Could Rates Increase By 35% After Councils Merge In Two Years?
COULD the new South Down super-council to come onstream in two years time introduce a 35 per cent hike in the rates when Down District Council merges with Newry and Mourne Council?
A major political row is brewing as Councils across Northern Ireland are getting ready to kick against the decision taken from the NI Executive that councils will in fact have to foot the bill for the changeover from 26 to 11 councils in two years time.
Many local politicians are committed to the reforms of public administration but there are difficulties over how this is to be implemented and paid for.
In June 2002, the Review of Public Administration was launched by the Northern Ireland Executive . Its aim was to ‘review the arrangements for the accountability, development, administration and delivery of public services in Northern Ireland.’
In a joint motion last night at a full Down District Council meeting from SDLP Councillor Dermot Curran and Terry Andrews (Independent), laid their cards on the table and proposed that the council would not support paying for the Review of Public Adminstration costs of the councils’ reorganisation.
The motion was carried unanimously that Down Council did not think it was right to pay costs that should be the responsibility of central government. It was agreed to write to the Executive to express this view, and to write to Councils across Northern Ireland seeking their support and solidarity.
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Councillor Terry Ardrews (Independent) said: “Basically central government is dumping the costs of the local government transition onto the ratepayers. This is unacceptable. It is equivalent of going into a restaurant and eating a meal and then not paying for it. This has been foisted on us and we have been lumbered with the costs.
“There was much heated discussion initially about whether there would be 11 or 15 councils. Now that is sorted out, we need to determine how much this is all going to cost… and importantly, who is going to pay for it.
‘Councils are cash starved at the moment and are struggling to maintain services. If the rates went up to 35 per cent we would be faced with huge service cuts. Ratepayers would not accept this.
Councillor Eamonn O’Neill (SDLP) said: “The real savings from the RPA won’t come for another 15-20 years. The Assembly expects Council’s to borrow the finds in the meantime… this is totally unrealistic. The officer of the Newry and Mourne and Down District joint transition committee said that the change-over could cost £7.6 million.
“The bottom line is that this would represent a 35 per cent increase in the rates – this is just not tenable. There is no way that we can put forward such a large rates increase. We will definitely have to look at loan options and just hope that we get some common sense injected into this process from the top down.”
Councillor Robert Burgess (UUP)said: “The Assembly has the funds to sort this out and could support it if they wanted to. The UUP is opposed to such a huge increase in the rates if this went ahead. The costs of RPA may just not be saddled on the public ratepayer.”
Councillor Billy Walker (DUP): “The Down District DUP supports this motion. The bottom line is who is going to pay for this? We believe that it is central government that is calling on the review so the process should be funded from Stormont. It would not be fair on the rate-payers. If they had to face this huge bill it is the local councillors who will bear the brunt of the public reaction. There is a clear contradiction – councillors don’t want to pay this bill across Northern Ireland yet Stormont MLA’s are dropping RPA on us from a great height.
“RPA could be self-financing but with will take almost 20 years to pay it back. I’m quite happy to have a system of 26 councils that are more empowered. That could work well. Already the clock is ticking and the shadow transition Council will be elected in June 2014 – 16 months away. We have already seen a two year roll over on the councils’ lives continuing while the details are sorted out. There is always that possibility that the whole process could collapse.”
Councillor Stephen Burns (Sinn Féin) said: “Sinn Féin has been supportive of the principle of local government reform within the north of Ireland. We believe that that now is the time to review and refresh how localised public services are best delivered to local ratepayers. We wish to see local government deliver additional services and functions overseen with robust governance and ethical standards principles which would ensure that these functions are administered in a fair and transparent manner.
“We recognize that for the ratepayers and particularly local government staff, these last few years of `Stop-Start Reform` has been demoralizing and unnerving. Going forward what is required is clarity and certainty for all those involved within the process.
“The amalgamation of 26 councils to 11 new councils unfortunately comes with a cost. Whilst there is no doubt that in the long run councils will benefit from efficiency savings resulting from the transformation, these will be in the medium to longer term. Councils will need to find finance for issues such as Transition management teams, ICT systems convergences, senior officers and staff redundancy packages, capacity building and of course the vexed issue of rates convergences.
“We remember all too well the PWC report of 2010 which put a cost on the reform at somewhere in the region of £118million. There has been the expectation that the Executive would if not fund all of the local government reform costs then at least it should fund those aspects of the reform which did not in themselves realize cash saving efficiencies.
“Councils have also begun to embrace the Improvement Collaboration and Efficiency (ICE) Programme which sees councils coming together collaboratively to make savings. The pooling of council`s resources into areas such as joint procurement opportunities will ultimately realize cash savings, but it will take time for this work to properly evolve. ICE itself can not finance RPA reform. ICE will be used as an investment tool for the future. Councils are continually under constant financial pressures to do more for less.
“The challenges of European Directives on Waste Management, recycling and diversion away from landfill are just some of the major challenges which councils are facing at the moment. Because of the wider economic downturn councils are generating much less from Building Control fees and Leisure Centre incomes, all together particularly challenging backdrops.
“There is also the issue of rates harmonization which needs resolved. Amalgamating councils with significantly different existing rates bases will have to see these merge at some point. It would be simply unfair to be asking councils with the smaller rate level to pay the larger level on day one of the new council being formed. A method will have to be found which would allow for the gradual harmonizing of these rates basis` over time.”
He added that “Sinn Féin believes that there should be up-front financing for RPA costs. Councils are best placed to know what they need in order to make the transition. They feel that they have not been listened to and ignored within this debate. We would be supportive of local councils getting monies to assist with RPA. Transition and change in any setting not least a radical change that is expected under RPA is not normally easy or straightforward. Even when adequately resourced the challenges are many. But to expect a successful transition under RPA without sufficient resources is impossible.”
Councillor Cadogan Enright (Independent) : “I agree that we should resist these costs are being imposed on our Council area and feel that if Sammy Wilson wants to drive through RPA, he should pay for it. There are no savings in direct services to be had from RPA. But I would also criticise the big parties on Council for doing nothing at their joint Transition meetings to reduce those costs that they can
“There are currently no proposals being brought forward to have a single payroll department, a HR department, a single customer service or admin department or a single computer system. I estimate that the two Councils could save up to £3 million per annum by examining these areas”
“I call for immediate action in these areas, the only loser in a stand-off between the Council and the Assembly is the Ratepayer. We need to put our best foot forward and start saving money by sharing back-office services now.”
Councillor Patrick Clarke (Alliance) said: “The RPA should benefit all in our society and it is now essential that everyone sits down and talks about this. These discussion should include the DOE and the Department of Finance and Personal. We need to break thgis stalemeate between local and Assembly government. A positive solution would help restore confidence in the political process. Good relations should be central to all reform.”
Councillor Mickey Coogan (Independent) said: “All of the 26 Councils in Northern Ireland are concerned about this development and something is just not right. It seems that the DUP MLA’s and the Department of Finance and Personal are not giving way on this.
Councillor Willie Clarke (Sinn Féin) said: “We need a day of action at Stormont. There seems to have been a breakdown between the MLSA’s and the Executive. They are not being heard. There is a lot of frustration around the chamber at Stormont. We may need to bring the people on to the street yet.
Councillor Derrmot Curran (SDLP) thanked the councillors for unanimously supporting the motion to seek the support of the 26 Councils that the costs of RPA be supported by the Assembly.