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Growth and development main focus of 2019 budget for Derry and Strabane

05 February 2019

Members of Derry City and Strabane District Council have this afternoon given their backing to the Council’s budget for the 2019/2020 financial year, and plans to further progress the ambitions of the Strategic Growth Plan and secure a City Deal for the City and District.

Of the agreed 3,46% District rate increase, 0.37% represents unavoidable statutory pressures whilst 3.11% represents investment in new services and initiatives and strategic projects closely aligned to our ambitious City Deal proposition and with the aim of driving continued growth in our City Region.

Essentially, in the absence of growth investment, Council would be striking a rate today significantly lower than inflation. This has been enabled by an ongoing efficiency programme in which Council has now delivered and achieved almost £3.108m of savings to its annual revenue budget.

Today Members were told by Council’s Lead Finance Officer Alfie Dallas, that these efficiencies have enabled significant funding to be channelled into a wide range of projects already transforming local communities, and that work would continue into the next financial year. He added that the key message from this year’s budget is the additional 2.45% rates investment to provide the additional resources and capital match funding required to drive forward Council’s City Deal proposition and strategic capital projects.

However, Council has continued to face a number of challenges due to a range of statutory pressures, he explained:  “In particular, nationally agreed pay awards, pay alignment and pension increases have presented a significant challenge in this year’s rates,” he said. “Increased provision has also been made for increased waste collection and disposal costs due to the increased development and number of properties in our district and increased contract costs. “This is a significant cost for Council, representing over 12% of our global budget, and a continued focus on recycling and composting is required to ensure these costs are minimised going forward and required targets are met.”

The most challenging and disappointing aspect of this year’s rates is the Central Government grant cuts which have had a direct impact on our rates proposals of 0.26%, Mr Dallas stressed. “Cumulatively, the Council has now lost out on £421k of Rates Support Grant since cuts commenced in 2016/17, income which could have delivered a further minimum £6m of capital investment or investment in other strategic priorities identified in our Strategic Inclusive Growth Plan,” he informed members.

Additional demands are now being placed on local councils in terms of driving economic development and stability, and Mr Dallas appealed to central government to take on board these growing pressures when considering the allocation of the Rates Support Grants.

Speaking after the meeting Mayor of Derry City and Strabane District, Councillor John Boyle, said the approved budget would continue to accelerate growth here in the North West.

He said: “Investment in growth is essential and we must continue to build on the significant progress that has been made so far in realising the objectives of our Strategic Growth Plan,” he told Members.

“Work also continues on securing a City Deal for the NW City Region and in preparing ourselves for the major changes we can anticipate in terms of enhancing our infrastructure and other major capital developments. We can’t stand still – we must continue to progress Council’s strategic capital projects, provide contributions towards Council’s City Deal proposals, and the leveraged investment that will secure, as well as address a number of new service demands.

“I want to acknowledge the extensive work that has gone into preparing this budget and meeting the challenge of balancing the ongoing need for investment with the increasing demands on services, as well as offering affordability for the public in terms of the services and facilities managed by Council.”

Council Chief Executive John Kelpie said the focus of this year’s budget was looking forwards and maintaining the momentum behind Council’s City Deal negotiations. “Last year we received the green light from the Chancellor regarding the bid for a City Deal and much work has been ongoing behind the scenes in pursuit of what will be a transformational investment in the City Region,” he explained.

“The proposals incorporate the strategic leisure aspirations and ambitious town centre regeneration projects set out in the Strategic Growth Plan for Derry and Strabane and a portfolio of critical catalyst infrastructure, innovation and skills projects required to develop and improve our City region.

“This year’s rates proposal will ensure the necessary staffing resources and provide capital match funds of £20m as a leverage tool to ensure the Central Government investment required to bring these key projects to fruition.

“I also want to stress the importance of supporting local councils in their efforts to ensure the continued provision of the Rates Support Grant. This is a critical investment and leverage tool, a means by which the seven district councils with lowest wealth and highest levels of deprivation receive a critical investment contribution towards creating growth through enterprise and achieving greater equality of service provision and facilities.”

The District rates increase of 3.46% will mean an increase of £15.58 per annum or 30p per week and will see the average domestic District rates bill increase to £465.88. Rates are calculated based on pence rate x property valuation.

On the basis of the average property valuations being lower than in other Council area, the average ratepayer in the Derry City and Strabane District Council area will continue to pay lower rates bills than average ratepayers in the majority of other Council areas.