Fears over 150k Rates Support Grant cut

Thursday, 14 September 2017

DERRY City and Strabane District Council (DCSDC) has warned that a cut to a grant it receives from central government will have a 'significant' impact on its upcoming rates setting process.
The Rates Support Grant (RSG), which is received annually from the Department for Communities (DfC), is an essential element of council's baseline funding. It is a pot of cash provided to the seven less wealthy councils to assist towards creating a balance and parity of service with other councils.
 Last year, 18.3 million in rates support was paid out to the entitled councils, with the local authority receiving 3,756,990.
 However, the DfC has confirmed that the fund has been slashed by four per-cent leading to a reduction of around 150,000 for DCSDC and it is likely the grant will be further cut in future years given the current funding challenges in central government. The council's allocation has been reduced to 3,607,114.
 It means council may have to introduce a rates hike as it explores other mitigation measures to plug the gap and the associated financial risks posed by the funding cut. And, there are fears that the grant could be axed altogether. Concerns over the cut were revealed in a report at the monthly meeting of the council's Governance and Strategic Planning Committee.
 The document prepared by the council's lead finance officer, Alfie Dallas, and presented to councillors also outlined a surplus of 411,000 which has been generated for the first three months of the financial year.

 Whilst describing the surplus as 'positive', Mr Dallas says there are ongoing concerns over the RSG and the implications for the council and by extension, its ratepayers.
 He confirmed the local authority will be joining other affected council areas with a view to meeting senior civil servants or - if the Stormont Executive is restored - ministers to lobby against the grant cuts.
 "It is disappointing to note the impact of the 4 per cent cut applied to Rates Support Grant and this, along with further potential cuts to this and other central government grants, presents significant challenges for the upcoming rates estimates process," he said.
 "Members will be aware that officers are liaising with the other affected councils to organise a multi-council delegation with relevant ministers or central government personnel in the coming weeks."
 He added: "Council is reporting a surplus of 411k for the first three months. This is a positive position.
 "Whilst it is hoped that further savings will materialise in the remaining nine months of the financial year, this cannot be assumed at this stage given the challenging central government funding position and potential further grant cuts.
 "Further consideration will be given to potential reinvestment of this surplus in other corporate priorities later in the year when the outturn can be projected with more certainty."
 Independent Strabane councillor, Patsy Kelly, described the situation as "worrying".
 "The Rates Support Grant comes from central government," he said. "It's a big lump of cash that comes off the rates and helps council with striking the rate every year.
 "It is vital funding to the councils, especially us in the North West, and any reduction is a huge concern. It is worrying and it will present challenges coming into the next financial year in terms of trying to strike a rate that lessens the burden on ratepayers whilst also ensuring that the council can put out the same level of service.
 "Budgets are stretched as it is and I'm sure that the finance department and directors will already be looking at this to see where we go from here and what measures can be put in place."
 Cllr Kelly said ratepayers are suffering due to the ongoing impasse at Stormont and encouraged parties to restore the institutions.
 "It's very important that the Executive gets back up and running. Everyone is in limbo and ultimately it is local people, community groups and organisations who are being affected. The DUP and Sinn Fein need to get their acts together and resolve the issues for the betterment of the people."


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