Huge cut to Stormont support for poorer councils could affect jobs, rates and Templemore Sports Complex build

These are some of the potential implications of a 45% cut to the Rate Support Grant (RSG).

Funding for the seven poorest councils has been slashed from £8.92m in 2022/23 to £4.9m in 2023/24.

Derry & Strabane will receive £982,450 (20.05%) but this is vastly reduced from 2008/9 when the total allocation for the seven councils was £20.5m.

Lead Finance Officer Alfie Dallas told the Governance & Strategic Planning Committee: “Unfortunately, you will be aware the grant quantum is not protected in legislation and as a result you can see how the grant has been eroded over a number of years from its peak level of £20.5m to a proposed of £4.9m for the year ahead.”

Chief Executive John Kelpie said this will have an impact, not only on rates, but on major capital projects.

“When we can utilise recurrent funding to draw down loan charges to fund our capital aspirations, that is the equivalent of withdrawing £48m out of our capital budget and when you think of our key strategic aspirations and the necessity to upgrade, for example, our strategic leisure estate and the challenge we have in trying to fund that, taking £48m out of that capital budget is the impact potentially of these cuts to the RSG.”

He said the RSG cuts could affect jobs.

“We've had to take some initial measures to ensure we protect staff that are potentially impacted by some of these cuts and one of those measures is tighter vacancy control so it is not a freeze on vacancy control but tighter vacancy control to make sure that staff who potentially become at risk - I say that word very strongly at this moment in time, potentially - we do everything we can to protect those staff.”

Michael Doherty, Senior Economist, said Department for Communities was seeking an immediate equality impact response.

The Council proposed sending a response, stating: "RSG must be restored to its original and required levels.

"Failure to do so will see ratepayers in less wealthy and more deprived and rural Council areas continue to pay higher and higher rates poundages as a proportion of their property values compared to those in more wealthy Council areas.”

SDLP Councillor Rory Farrell stated: “In 2008 our share of that pot was £4.1m and it is less than £1m now. An inflationary uplift should have been applied...if inflation was applied from 2008, that £20m pot would be worth over £31m now and our share would be £6.25m but we are getting less than £1m.

"That's a cap of £5.25m that we are losing out on a year that could be used to fund Templemore Sports Complex, Riversdale, a host of capital projects or to pass on savings to the ratepayer.”

People Before Profit’s Shaun Harkin said: “It is clear that DfC are taking a wrecking ball to our council on behalf of the Tory Secretary of State and that the adverse impacts that you have outlined Michael, we will feel it in terms of the council finances but they people across our district in all communities will feel it even more because it is going to mean a loss of further services.”

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