Agenda item

Lead Finance Officer's Statement

Minutes:

The Lead Finance Officer followed on from the Chief Executive’s report and stated that this year’s rates provides a number of key financial messages.

He indicated that the rate increase of 2.99% is made up of 3 elements. 1.27% represents the baseline position, 0.76% relates to the significant central government grant cuts that have been imposed, and 0.96% relates to new investment in our capital plan and jobs and skills interventions. He emphasised that the increase was below inflation increase, and without having had to absorb central government budget cuts and with no growth or capital development ambitions, a 1.27% rates increase could have been achieved. 

He continued that the baseline rates increase of 1.27% represented a range of statutory pressures and new initiatives offset by Council’s rate-base growth and continued efficiency programme. In particular, nationally agreed pay awards, including living wage implementation and pension increases had presented a significant challenge in this year’s rates. Increased service provision had also been made for increased waste disposal costs due to Council’s growing population and increased development. This was a significant cost for Council, representing over 12% of the global budget, and a continued focus on recycling and composting was required to ensure these costs were minimised going forward and required targets were met. Other inflationary increases had been absorbed into existing budgets with minimal impact on rates. Provision had also been made for the extension of opening hours in Riversdale Leisure Centre and further investment in rural community services support to provide additional capacity in rural areas aligned to the delivery of the emerging Local Community Plans.  

He added that the continued positive growth in Council’s rate-base is very positive with growth significantly in excess of the Northern Ireland average. Council’s efficiency plan had now realised almost £2.3m of efficiencies and Council would continue to seek all opportunities for further efficiencies to free up further funds for growth and investment. Council’s benchmarking analysis against other Council’s provides assurance that Council’s core services represent value for money e.g. leisure was much less expensive in this Council area in comparison to the rest of Northern Ireland. It was also clear that this Council makes significant additional investment in areas of growth such as festivals and events, tourism and capital development, and in areas of need such as community services.

The Lead Finance Officer expressed his feeling that the most challenging and disappointing aspect of this year’s rates was the central government grant cuts which had a direct impact on our rates proposals of 0.76%. The 2 key areas of cuts applied were Rates Support Grant and funding for community services and advice, the very grants which were targeted towards the less wealthy Councils with the highest levels of deprivation. He advised that the Rates Support Grant is an investment and leverage tool, a means by which the no. 7 district councils with lower rates bases receive a critical investment contribution towards creating growth through enterprise and achieving greater equality of service provision and facilities. The £400k of income lost by this Council through these 2 grant cuts could have delivered a further minimum £6m of capital investment or investment in other strategic priorities identified in Council’s Strategic Inclusive Growth Plan. Furthermore, The Department of Finance had recently issued a briefing paper on the Northern Ireland Budgetary outlook 2018-20 which presented very significant budgetary challenges across all Departmental areas. If implemented, these would have significant implications for individuals, businesses and communities and for Councils in particular who relied heavily on central government funding.  These would also undoubtedly place increased demand on Council services. Council has been strong in its’ opposition to these cuts and whilst recognising the challenges, would continue to be so to ensure any potential cuts were implemented fairly and equitably.

He emphasised that despite this, the key message from this year’s budget was the additional 0.96% investment in Council’s capital plan and jobs and skills initiatives. He reported that the investment made by this Council over the past few years was paying dividends in terms of rate-base growth and employment. He stressed that continued investment in growth was therefore critical, given that capital investment represented over 15% of Council’s overall budget and with almost £100m of projects either completed or progressing with full funding, the new rates would see a minimum further capital investment of £25m. He stated that this would enable Council to drive forward the strategic leisure aspirations and significant PEACE applications at Clondermott and Riverine, continue with the extensive programme of parks and greenway development, provide funding to progress with refurbishment of community centres, and develop major town centre regeneration aspirations. £1.74m of Council’s overall budget was set aside for festivals and events allowing Council to continue to deliver internationally renowned events which would bring continued growth in tourism to the City and District. 2018 would see the return of the Clipper Maritime festival.

He concluded that the District rates increase of 2.99% would mean an increase of £13.10 per annum or 25p per week and would see the average domestic District rates bill increase to £451.07. He explained that rates were calculated based on pence rate x property valuation. On the basis of the average property valuations being lower than in other Council areas, the average ratepayer in the Derry City and Strabane District Council area would continue to pay lower rates bills than average ratepayers in the majority of other Council areas.

The Mayor thanked the Chief Executive and the Lead Finance Officer for their statements.

Councillor Reilly commended that positive steps had been taken to combat central government cuts. He highlighted the increase to the rate, 0.76 % of which was caused directly by cuts to the rate support grant. He stated that the SDLP leader, Mr Durkan MLA had tried to protect the Rate Support Grant but had not succeeded. He also stated that the SDLP had made a proposal not to accept the striking of the rate, however this proposal failed due to political process. He expressed his concern that rate payers would pay the price for the failure in Stormont, since the Civil Service would not engage with Council’s to protect rate payers from these cuts.

Councillor Gallagher indicated that he would not support the striking of the rate. He referred to a Motion passed at the September 2017 Council Meeting and voiced his concerns that striking the rate would be against the corporate position of the Council and would make Council guilty of implementing cuts to the rate support grant and community services. He also commented that letters to the Secretary of State and the Civil Service were not making an impact in tackling this issue.

Councillor Donnelly concurred with Councillor Gallagher’s remarks and added that he could not support a Community Safety Partnership which was led by what he felt was a discredited police force.

Councillor McGinley commented that he did not find the Independent Councillors reluctance to take responsibility for fiscal management in Council surprising.  He also remarked that he felt the SDLP’s refusal to support the budget was a publicity stunt.

He commented that the rate increase of 2.99% would afford Council protection from the cuts to the Rate Support Grant whilst still allowing opportunity for capital investment. He also remarked that due to central government cuts to community services, work would need to take place to ensure frontline funding for community organisations continues to be provided.

Councillor McGinley also welcomed Council’s commitment to the job and skills programme and praised Council staff for their commitment and work ethic. He stated that he hoped that the rates increase would ensure they received a pay rise.

He also highlighted the need for effective strategic leadership which would give rise to first class services, events and festivals.

Councillor O’Reilly stated that he felt by striking the rate, Council had missed an opportunity to oppose the cuts to the Rate Support Grant and community services.

 

Alderman Thompson highlighted the positive elements of the statements and the positive steps which were being taken to keep the area moving forward. He voiced his concerns over Councillor Donnelly’s view on community safety stating that community safety was important to all citizens. He commended Officers on their efforts to combat the challenges which they had faced in establishing this year’s budget.

Alderman Hussey conveyed his support for the striking of the rate at 2.99% and praised Officer’s for establishing a rate which was below the rate of inflation and below the rate of other Council’s.

Councillor P Kelly stated that he would not be supporting the striking of the rate at 2.99% as he  disagreed with some of the cuts which had recently been enforced in  his area, in particular cuts by the Policing and Community Safety Partnership which had impacted on the installation of  a CCTV camera within Strabane town centre.

Councillor McMahon indicated his support for the 2.99% increase in the rate. He stated that he was looking forward to seeing developments such as the new Strabane Leisure centre and the Riverine Project which would regenerate the town. He suggested that it might prove detrimental not to strike the rate.

Alderman Devenney acknowledged his support for the striking of the rate of 2.99%, stating it was a wise decision.