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Rates Breakdown

The Councils estimated revenue expenditure (net of specific grant income and fees and charges from council services) in 2022/23 will be £67.964m.

Net Revenue Expenditure

The following chart demonstrates how this money will be spent across each of our Service Directorates:-

 

Environment and Regeneration 39.4%

£27.087m

Health and Communities 17.7% 

£12.358m

Business and Culture 12.5% 

£8.524m

Capital plan 13.4%

£8.660m

City of Derry Airport 5.2%

£3.445m

Cross Cutting Support and other costs (incl Council) 11.8%

£7.890m

Total Net Expenditure

£67.964m

 

A further detailed breakdown of all service costs is attached.

 

 

 

 Total Income

For the financial year 2022/23, the net expenditure will be funded from the following sources of income-

 
District rates income (including de-rating grant)

 

£64.972m

Rates support grant

  £2.268m

Transferring functions grant

  £0.373m

Reserves

  £0.350m

 

 

Total income

£67.964m

 

Rates breakdown per household

The following table is based on the average property value and details what the average ratepayer in the Derry City and Strabane District Council will pay in 2022/23 compared to the N. Ireland Council average:

Domestic Ratepayer Examples Based on Average House Values

 

Derry City and Strabane

NI Council Average

 

 

 

Average Property Value (£)

96,764

120,425

Average District Rate (£)- 

510.86#

451.54 #

Average Regional Rate (£)

442.60

550.83

Average Total Rates Bill for 2021-22 (£)

953.45#

1,002.37 #

 

 

 

# Estimated figures which will change slightly when the various Council's strike their rates. Central Government has confirmed that the regional rate will be frozen at it’s current level for 2022/23.

 

 

 

 

 

This year’s District rates increase of 3.44% will mean an average increase of £16.97 per annum or 33p per week and will see the average domestic District rates bill increase to £510.86. Given that the regional rate has been frozen, overall rates bills will rise by 1.81% to an average of £953.45..

 

NON-DOMESTIC RATES

Non-domestic rates are a rate for all business properties, such as offices, factories and shops, with bills based on the rental value of your property as at 1 April 2013 and as updated by the recent Reval 2020 exercise.

Non domestic valuation lists as updated following the recent Reval 2020 exercise can be found online at the attached link:-

https://www.finance-ni.gov.uk/services/non-domestic-valuation-list.

Non domestic ratepayers will also see District rates bills increase by 3.44% and with a freeze in regional rates, this will mean an overall 1.81% increase for 2022/23.

There are a range of reliefs available to business ratepayers. These include the following:-

  • Small Business Rate Relief
  • Small Business Rate Relief for small Post Offices
  • Charitable Exemption for rates
  • Sports and Recreation Rate Relief
  • Residential Homes Rate Relief
  • Industrial Derating
  • Non-Domestic Vacant Rating
  • Hardship Rate Relief
  • Rural ATMs

In this Council area, 15% of business ratepayers are fully exempt from rates; 66% are small businesses who can avail of small business rates relief ranging between 20% and 50% of their rates bills; and a further 3% avail of de-rating relief of between 70%-80% of their rates bills.

More details can be found at the attached link:-

https://www.nibusinessinfo.co.uk/content/help-available-business-rates

 

Rates 2022 23

The 1.89% District rates increase has resulted from the following factors and impacts:-

 

Details

% District rates impact

Rate-base growth/ provision

-1.23%

Rates Support Grant

-0.10%

Rates Support Grant baseline cut

1.18%

Pay awards and staff increments

1.78%

Statutory pressures and inflation

1.93%

Savings, efficiencies and income

-0.57%

Baseline rates position

2.99%

Additional service development/ growth proposals

0.45%

Rates position including growth proposals

3.44%

 

In addition to above, Council has also set aside funds in reserves as contingency for continued losses associated with the COVID pandemic and other pressures..

.

BASELINE PRESSURES EFFICIENCIES AND INFLATION

As noted above, baseline pressures, efficiencies and inflationary related pressures have had an overall impact of 2.99% on this year’s rates proposals, the key issues being as follows:-.

Rate-base growth Council relies heavily on rates income to fund services with domestic rates income accounting for 39.32% of Council’s total expenditure funding and non-domestic income (including de-rating grant) accounting for 41.23%. Positively, Council has experienced positive rate-base growth in recent years and has continued to do so during 2021/22 despite the pandemic. Council’s domestic rate-base has grown by 2.07% due to continued new housing development, and Council’s business rate-base has grown by a much smaller 0.33%, giving an overall average growth of 1.17% since the 2021/22 rates process. Non-domestic rates growth has been significantly impeded by successful appeals against Reval 2020 rates revaluations.

Council will continue to hold a provision of £400k (reduced from previous level of £450k) within it’s rates as well as a £1.9m reserve to mitigate against the significant risk associated with non-domestic revaluation appeals (which can be backdated until April 2020) as well as the ongoing risk to Council’s rates income following the pandemic.

These will have a positive impact on this year’s rates process of 1.23%.

Rates Support Grant This grant is in place to assist the less wealthy and more deprived and rural Councils provide parity of service provision with the more wealthy Councils. Council’s share of the regional allocation (£15.865m) has increased from 18.61% to 19.02% with a positive impact for ratepayers of 0.10%. 

Against this, a 25% cut was applied during 2021/22 which has reduced the regional allocation to £11.924m. This has resulted in a loss of income to Council of £750k and an associated 1.18% rates impact. Council is hopeful that this cut will be reversed once the Executive budget for 2022/23 has been agreed with any benefit being allocated to further progress Council’s ambitious capital programme.

Pay awards and staff increments Council provides employment for circa 1,000 people and salaries and wages costs account for £36.83m and represent a significant 48.14% of Council’s overall gross expenditure budget. Staff pay awards are negotiated at a national level and Council is estimating that a 2.5% award will be implemented for 2022/23. This is a challenging estimate given that agreement has not yet been reached on the 2021/22 pay award. In addition, Council has also had to budget for the recently announced 1.25% increase to employer national insurance contributions.  

These issues have had an overall rates impact of 1.78%.

Statutory pressures and inflation-  With inflation running at 5.4% and projected to rise to further, a range of statutory pressures have significantly impacted on this year’s rates. In particular, fuel/ insurance and utility costs which have seen very significant recent rises, waste budgets have had to be increased to reflect significantly rising volumes and contract costs, digital transformation costs have been provided for and provision has been made for costs associated with assuming the responsible manager role at Creggan Reservoir. These issues have had an overall rates impact of 1.93%.     

Savings, efficiencies and income- In light of the wider challenges, significant effort has continued to drive further savings and efficiencies during this year’s rates process. These efforts have realised a further £230k recurrent savings and bring efficiencies realised since amalgamation of the legacy Councils to over £4.1m per annum which has been reinvested in growth and new services. In addition, Council is in receipt of some additional grant funding in the areas of tobacco control, home safety and PCSP which will help offset recurrent pressures. These issues will have a positive rates impact of 0.57%.

Council recoups 14.53% of it’s costs from grants and income from services. This compares to an average of 20% across Northern Ireland. Despite significant inflationary increases and pay pressures, Council charges have remained frozen in recent years with additional costs associated with income generating services continuing to be fully borne by ratepayers. Ratepayers in this Council area therefore enjoy much cheaper access to Council services such as leisure, cemeteries and off street car parking. 

FINANCIAL IMPACT OF COVID PANDEMIC

In addition to the rate-base risk already highlighted, the pandemic continues to pose other significant financial risks in relation to ongoing service delivery and associated costs as well as service income generated from Council services. The pandemic continues to result in a loss of income from services and facilities (mainly leisure), exceptional expenditure, health and safety costs, sickness and overtime costs as well as an increase in waste management costs. Thankfully, this risk has been fully mitigated up until 31st March 2022 as a result of Department for Communities funding for financial losses and DAERA funding for additional waste management costs meaning that Council has been able to retain contingency plan and other savings in a COVID reserve totalling £2.96m to provide contingency for the ongoing risks into 2022/23.

SERVICE DEVELOPMENT AND NEW INITIATIVES

Council has invested significantly in growth and new services since it came into being in 2015. A recurrent sum of over £5m has been invested in new services in that time funded in large part by Council’s ongoing efficiency programme which has realised savings of almost £4m to date. This investment has been across all areas of Council, from its’ extremely ambitious capital programme to community services, tourism, festivals, Cultural venues and organisations, litter picking of rural roads, marketing and community planning.

Demand for Council services continues to grow and 0.45% of the rates increase will provide a number of new service development initiatives. As well as further investment into Council’s ambitious capital programme, new recurrent funding of £120k has been provided to support District Electoral Areas in relation to Local Community Planning and £22k provision has been set aside for Council’s share of costs associated with Sperrin Future Search project. In addition, £200k further funding has been earmarked in reserves for 2022/23 to facilitate continued ESF skills investment until 31/3/23, and rural capacity funding of £150k has been provided to provide support to the Local Growth Partnerships in the development of rural project external funding applications over the next 18 months.

With over £1.8m of our overall budget set aside for festivals and events, 2022/23 will see a resumed impressive cultural and festivals offering across the City and District. Commencing with the highly anticipated Illuminate festival in February, this summer will see the welcome return of the Foyle Maritime Festival as part of its international programme of events, and plans are continuing for another hugely successful Halloween festival in October. In an attempt to aid recovery, Council has also added additional investment of £116k this year in response to the ever growing demand for new community festivals and events.

COMMUNITY AND STRATEGIC CAPITAL PROJECTS AND CITY DEAL

The most significant area of growth investment and requirement for new investment going forward is Council’s extensive and very ambitious capital plan as part of its’ overall Strategic Inclusive Growth Plan. Council sets aside over 14% of it’s annual budget to progress capital investment and finance associated loan and revenue implications. Significant progress has been made as summarised in the table below:-

Details

External funding

Council funding secured

Balance

Total

Secured

Targeted

£000

£000

£000

£000

£000

Projects completed by DCSDC

35,254

0

37,099

0

72,353

Projects approved including those awaiting letters of offer to complete their full funding package

53,690

4,472

15,826

440

74,428

Strategic and economic projects (including City Deal and IFF) fully funded or with funding source identified

236,251

9,540

991

0

246,782

Fully Funded and Approved Projects

325,195

14,012

53,916

440

393,563

Projects not yet fully funded

43

15,950

1,729

103,297

121,019

Strategic and economic projects not yet fully funded

198

79,970

2,753

96,743

179,664

Sub-Total: Projects not fully funded

241

95,920

4,482

200,040

300,683

 

 

 

 

 

 

TOTAL

325,436

109,932

58,398

200,480

694,246

 

The following key points will be noted:-

  • The new Council has delivered on £72.353m of community and statutory capital investment projects since 2015 of which £35.254m has been secured from external sources. This includes recently completed projects such as Shantallow Community Centre, Melvin Arena upgrade, Newbuilding pitch improvements, Castlederg shared spaces and access improvements, Magheramason Play Park & MUGA as well as Sion Mills Play Park.
  • Council has a further fully funded and affordable programme of £74.428m of community and statutory capital projects which is currently on the ground and being delivered across the Council District. £58.162m of this investment has been secured from external sources, representing substantial leverage on Council investment. This includes projects such as Sperrin Sculpture Trail, Castlederg Greenway, Galliagh Community Centre, Waterside Shared Village, Artigarvan football pitch as well as the recent significant announcement in relation to the securing of Levelling Up funding for Brandywell Sports Centre/ Daisyfield pitches, St Columbs Park Acorn Farm and Derg Active.
  • Council is now working towards the delivery of a further £247m of significant strategic and economic projects (including City Deal and IFF) eg Strabane Canal Basin Regeneration, Central Riverfront / Walled City/ Queens Quay Regeneration, Strabane Public Realm, DNA Museum as well as an ambitious programme of innovation, digital and health investment. Funding and capital financing costs have been fully identified for these projects and Council is imminently anticipating Government sign-off on the DNA Maritime Museum and Strabane Public Realm project as the first phase of delivery. Recent recruitment has ensured that the additional staff resources required to complete the Outline Business Case process for the City Deal and IFF projects is now in place. These projects will see £991k of Council capital investment lever external funding of £245.791m (mainly through City Deal/ IFF) representing a very substantial £246 of external investment for each £1 of rates investment made by Council.
  • Council has approved a medium term capital financing and funding strategy with a view to delivering a further £120m of capital investment (£100m strategic and economic projects and £20m community projects). The baseline District rates proposal (3.44%) includes £150k of new capital investment/ loan charge provision. Alongside this, should the regional recurrent rates support grant budget be restored to it’s 2020/21 level of £15.865m by Department for Communities, Council will be entitled to a further £750k which will be added to Council’s capital budget. These additional investments would obviously add significantly to Council’s ability to further progress the targeted £120m of additional capital investment as set out above.

 

STRATEGIC GROWTH PLAN

Council will work right across the entire City and District, both urban and rural, with all of its partners and stakeholders, at a Cross Border level through the new North West Partnership arrangements, at National level with Government both North and South through the North West Strategic Growth Partnership and through its many contacts, connections and diaspora at European and International level to drive forward this North West City Region /Council area and to advance and progress all of the objectives of the City and District’s Strategic Growth Plan.

when will I receive my rates bill for 2022-2023?

All ratepayers will receive their 2022-2023 rates bill, which is made up of the district rate (54%) and regional rate (46%) set by central government, from Land and Property Services. The date of issue will be confirmed by Land and Property Services in due course.