Infrastructure Minister for Northern Ireland Liz Kimmins has told the Northern Ireland Assembly that NI Water must operate within its budget and do the best it can with available resources.

The Minister was providing an update to the Assembly following the forensic accountant investigation carried out by PricewaterhouseCoopers LLP (PwC) into why NI Water was unable to live within its resource budget allocation in the 2024/25 financial year.

According to a statement issued by the Minister, the report highlighted a lot of movement in budget estimates during the last 6 weeks of the financial year - the potential overspend varied from £7m in February to £3m at the end of the financial year which was then reduced further to £1.4m after year end close.

The statement says:

“What is also clear from this report is that the NI Water Board did not base its financial decisions on the budget it actually had, or in other words the amount allocated by the Department. Instead, the Board based these decisions on the larger amount it wanted, despite not actually having that money to spend….

“I find it difficult to understand how a Board can monitor operating costs when its budget is not aligned to the allocation from the Department. This is clearly a fundamental flaw in oversight and governance processes.”

Minister Kimmins told the Assembly:

“My decision to appoint a forensic accountant in March was taken because protecting public funds is of the utmost importance, particularly in light of the ongoing wider pressures faced not only in my own Department, but across all the entire public sector.

“In what PwC describes as a ‘significant limitation’, it is clear from this report that the NI Water Board did not base its financial decisions on the budget it actually had, or the amount allocated by the Department. Instead, the Board based these decisions on the larger amount it wanted, despite not actually having that budget to spend. If I had not intervened in the final days of the financial year, NI Water would have overspent and would have been in breach of their obligations to manage public money.

“The report highlights that NI Water needed to manage fluctuations in prices for goods and services through better financial profiling and supplier management throughout the year. If NI Water had negotiated savings, it could have planned better and made the necessary pay award within its allocated budget.”

The Minister concluded:

“I am determined that we all learn from this forensic investigation. I cannot stress enough that in these challenging times for the public purse, it is essential that NI Water takes every opportunity to live within its budget. The Board needs to factor in affordability to all its decisions alongside careful financial management, just as the Department and other public bodies have to do.”

The report is currently being prepared for publication – the Minister has reviewed its content and was sharing the emerging findings.

NI Water warns “persistent underinvestment in water and sewerage services is having wide reaching implications for Northern Ireland"

Commenting on the Ministerial response, NI Water said it noted the Minister’s statement on the PwC report and would study its findings in detail when published.

According to the water company, the report must be viewed in the context of a 27% funding gap compared to the level independently assessed as essential by the Utility Regulator as necessary to meet the Department for Infrastructure’s Social and Environmental Guidance.

NI Water said:

“Persistent underinvestment in water and sewerage services is having wide reaching implications for Northern Ireland. Both the Northern Ireland Audit Office and the Fiscal Council have recognised that current funding arrangements are not sustainable. The underfunding, which has continued since the creation of NI Water in 2007, means that key objectives and priorities that underpin the Programme for Government cannot be met under these arrangements.

“In March 2024, NIAO highlighted how historic underinvestment has led to serious capacity constraints across Northern Ireland’s wastewater network. It also warned that the short-term funding model undermines long-term planning—underscoring the urgent need for a comprehensive, expert-led review of funding and governance, and a coordinated, cross-departmental approach to infrastructure delivery.”

NI Water added it would welcome an Executive-led, fully funded and realistic cross-departmental transition plan to simultaneously meet the objectives on housing, economic development, and the environment as set out in the Programme for Government, saying:

“We remain ready to work with the Department, in conjunction with the Utility Regulator, and all relevant stakeholders to help shape and deliver a sustainable, joined-up solution. Prioritising one objective over others risks systemic failure, with profound consequences for the Programme for Government and the tough choices required to determine which outcomes in the current Price Control Determination should take precedence.”