CIH Northern Ireland response to the Department of Finance’s consultation on the draft budget 2025/2026

Yes.

We believe that the 2025/26 budget must focus on areas that deliver tangible, long-term benefits for communities across Northern Ireland. Housing and homelessness prevention services should be top priorities, given their critical importance to social and economic wellbeing.

1. Capital investment in high-quality, energy-efficient homes

   The Department for Communities (DfC) capital investment should prioritise the delivery of high-quality, energy-efficient homes that meet the diverse needs of communities across Northern Ireland. We welcome the allocation of £270 million in conventional capital funding for DfC, which represents a doubling of the previous year’s allocation, plus the additional £100 million earmarked for social housing. This commitment is an essential step towards addressing the acute housing crisis by increasing the supply of affordable and sustainable homes.

   The overall allocation is encouraging, and we welcome the minister’s confirmation that the £100 million earmarked for social housing is in addition to the conventional capital allocation. This means that the overall capital available for new social housing well exceeds recent years’ allocations, representing a significant opportunity to increase the supply of new social housing. Considering inflation and rising costs, it is essential that these investments not only address current needs but also lay the foundation for a more ambitious social housing output. Overcoming barriers to housebuilding and accelerating development in line with the housing supply strategy’s identified levels of need should remain key priorities.

2. Homelessness prevention services

   The rising number of individuals and families experiencing homelessness highlights the urgent need for increased resource allocation. The DfC resource budget should prioritise funding for homelessness prevention services, enabling frontline organisations to provide critical support to those at risk. This includes addressing the pressures from inflation and the impact of rising national insurance costs on community and voluntary organisations delivering these vital services.

3. Supporting People programme

   We urge DfC to increase funding for the Supporting People programme by at least the rate of inflation in 2025/26. Ideally, funding should exceed inflation to begin reversing the impact of years of underinvestment. Such investment is essential to ensure that vulnerable groups, including older people, individuals with disabilities, and those at risk of homelessness, receive the support they need to lead stable and independent lives.

4. Decarbonisation of housing

   A significant step change in the decarbonisation of housing is needed to meet obligations under the Climate Change Act, given that domestic heating accounts for around 14 per cent of emissions. Investment in retrofitting existing homes and building new energy-efficient housing is crucial to reduce carbon emissions, alleviate fuel poverty, and protect the most vulnerable from rising energy costs. It is unclear how the proposed allocations will support the urgent decarbonisation of housing.

5. Strategic use of Financial Transactions Capital (FTC)

   We welcome the allocation of £48.1 million in FTC funding, which is strategically important for affordable housing initiatives such as Co-Ownership Housing and intermediate rent. These models are vital for expanding housing options and addressing affordability challenges.

Alignment with programme for government priorities

While our primary expertise lies in housing and related services, we generally agree with the prioritisation of funding as outlined in the draft budget. It is critical that the budget aligns closely with the priorities stipulated in the programme for government. Decarbonisation, however, remains a notable gap that requires urgent attention and investment.

In conclusion, the 2025/26 budget represents an opportunity to make meaningful progress in tackling the housing crisis and addressing homelessness. We encourage DfC to fully utilise this funding to create lasting, positive impacts for communities across Northern Ireland.

In the pursuit of improving the sustainability of public finances, it is essential to emphasise that revenue generation is not just a choice but an imperative. Enhancing the sustainability of public services and finances is a prerequisite for enabling the long-anticipated transformation of service delivery. Such measures are critical to ensure the adequate financing of essential services, including housing and support services that communities across Northern Ireland depend upon.

Revenue-enhancing measures

We welcome the proposed changes to:

• Lift the maximum capital value cap for rates, ensuring that higher-value properties contribute more proportionately to public finances. This aligns with the policy’s original intent of maintaining parity with the highest council tax bill in England, which now surpasses the highest domestic rate bill in Northern Ireland.
• Reduce the early payment discount for domestic rates, which reflects a financially prudent approach to better align revenue collection with current funding needs.

While these changes will generate only modest additional revenue in the broader context of Northern Ireland’s funding demands, they demonstrate the type of difficult but necessary decisions required to strengthen public finances.

Long-term financial sustainability

Rather than focusing solely on reducing services, we encourage a strategic approach that prioritises efficiency, reviews the impact of existing programmes, and seeks opportunities to optimise service delivery. By enhancing revenue generation and aligning services with the programme for government’s priorities, we can better sustain essential services while enabling investment in housing and other critical areas.

In summary, while we acknowledge the difficult fiscal environment, revenue-generating measures like those proposed in the draft budget represent a step in the right direction. They illustrate the potential for thoughtful, targeted decisions that balance financial sustainability with the need to protect vital public services.

In the context of social rented housing, the principle that the resident pays through rent is long-established and remains a critical source of revenue. This income supports essential service delivery, including estate management, repairs and maintenance, ensuring the sustainability of homes and the communities they serve. Importantly, low-income households are supported in meeting their rent obligations through the benefits system, which aims to ensure that housing – both social and private – remains affordable and accessible.

By contrast, the absence of a comparable revenue stream for water provision in Northern Ireland serves to constrain the financial resources available for reinvestment in maintaining and upgrading water and wastewater infrastructure. This limitation has become a barrier to the delivery of much-needed homes, with capacity constraints directly impacting housing development.

To address this, we recommend a review of the governance structure of NI Water, coupled with an evidence-based exploration of reform options. Such a review should consider the potential for service charges or alternative mechanisms that would ensure the long-term financial sustainability of water and wastewater services while supporting critical infrastructure development.

Any introduction of service charges should include supports for low-income households to ensure affordability, drawing on good practices from the benefits system and other targeted assistance programmes to help people manage these costs effectively.

While the introduction of service charges for certain services may be challenging, it is vital to explore innovative and equitable solutions to secure the resources necessary for maintaining and improving key infrastructure.

Neither agree nor disagree.

While public sector pay is undoubtedly an important consideration, it is not the sole priority. Pay is a critical component of the housing system across all sectors – public, private and third sector – influencing skills acquisition, retention and professional development. Housing-related roles span these sectors, and fair remuneration is part of ensuring a skilled and sustainable workforce.

Many frontline housing and homelessness organisations operate within the community and voluntary sector, where services are already stretched to meet rising demand. These organisations often face challenges in retaining staff due to limited funding and constrained pay structures, which can impact service delivery and outcomes for vulnerable people.

A holistic approach to pay across sectors is essential, ensuring that resources are allocated equitably to support workforce sustainability, enable professional development, and ultimately enhance service delivery across housing and homelessness systems.

Visit the government website for more information on the consultation.

For more information on our response please contact Justin Cartwright CIHCM, national director Northern Ireland on justin.cartwright@cih.org.