Recoupment of Drainage Infrastructure Costs

A report published today by John Dowdall, the Comptroller and Auditor General for Northern Ireland, examines the actions taken by the Department of Agriculture and Rural Development to recover the costs of drainage infrastructure schemes from developers. In June 1990, the Public Accounts Committee (PAC) at Westminster noted that the Department was considering how to recover the costs of drainage schemes, through agreements with developers. The Audit Office report examines the progress made by the Department, over the past 14 years, to introduce a recovery process.

Background

The development of land for housing, commercial or industrial use increases the amount of impermeable land and results in increased stormwater run-off from the developed area to nearby watercourses. This increases the risk of overloading the downstream watercourse system. The Department, through its Rivers Agency, undertakes drainage infrastructure works to facilitate such developments by reducing the risk of flooding of property or neighbouring areas in the future. The costs of these schemes are currently borne entirely by the taxpayer – developers benefiting from the schemes do not contribute.

Generally, drainage schemes include an element of ‘betterment’ – that is, improvements to the drainage infrastructure that are not directly necessitated by the new development. The betterment portion of project costs would not, therefore, be recoverable from developers.

Main Findings and Recommendations

On Development Schemes (Part 2 of the Report)

• Significant amounts of public funds have been spent on drainage development schemes. The report notes that figures for the total cost and number of schemes undertaken since the PAC report in 1990 were not readily available. However, in the five years to March 2003, 96 schemes were completed at a total cost of £5.3 million, (including betterment). The Agency expects to continue to incur significant costs for the provision of drainage development schemes in the future (paragraphs 2.1 to 2.8).

On Progress in Charging Developers (Part 3 of the Report)

• The Agency said that, since the PAC report in 1990, it has made a number of significant attempts – in 1994, 1996, 1997, 1999 and 2002 - to develop a way forward. The Audit Office report notes that, in each case, it was concluded that the appropriate way forward was to amend the Drainage Order, in order to facilitate collection of contributions from developers. To date, the Agency has not amended the Drainage Order and so does not have the statutory authority to obtain contributions from developers (3.2 to 3.25).
• The Audit Office found that the Department’s consideration of how to obtain contributions from developers towards the cost of drainage schemes has been ongoing for over 13 years since the 1990 PAC report and remains unresolved. It recognises that there are complexities and that the Agency has taken various actions to seek a way forward, but notes that no strategy has been put in place. As a result, the Agency is not yet in a position to charge for this service, which continues to be met wholly from public funds (3.30).
• It has not been possible to calculate the precise value lost to the public purse through the absence of a means of recovering costs from developers. However, with over £1 million being spent annually on drainage schemes, the amount is likely to be substantial (3.31).
• The report recommends that the Agency takes steps, as a matter of urgency, to seek an amendment to the Drainage Order to include provision for a free-standing power to charge, so that developer contributions can start to be obtained as soon as possible. Following the Audit Office review, the Department said that it will take forward this recommendation (3.33 to 3.35).
• Although the Agency considered various charging approaches, since 1990, it has not yet established a charging methodology. The Audit Office recommends that the Agency carries out a review to estimate the levels of contributions from developers likely to be obtained from various charging options, evaluates alternative charging methodologies and prepares a strategy paper on the way forward. The Department has said that the Agency will appoint consultants to identify appropriate charging methodologies and recommend a way forward (3.36 to 3.39).
• The Agency has said that consideration is currently being given to an alternative approach - known as ‘Sustainable Urban Drainage Systems’ (SUDS) - to restrict storm water discharges from development sites. SUDS aims to control surface water run-off by allowing the discharge to be controlled, prior to its release into drains, sewers and watercourses. Typically, the structures would comprise ‘on-site’ stormwater storage facilities, constructed by the developer. The Agency said that acceptance of SUDS in Northern Ireland could have a significant impact on the need for drainage development schemes (2.9 and 3.16).
• The Audit Office notes, however, that SUDS solutions have previously been ruled out because of concerns in relation to design, long-term maintenance, health and safety issues, the potential for flooding if the on-site facilities were full and resulting public liability claims. In its view, any benefits which on-site storage facilities may bring would be in the longer term. It also notes that the evidence suggests SUDS would not be an appropriate solution for every development situation and so there will continue to be a need for infrastructure drainage works and a mechanism for the recoupment of costs from developers (3.16, 3.17 and 3.40).