build, the more you stabilise the cost of them, so we want to build houses in Northern Ireland. Surely, if a developer has to take on a charge, they will just pass that on to house buyers. What risk do you see of house price inflation if this is adopted?

Ms Lloyd: Developers would have to do a financial viability assessment, and we were clear in the consultation that there were consequences to that, in that high-value houses might be more likely to be almost fast-tracked through a system if voluntary contributions were put in place, because developers could afford to absorb or pass on the price of a house. A house might rise in price from £350,000 to £360,000. That is not a figure to be taken at face value, but, perhaps, if a developer was building a development of 500 houses, they might see that as something that they could absorb and factor into their financial calculations, or they could assess that the market was capable of absorbing that extra amount. Those are all things that we drew out in the consultation document and raised as potential issues. There is not really a scenario where we can look at a developer contributing to houses and not have that impacting on house prices. It is a natural consequence of a policy to introduce developer contributors.

The Chairperson (Mr Martin): That is pretty clear. Thank you for that, Kiera.

Mr Stewart: Thanks very much for coming along today, for the answers and for the really good document, which is really helpful. I know that this is still in the conceptual stage, so it is hard to get into too much detail, but there is obviously significant concern. Over 60% of respondents to question 1 were opposed to developer contributions in some shape or form. How will that potentially affect the Department's thought process going forward on making changes to that?

Ms Lloyd: The Minister will take into account all evidence and information in front of her. Consultation responses are valuable. They provide valuable insights and valuable input, and, as you said, 60% of those who responded to the consultation did not approve of the introduction of developer contributions. The Minister will consider in the round the benefits, the issue of sustainability, the level of funding and the economic situation. She will take account of all of those factors when she makes a decision. Any consultation, whilst important, is not a determining factor alone: it is for the Minister to make a decision based on the information that she has available to her. The consultation certainly adds valuable information to her decision-making process, but is for her to decide.

Mr Stewart: Can you go into more detail on the responses, particularly to the first question? We talked about developers potentially passing the cost on. They will pass it on to the homeowner or whomever purchases the house, and that will be at the higher end. I am particularly interested in hearing about housing associations and those who want to build social and affordable homes, which we are distinctly lacking in Northern Ireland, and how it will impact on the ability of those associations, for some of which cash is tight, to avail themselves of this and build the homes that we need. Was there any more detail on that?

Ms Lloyd: We received a variety of responses from a lot of organisations, including Northern Ireland Water, the Construction Employers Federation, the Federation of Housing Associations, Build Homes NI, the Housing Executive, political parties, professional bodies, developers, planning consultants and six local councils. There were a variety of perspectives. Those who were opposed to the introduction were pretty consistent in their reasoning: they thought that it would impact on housing availability. In the main, people who responded thought that something had to be done; that more money had to be provided for waste water; and that that was necessary to enable houses to be built and for houses to connect to the waste water system. They were clear that something should be done, but they were not sure that developer contributions were it. They came up with a variety of alternatives, and a lot of people were asking for longer-term plans or longer-term considerations.

A lot of people raised social housing as a potential issue. Others said that it would have to be factored in to any relief scheme or exception scheme and that, as a policy was developed, if the Minister was minded to go down a route of either a voluntary or compulsory levy, consideration would have to be given to how social housing would still be enabled. From the perspective of a voluntary contribution, a social housing builder will probably be less likely to want to contribute towards a system or will have less flexibility in funding to make that happen, which brings us back to the fast-tracking argument. However, if someone is releasing capacity elsewhere and is paying for that, there is more money available to address other areas of greater need, including for social housing. If the Minister chose the option of compulsory levy, consideration would need to be given to developing any exemptions or any reductions or a sliding scale when it comes to social housing. At this early stage, we flagged that as an issue, but the Housing Executive, for example, supports some form of developer contribution.

Mr Stewart: For quite a significant time, there has been a relationship between NI Water and developers who have been using developer charges to try to unlock some of the capacity issues. To that end, what is different about the concept or proposals that exist and the informal relationship that has happened? From what I can see anecdotally, that has happened with the very expensive houses, where they can afford to absorb it and pass it on at a £5,000, £6,000 or £7,000 increase to the potential buyer. What would be different in this versus the informal representation that has been going on? Secondly, in areas where it is totally constrained — for example, in Larne, where there is zero capacity, so a massive number of houses are held up — how would the process work to unlock it in that area, if that makes sense?

Ms Lloyd: On your first question, currently, developer-led solutions are permissible under legislation, and that is a where a developer will pay for and install their own waste water infrastructure — for example, bigger pipes, flow solutions or package waste water treatment plants. The Department consulted on whether, in principle, it should be possible for Northern Ireland Water to accept contributions from developers for improvements that involve upgrading or replacing Northern Ireland Water waste water assets: that is the difference. There is currently a bar, legislatively, to Northern Ireland Water accepting those payments.

Let us take voluntary contributions as an example. A developer might have a plot of land and want to develop, say, 500 houses. They would go to Northern Ireland Water and ask what the potential was to connect it to the waste water systems.

If Northern Ireland Water says that there is no capacity, that developer might ask, "Is there anything that I can do to help unlock capacity?". If it is a £500,000 fix or a £10 million fix, that is one situation. If it is, "We need a brand new treatment plant at a cost of £200 million", the developer is unlikely to be able to contribute £200 million to make that happen. It is no different from how it currently is.

A compulsory levy would result in a pool of additional funding being available to address waste water issues, and that would just happen in line with price control (PC) 21 and in line with need. It would be where the need is, and that would just be added into the amount. As we have been clear in the consultation and as the Minister has made extremely clear, this is not a silver bullet and is not fixing waste water constraints. It simply will not do that. It is helping to bridge the gap; it is not solving the problem.

Mr Stewart: In Larne, which I mention because it is in my constituency — there are many areas like it — the infrastructure is at total capacity. There is a total block or constraint on any development in the area, and the estimated cost is £130-plus million to do the necessary works to increase capacity. Therefore, there is no way that this scheme would open up development in that area because developers were already trying to work with NI Water and a solution was never found to increase the capacity beyond increasing the pumping station. It would not resolve that issue.

Ms Lloyd: If the Minister were minded to go with voluntary contributions, all developers would have the ability to contribute and, potentially, the ability to pull together to contribute. There would have to be a market assessment and a viability assessment done by the developer of whether the amount that they could contribute would be financially viable for them, and then Northern Ireland Water would need to make an assessment. This is all theoretical —

Mr Stewart: Yes, I appreciate that.

Ms Lloyd: — but, if a couple of developers were able to provide £50 million because it was going to unlock a lot of houses for them, Northern Ireland Water would have to find the remainder but not the full amount. That might enable it to be done more quickly, or it might not, depending on the availability of funding. This is the voluntary contributions, and the pathway for that is simply to make it possible for that conversation to be had, whereas, at the minute, it cannot be had.

Mr Stewart: OK. I appreciate that. Sorry if I am getting beyond the conceptual stage. I am sure that you looked at it.

This is my final question, Chair. Tens of thousands of properties in economic development schemes are currently locked because of that constraint, so has work been done to look at what could be opened up from the numbers stuck in the pipeline versus what might come down the road if this were to get the go-ahead? Presumably, as part of a three-pronged approach, we can say, "If we do this, this and this, we could unlock this". Has that been done? How would that look?

Ms Alison Clydesdale (Department for Infrastructure): In addition to the three-pronged approach, the Department has been working with Northern Ireland Water, the Northern Ireland Executive and the Northern Ireland Environment Agency (NIEA) on a cross-departmental working group to look at that. The Northern Ireland Housing Executive also sits on that group. That has resulted in the unlocking of capacity that you will have seen through the recent monitoring round allocations: about 5,000 properties or so unlocked since October 2024. The Department also sits on the housing supply strategy group with all the other Departments and is working with DFC on an action plan. Developer contributions are very much part of that. Part of that work looks at the houses that are in the queue, if you like, to be unlocked. It is important to stress, though, that that group is looking at projects that have requested a connection from Northern Ireland Water and have addressed their planning permission and all their environmental consents. It is only at the point when a project has got to the stage of having planning permission and environmental consents that the unlocking of capacity can be looked at. If we do not know, we do not know, so we do not know what is already in the planning system. This is about environmental consents. That is the overriding factor.

The difference — it is possibly a fine difference — is that the current position with developer-funded solutions is really about permitting connection of those new developments to existing infrastructure. The developer is facilitating, if you like, the extension of Northern Ireland Water's network to the connection point of the new development, and that often includes storm water offsetting, providing pipes and doing that sort of thing. In the main, developers want to connect to the public sewage system, and Northern Ireland Water prefers that as well.

You talked about Larne. In an area where there is no capacity, it is important for Northern Ireland Water to establish whether the blockage is in the network itself, which it sometimes can be, or whether it is at a treatment works further down the line. That will determine the direction that Northern Ireland Water will take. Northern Ireland Water has a good system for pre-development, and it encourages developers to engage in that process as soon as they can, in order to look at all the options and identify where the blockages are, whether they are in the treatment works or in the networks.

The voluntary contribution and the developer contribution, should the Minister choose to go ahead, are looking at the unblocking where the issue is a Northern Ireland Water asset, whether that may be a sewage treatment works or a pumping station or that type of thing. The existing solution is about developers providing their own funded infrastructure in order to connect to the existing network. I do not know whether that makes it any clearer.

Mr Stewart: It absolutely does.

This will, obviously, go back to the Minister, and she will take soundings from you and from the consultation. Do you have an anticipated time frame for when we will hear something next in that regard?

Ms Lloyd: That will depend on the Minister. I anticipate that that will happen in the coming weeks.

Mr Stewart: OK, thank you.

The Chairperson (Mr Martin): I have one question, following on from what John said there. Kiera, you mentioned that treatment plants are expensive: my question is around that. Let us say that a developer identified that a small treatment plant might be the key to unlocking a development of 50 or 100 houses and would solve that problem. Would a developer build that treatment works to NIW standards, or would they say to Northern Ireland Water, "Here is the money, go and build the treatment works"?

Ms Lloyd: Northern Ireland Water has a strong preference for building itself —

The Chairperson (Mr Martin): I can imagine.

Ms Lloyd: — because it does not want to take risks by taking on anyone else's building quality. What we are trying to unlock legislatively, were this to be put forward, is enabling the developer to transfer the money to Northern Ireland Water, which would then use its staff and contractors to build it to their specifications.

The Chairperson (Mr Martin): That would probably get over the hurdle of who runs it. I imagine that that would be rather controversial going forward. One of the answers to question 5 in the consultation was:

Notwithstanding that, what you are saying, essentially, is that Northern Ireland Water's preference is that it be given money, in whatever format, and it does the necessary work, builds it and runs it and so forth.

Ms Lloyd: Exactly.

The Chairperson (Mr Martin): OK, that is fine. Thank you very much for that.

Mr Dunne: Thank you for your presentation, folks, and for the work that has been done so far. It is fair to say that there has been quite a negative response to the consultation. There appears to be a general feeling that the Department is not going far enough on such a major and fundamental issue, which is having a severe impact on homebuilding and much more beyond. Was it a surprise to the Department how negative the responses were?

Ms Lloyd: I do not know that we had any perception, nor did the Minister have any concept, of how it would be viewed. Northern Ireland Water is in regular contact with developers, and some developers had been asking it for the ability to, at least, look at some sort of voluntary contribution. The idea was that we would test the waters and ask people what they thought in a way that enabled us to gauge the level of interest and support. That is why we consulted. I would not say that we went into it with an expectation of overwhelming support or otherwise. It was a genuine temperature gauge.

Mr Dunne: There was a reasonable level of interest in it and responses. It was fairly negative, however. It is fair to say that over 60% disagreed with the main theme of developer contributions. One of the issues mentioned in the written responses was to do with going beyond homebuilding. It is obvious that capacity issues affect not just domestic homes but commercial premises too. Do you envisage that being included in any way?

Ms Lloyd: Again, the Minister may decide that developer contributions should not be put in place. If she moves down the road of either unlocking voluntary contributions or a compulsory levy, that will be part of the policy design process and will be added into the conversations.

Mr Dunne: Could it go beyond domestic homes?

Ms Lloyd: It would make sense to look at that.

Ms Clydesdale: Any work at all to unlock capacity, obviously, provides capacity in the network and, potentially, at the treatment works, so that will allow any type of development to connect, whether that be social housing, private housing, industry or anything else. Unlocking the capacity is the key, and it could facilitate more than housing. It is about unlocking capacity for all types of waste water connections.

Mr Dunne: I echo the points made by the Chair and the Deputy Chair on affordability. I am sure that the Committee has talked for over a year about the impact that it will have on consumers.

Finally, have any lessons been learned from other jurisdictions? Has there been good practice or bad practice that you have explored in the process so far?

Ms Lloyd: It is difficult to draw comparisons with elsewhere because the funding model in Northern Ireland is so different. There are other areas where some form of levy or amount of developer contributions is accepted. In England and Wales, for example, there is the community infrastructure levy, which allows for local authorities to set a charge for developers. The difference, again, is that local authorities have a much wider remit in England and Wales than they do here, and their remit includes the likes of waste water and water in many circumstances. In the main, improvements to waste water infrastructure are covered by water bills. We looked at other jurisdictions, and we did benchmarking work. However, because there is such a massive difference in how we operate, there was not really a natural model that, we could say, we would take.

Mr Dunne: I appreciate that.

Ms Clydesdale: I do not know whether you saw last week in the media that there was some coverage from the Republic of Ireland where developers of housing units will potentially be allowed to build their own infrastructure instead of having to wait for Uisce Éireann to do so under measures. The Housing Minister is bringing proposals to the Cabinet down there, and, obviously, we are keeping a watching brief on that.

Mr Dunne: Thanks, folks.

Mr McMurray: The responses to the consultation were touched on earlier. Is there any information on those who agreed and those who disagreed with the proposals? Did you find that one sector was more inclined to agree or to disagree? What were your findings?

Ms Lloyd: I do not know that we discovered that there was any weighting one way or the other. We were looking mainly at the results. I do not know that we focused particularly on who said yes and who said no. I do not know that I could answer that with an analysis of which pockets of respondents responded in certain ways.

Mr McMurray: A lot of good points have been made, but I am drawn back to what you said in your opening statement about how the Minister will consider this and all the rest of it. In my head, the adage is that, "Advisers advise, and Ministers decide". What will the advisers advise on this now, given the strength of opinion against it, the intricacies with it and the fact that it is only filling a gap, if you will?

Ms Lloyd: It is, as you said, for the Minister to decide what action to take following a consultation. She has received the same report as the Committee has, and she will make her decision in the coming days. Obviously, I am happy to reflect back to her, in making that decision, any comments that the Committee has.

Mr Boylan: Thank you very much for the presentation. Most of the points have been covered. It has been an interesting conversation. We go out to consultations as part of a three-pronged approach. If you had asked any of us, some of the responses about the costs coming back to the consumer would have popped up anyway.

You have answered most of the questions already. Obviously, you have not had time to do a full analysis, because affordability is an issue as well. It will be market-led, and there will be increases, and we still have that anyway. It is interesting that people who responded were just totally opposed to it in one way or another. You have obviously not done the analysis on that and broken it down, but there are a lot of good points. It is easy to read that, clearly, most of the people who responded gave a negative response, but there are learnings in that as well.

For some of the questions, 19% and 30% of people were in favour: is there anything coming out of that? We are looking at a three-pronged approach, and I listened to what John said about whether an area can be developed — there is a good opportunity to develop in Larne — if a contribution is made. We are saying that now, at the minute, there is a developer-led process, but, in this case, if something were introduced, it might unlock the potential to develop. Have you analysed the positive responses, or are there any ideas coming from them?

Ms Lloyd: Yes. Basically, what happened and what made it a challenging consultation to examine responses on was the number of people who answered "other". "Other" was, "We do not want it" or a variety of reasons why they did not want things. If you look at the consultation responses, you can see that the question was, "If we were to introduce it, would you prefer voluntary contributions?". The answer, in the main, was "other", and "other" was, "We do not want voluntary contributions" or, "For a variety of reasons, it is not our preferred approach".

When it came to those who answered yes, as you would expect, they either wanted developer contributions to be introduced or they neither agreed nor disagreed because they could see the value but were not prepared to say either way. Those people were more likely to come up with suggestions. If they were talking about the compulsory levy, they were more likely to suggest how we could put that in place or how to calculate it. There was a variety of suggestions from using a sliding scale to calculating it on square metre footage. There were certainly a lot of positives from the people who wanted some form of developer contributions to be introduced. They focused on unlocking capacity, increasing housing, addressing the issues of housing and using developers' contributions as a way to make that happen. There were certainly positive responses that gave us suggestions about how we could take developer contributions forward.

Mr Boylan: I have a final question, which I should know the answer to, about the Citizen Space responses. Did people respond to Citizen Space in groups, as opposed to individuals?

Ms Lloyd: We had individuals and groups. There is a series of questions asking whether you are responding as an individual or as part of an organisation. There were some questions about whether you were happy to be identified as an organisation. We do not identify individuals when we outline who responded to a consultation, but we do identify organisations, so there was a little bit about that.

What was interesting was that, of the responses that we received — I touched on it in my opening remarks — 102 or just over a third were the template response. They did not answer the questions on Citizen Space, which is why we say that the first question was really the one that all 293 answered. There was a template response, where they just completed their name or the name of their organisation and sent it to our consultation email address. That, in essence, just described why they did not want developer contributions and said that they were opposed to them. It did not go into any conversation around voluntary or compulsory. Almost a third of the replies that we received did not answer the rest of the questions, if that makes sense.

Mr Boylan: OK. Thank you.

Mr Harvey: All the questions and concerns have been on the same themes. What really stood out for me was that 14% strongly agreed, whilst 58% disagreed. What concerns me was a comment that that would not be a determining factor, so you kind of wonder whether the process was worthwhile if it is not going to be a determining factor.

Cathal sort of touched on this: we do not know the background of the responders, do we? Whether they are from a developer background or —?

Ms Lloyd: We have a list of all the organisations that responded. What we did not do when writing the consultation responses report was work out what interests they had. We did not look at it from the perspective of, "Well, you would put the Housing Executive in this box, the Construction Employers Federation in this box and Betterhomes (NI) in this box". We did not do it like that. We have a list of all the organisations that responded, and I can tell you who responded, but we did not break them down by sector because we would have had to do work with those 293 names to identify them with boxes or areas. We did not do that.

Mr Harvey: Yes, OK.

Ms Lloyd: On the point about consultation responses, consultation is valuable and important in enabling us to gather data. When I say that it is not the determining factor, that is because Ministers have to look at the wide range of issues. For example, when we consult on raising fares or introducing a new tax, the views of people help to inform the decision but are not the only things that need to be considered by a Minister when making a determination.

Mr McNulty: Thank you, Kiera and Alison, for your evidence. It has been an interesting discussion.

Give me your take, please, on the much-lauded three-pronged approach that will be the cure to all the water and drainage ills of the Department for Infrastructure.

Ms Lloyd: In what respect?

Mr McNulty: Just tell me what the three-pronged approach involves. What are the three prongs? If you had a stool built of those three legs or three prongs, which would be the most secure leg? What is the three-pronged approach?

The Chairperson (Mr Martin): A good Presbyterian strategy, there, Justin, the three-pronged approach. Sorry, Alison, you were about to indulge in theology or explain the three-pronged approach to policy.

Ms Clydesdale: I was just going to explain the three-pronged approach.

The Chairperson (Mr Martin): You are welcome to go into the theology as well if you want to, but as a Presbyterian —

Mr Boylan: We will give that wee bit of a miss today, Alison.

The Chairperson (Mr Martin): Sorry, Alison.

Ms Clydesdale: The Minister has articulated her three-pronged approach quite a lot in the Chamber and in other places. The three elements of the three-pronged approach are to continue to press the Executive for adequate funding for Northern Ireland Water; to bring forward the Water, Sustainable Drainage and Flood Management Bill, which is with the Committee at the moment; and developer contributions.

Mr McNulty: I am looking at the three prongs, and, if I was seeking certainty on delivery, the three-pronged approach would not give me much certainty. I am looking at funding and partnership, individual solutions and legislation, and none of them is free or certain. I know that you are not answerable for that, but I am concerned about that. Are developer contributions not already happening organically?

Ms Lloyd: I was making that point when answering the question on the difference between the proposals and what currently happens. Yes, developers are actively engaging with Northern Ireland Water on how they can help or what they can do to unlock their ability to connect their houses, so they are actively working with Northern Ireland Water. The issue is that there are limits in the legislation on how far that can go. As Alison and I mentioned, there are things such as storm water offsetting, which can free capacity in the waste water network by removing storm water. There are flow transfer schemes, which are used to divert flows from drainage areas that have reached capacity to another waste water network area, where capacity exists. They can purchase and construct stand-alone package waste water treatment plants, which is not a preferred option but is an option. Those are things that developers may currently do and engage heavily with Northern Ireland Water to do.

Either proposal — for voluntary contributions or for compulsory levy, if that is how the Minister wishes to go — would need us to unlock the legislation that blocks that. We would need to put in place a power that enables Northern Ireland Water to accept funding to fix its waste water infrastructure.

Mr McNulty: Has an assessment been done of the economic impact of the blockage to development that is in place? A blockage is in situ and stopping development. Has an assessment been done of the cost to the economy of not being able to advance development on multiple sites across the North because of the lack of waste water capacity?

Ms Lloyd: Northern Ireland Water publishes a list of the constrained areas, so we know which areas have constraints. I do not know that we have followed that up with any form of economic assessment per se, but we certainly know where the constrained areas are and that there are developers in those areas who would like to build.

Mr McNulty: "No drains, no cranes", as I have said here a number of times. Developers are screaming and crying out for progress on that front. I go back to the three prongs: there is no certainty on any of the prongs, which must be a concern for them and, I imagine, for your Department.

From whom did you receive responses? Are the vast majority of the responses from developers, from potential residents or from householders? Do you have a breakdown?

Ms Lloyd: I can certainly provide a list of the organisations that replied. As I said, for privacy and GDPR reasons, we tend not to publish the names of individuals who responded. We can say, "x number of individuals responded", as I have done. We can certainly provide a list of the organisations that responded to the consultation.

Mr McNulty: If I were a developer who is sitting with a big land mass that has zoning but no access to waste water treatment systems and I were watching the Committee, would I be saying, "Ah, we're ready to go now. It's all sorted now"? No. What is a realistic time frame for the unlocking of access to our waste water treatment systems?

Ms Lloyd: The first decision is whether the Minister wishes to proceed with developer contributions. If she so decides, the next decision is what pathway she wishes to recommend. A compulsory levy would take longest to put in place. A voluntary contribution would be quicker, but it would still take time and require primary legislation. The Committee is aware of the legislative capacity of the Committee and the Assembly; we would have to work with them on that. We would also need to do the more detailed policy work on how it would apply, when it would be available and at what point of the process you could apply it. All of that further detailed policy work would need to be done. It would be a parallel approach: we would be preparing legislation at the same time as we were preparing any policy position. In essence, there would be more procedures, practice, guidance and close working with Northern Ireland Water and developers as that was developed. There would be a gap because of how long that would take. It is probably constrained more by the legislative timetable than by our ability to develop practices and procedures and do a further consultation.

Mr McNulty: OK, so we should not hold our breath for the three-pronged approach to deliver.

Has any consideration been given to the loan-to-value (LTV) ratio of mortgages and homebuyers' ability to fund their purchase, given that improvements may not be securable against the asset of the building?

Ms Lloyd: At this point, no. That would come in later. We talked earlier about economic viability and the economic consequences: all of that would come in as we were narrowing in on what it would look like in practice, if the Minister chooses to take that route. Those are the sort of situations in which that would take place. It would look different under a compulsory levy from what it would look like under a voluntary contribution.

Mr McNulty: The level of intervention required varies hugely in different locations across the North. Would the approach be to equalise levies across the North, regardless of what the issues are at individual sites?

Ms Lloyd: I should have reminded members that there is also an option for compulsory and voluntary levies to be put in place at the same time. A compulsory levy takes away the issue of fairness over who can afford to contribute in order to unlock waste water capacity, because it is a blanket levy. That is partly why a compulsory levy would take longer to develop. Consideration would have to be given to, for example, whether someone who lives in a rural area and has a septic tank should be expected to pay a compulsory levy towards waste water capacity when they are never going to connect to it. There are relief schemes or exemptions that would have to be worked through, consulted on and considered. In answer to your question, consideration would have to be given to a reduction or a weighting in those situations.

Mr McNulty: Potentially, a tiered approach.

Ms Lloyd: Potentially, but, again, that would be part of the policy development and procedural development, if the Minister chooses to take that route.

Mr McNulty: This is my last question. On benchmarking, you said that you had made comparisons with what is happening in the South. To take an all-island approach — an all-Ireland approach — has the Minister corresponded with her equivalent in the South to see what approach is being adopted there and compared that with what might be implemented here so that we are singing from the same hymn sheet, so to speak?

Ms Clydesdale: Not that I am aware of.

Ms Lloyd: I do not know that she has engaged with her counterpart in the South on that issue. We will have to check.

The Chairperson (Mr Martin): I will bring in Andrew in a wee second. I have one question that leads on from your chat with Justin. It is about — staying with the Presbyterian theme of your answer, Kiera — what is being done currently to bridge the gap and free up development. I do not want to put words in your mouth, but I think that you spoke about separating storm water from normal sewage, which is important; using additional capacity elsewhere when capacity in one area has been reached; and putting treatment works in place. Are all those three things being done?

Ms Lloyd: Yes.

The Chairperson (Mr Martin): I want to focus on the last one. Treatment works are being put in at the minute. In a previous answer, you said that Northern Ireland Water is keen that it does that and that those are procured in that way: is that happening? Is it that sort of treatment works that is going in? Who is putting those in; who is paying for them; and who is running them?

Ms Lloyd: I will pass over to Alison on that one. We are getting technical, so engineer Alison will answer that.

The Chairperson (Mr Martin): Right.

Ms Clydesdale: That is, occasionally, part of a developer-funded solution. If there is absolutely no connection available or likely to be available in the near future, a developer can choose to put in a package waste-treatment works, which is a small thing that services a development of however many houses. The developer would then be responsible for maintaining that until such times as Northern Ireland Water could adopt it. However, the decision-maker on whether a package plant can be put on the site is the NIEA. The package plant has to obtain an environmental discharge consent in order to be a viable option, and that can often be difficult to get for package plants. Should the package plant get its environmental discharge consent and be connected and the houses occupied, there is the risk that, if the developer goes out of business — goes bust — as has happened on occasions in the past, there will be no one left to administer it. Therefore, while that is a prong —

Mr Boylan: The 1798 Act, Chair. [Laughter.]

Ms Clydesdale: — of current developer-funded solutions, the preference is always to connect to the public sewerage system.

The Chairperson (Mr Martin): OK. I will ask you one more question on that, Alison, because your answer was interesting. You nearly saw where I was going with this.

Let us say that one of those package plants is in place or will be in place before this stuff works itself out; such things can happen. I will rephrase what you said. Currently, it is built by the developer, and people cross their fingers and hope that Northern Ireland Water will adopt it. Let us say, then, that Northern Ireland Water is not happy with the treatment plant and does not want to adopt it because it is not at a certain standard; the developer goes out of business; and the whole thing starts to unravel, as regards NIEA, overspills — I do not know all the technical terms — and the plant just not coping. Who is liable? You can see what I am driving at. Are the 50 people who bought a house in the development and are asking, "Why is sewage coming up my drain?" ultimately liable in the situation that I have described? Does Northern Ireland Water step in at that point?

Ms Clydesdale: In that case, where it is a package waste water treatment works and it is a private development, the residents would be responsible. Under article 161 of the Water and Sewerage Services (Northern Ireland) Order 2006, Northern Ireland Water is responsible only when the works has been fully adopted.

The Chairperson (Mr Martin): Are householders made aware of that as they plan to buy the house? It is quite serious if the scheme of events that I described to you happens.

Ms Clydesdale: Their legal representatives should make them aware of that at that time. If they do not, it is liable to come to light at a later stage, if they come to sell the house or whatever. The duty is on the householder to carry out due diligence and take legal advice at the time that they buy the house.

The Chairperson (Mr Martin): Thank you for that, Alison.

Mr McMurray: I am trying not to get distracted by the talk of Presbyterianism and the 1798 Act. I am firmly biting my tongue. [Laughter.]

The Chairperson (Mr Martin): We have opened up a theme, Andrew. I apologise.

Mr McMurray: I will come back to the consultation responses and ask, with the greatest respect, why they have not been broken down by sector. I am breaking my rule of not liking to extrapolate too much before I ask a question. Why are the consultation responses not broken down by sector? The Minister is good at coming to the Chamber, where we ask her about a range of issues such as the environment, waste water, the statement of regulatory principles and intent (SORPI), farmers and social housing. A lot of that comes back to the three-pronged approach, and the developer contributions factor into it.

You have said that there is a list of the responders and all the rest of it, and I appreciate that you do not necessarily want to mention individual responses. However, we get presentations with themes, graphs and pie charts. I cannot get my head around why, in this day and age, the responses have not been broken down by sector, even in a rudimentary way. Thirty per cent of planners may say that they are happy to have developer contributions because they will get houses built and x, y and z. However, there may be a large cohort of people invested in social housing who say that developer contributions will not positively affect social housing. That will not lead to the resolution of a key issue for the Executive. Likewise, the environmental sector may say that the developer contributions will not help with the environmental issues that the Executive face. Why were the responses not broken down? Could they be?

I go back to my question about advising the Minister. Surely breaking the consultation responses down by sector would help with that. I appreciate that you are not going to tell me what you will advise the Minister, but would a breakdown not benefit the Minister?

I am sorry. I appreciate all the answers that you have given, but a lot of them are hypothetical. We are literally pulling out hypotheticals such as, "If a whole pile of developers club together to provide £50 million, that will be £5,000 per house and x amount of houses being built". I get all that, but I have been left wondering why it was not broken down by sector.

Ms Lloyd: Part of the problem is the complexity of the responses. We got 202 responses that were declared to be from organisations. Sometimes, that was someone saying that they represented an organisation but not telling us the name of the organisation. Sometimes, it was people filling in the Citizen Space online survey. Sometimes, we received a response on Citizen Space, received an additional response by email and were able to correlate one with the other. A lot of the responses did not answer the questions. Sometimes, it was a case of, "We're not answering your questions. We're just going to tell you what we think", and, then, we had to try to extrapolate from a 10-, 15- or 20-page document the key indicators and key themes and whether they were saying yes or no. As I said, only one question received 293 responses, and they were not as clear as, "We oppose", or, "We support"; it was a case of reading the document and finding, buried in it, a line that made it clear that they did or did not want it. It is complex to break it down into how organisations responded and what that meant.

How many organisations responded to the first question and not to the second? As I said, the people who responded with the template response did not respond to any other questions; they gave us a template response that outlined all the issues. As we have covered in the consultation responses report, we are clear that we have represented what they were telling us of what they thought about the concept of developer contributions. However, it is difficult to assign that in a way that makes sense and does not risk misleading. We were also faced with scenarios in which people said that they are from an organisation without saying which organisation, but the email address that they sent the email from looked like it might be from a particular organisation. How do you put that through? What does it look like? It was a complex consultation to analyse.

I understand what you say and, perhaps, the frustration around how high-level it is. It was a high-level consultation, because the options are so diverse: "none" means that no further work will be done on this; "voluntary" moves us down a completely different path; and "compulsory" moves us down another different path. We are not going to spend the limited resources that we have looking at the detail of the work, the detailed assessments and the answers to the questions and working out what a compulsory levy might look like, how much it would be, what it would be calculated to be and how all of that would happen, if the ultimate decision is that we are not going to take that path. To spend the next year — for talk's sake — developing really detailed proposals for all of the options in order to enable us to consult again would not necessarily be the best use of time. This was a narrowing consultation; it was asking, "In principle, how do you feel about this?", and, "In principle, which of these pathways would you like to see?". That will be narrowed down with the Minister saying, "I have taken the responses into account; I have listened to all of the evidence; and I have decided to explore this path" — be that none, voluntary or compulsory.

If she chooses to go down the route of voluntary, for example, our policy and procedural work will be focused on what that will look like and how we would put it in place, working with the Utility Regulator around some of the issues; working with Northern Ireland Water, using its links with developers; consulting further; developing a Bill; coming back to the Committee; and doing all of the consultation. There will be more detailed consultation on procedures and guidance that will set out clearly how it will operate in practice. It would be the same thing for a compulsory levy. There would be detailed policy, procedure and guidance that would enable you to have all of your questions answered. The answers are all in there, albeit at a lower level — a detailed, focused level — which is not where we are currently.

The Chairperson (Mr Martin): That was a detailed answer. Andrew, do you have one more question?

Mr McMurray: I do not have a laser-focused, Keith Buchanan-style question, so I will leave it at that.

Mr Boylan: It is interesting that you brought up the issue of building what I call "spec tanks". They are specified: you fill in the article 161 agreement, and it is either signed off or it is not. Ultimately, NIW would probably like to do them from the start, but it clears them. Article 161 has to be adhered to. Am I right or wrong?

Ms Clydesdale: You mean for package plants?

Mr Boylan: Yes.

Ms Clydesdale: Yes. A package plant first has to achieve a discharge consent from NIEA. Should it receive that discharge consent and be operational, the developer can enter into an article 161 agreement with Northern Ireland Water that would eventually lead to adoption. That, however, is a decision for Northern Ireland Water.

Mr Boylan: Absolutely. That issue has been raised on a number of occasions. Those things are all part of the process. It has come up in the conversation. I cannot understand the major issue with it, but it is an issue from NIW's point of view.

Mr McNulty: Those package plants are notoriously problematic. NI Water is most likely opposed to their implementation and adoption, because there are instances where developers install them not to spec and then that developer goes out of business. There are five houses in Poyntzpass where the batch treatment plant does not work. The sewage-treatment system does not work, and the developer has gone bust. Who is responsible? Those families are left totally distraught by a noxious smell outside their home caused by a batch treatment plant that does not work. Nobody is taking responsibility. What do they do then?

Ms Clydesdale: There are examples of that, but plants that are not adopted remain as private infrastructure and are the residents' responsibility.

Mr Boylan: That is the point.

The Chairperson (Mr Martin): Ladies, thank you very much for coming to the Committee and giving evidence not only on the consultation but on the Minister's three-pronged approach, Presbyterianism and the 1798 rebellion. [Laughter.]

Mr Boylan: I said "Act". [Laughter.]

The Chairperson (Mr Martin): That was a thorough session. I hope that the Committee is setting a benchmark for proper but respectful scrutiny of all the officials who appear before us. We really appreciate your evidence. Thank you very much for coming along.

Ms Lloyd: Thank you.

Ms Clydesdale: Thanks.