TO THE MINISTER FOR REGIONAL DEVELOPMENT

(CONOR MURPHY)

Mr McCarthy asked the Minister for Regional Development what plans he has to compel developers to pay the full cost of connecting new homes to services.            (AQO 701/08)

Mr Murphy: Connecting all new homes to services involves the cost of making a connection to the water main or public sewer and the cost of ensuring that the local network has the capacity to meet the increased demand placed upon it.

Those costs are recovered through connection charges and the new infrastructure charges that have been introduced, on a phased basis, this year. For a relatively small number of properties there is also the cost for providing a water main or for sewer extension requisitioning. For that work the water company provides a reasonable cost allowance to the developer. The arrangement is intended to fairly apportion the costs of a requisition between the developer and the company.

In its strand one report, the independent panel recommends that that should be reviewed, and it is my intention to initiate that review shortly.

Mr McCarthy: Recently, most developers have made huge amounts of money by building new developments and apartments, some of which are required and some that are not.

However, all of those developments need sewer and water pipes, new street lighting and, sometimes, new roads, for which the taxpayer is usually obliged to pay. Does the Minister not agree that it is ridiculous that taxpayers must, effectively, subsidise the business interests of some of the wealthiest people in society?

Mr Murphy: I assure the Member that, in line with the panel’s recommendation, I intend to review that situation. However, last year’s consultation document indicated that the annual cost of requisitions — the connection charges to which the Member refers — was around £7 million, half of which was borne by the developers under proposals that were introduced by the direct rule Administration and the other half by the water company. More recent data from the current financial year suggests that those figures may have been overestimates. Clearly, the issue must be examined further. The Department intends to review the contribution that is made by developers.

Mr Burns: Will the Minister ensure that any changes to connection charges do not add to the cost of social housing and that there will be provision for first-time buyers?

Mr Murphy: I am not sure how the Member makes that relation. Kieran McCarthy’s proposition is that any changes to connection costs should be borne by the developer. I do not see how that would add to the costs of social housing. Perhaps, the Member refers to affordable housing or social housing that is built by developers. That is fair enough. Had he said that at the outset, his question would have been clearer. The amount that a developer charges for a house and what he or she receives is a matter for the buyer in that particular market.

The panel has suggested that a review be initiated, and people have made the case that developers are receiving a substantial amount of money for the properties that they develop. Therefore, the Department has suggested that, if there is scope for an increase or reconsideration of the cost of connection in such a way that it will not affect public funds or the money that would otherwise be spent by the water company, which is received from the general public, it is quite happy to carry out a review of the matter.