Northern Ireland Water over spends but hits all quality targets

Northern Ireland Water’s operational and capital expenditure for 2021-22 outstripped its current price control (PC21) final determination allowances set in April 2021 and complied with all of its quality requirements.

The Utility Regulator for Northern Ireland (UREGNI) said “there were some mitigating circumstances" for both of the compnay's over spends. In its 2021-22 Cost and Performance Report, UREGNI showed the publicly-owned water company’s operating costs for the report period, at £272.1m, were £29.7m above its allowance. it reported that “differences in how the PC21 final determination allowed for pension costs and how NI Water allows for them” accounted for £9.4m of the overspend. The remaining £20.3m was “mainly due to the increase in power costs.”

A £46m excess in capital expenditure for 2021-22 at £229m was, according to UREGNI, accounted for by

adjustments to accommodate inflation by the company’s shareholder, the province’s Department for Infrastructure (DfI). UREGNI reported that the DfI adjusted its public expenditure allocation “to account for higher than expected inflation, re-profiling of funding and expenditure from later in the programme to utilise budget availability and the provision of additional funding through ‘in year’ monitoring rounds.”

UREGNI said it will “assess cumulative delivery over the medium term taking account of adjustments in budget, inflation (taking account of any movements from assumptions made within the final determination) and the delivery of capital efficiency.”

The report showed that Northern Ireland Water had met or bettered planned delivery for 37 of 45 key output measures under PC21 including all of its water and sewerage quality compliance measures and ten out of 13 consumer service measures