• Text Colour:
  • C
  • C
  • C
  • C
  • Text Size: A A A

Rates Breakdown

The Councils estimated revenue expenditure (net of specific grant income and fees and charges from council services) in 2021/22 will be £65.846m.

Net Revenue Expenditure

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

Environment and Regeneration 39.4%

£25.963m

Health and Communities 17.7% 

£11.663m

Business and Culture 12.5% 

£8.221m

Capital plan 13.4%

£8.804m

City of Derry Airport 5.2%

£3.445m

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

£7.750m

Total Net Expenditure

£65.846m

 

 

A further detailed breakdown of all service costs is attached.

Total Income

For the financial year 2021/22, the net expenditure will be funded from the following sources of income-

 
District rates income (including de-rating grant)

£62.083m

Rates support grant

£2.952m

Transferring functions grant

£0.361m

Reserves

£0.450m

 

Total income

£65.846m

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 2021/22 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 (£)- 

484.69#

442.69 #

Average Regional Rate (£)

442.60

550.83

Average Total Rates Bill for 2021-22 (£)

927.29#

993.52 #

     

# 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 2021/22.

   
     

This year’s District rates increase of 1.89% will mean an average increase of £9.16 per annum or 18p per week and will see the average domestic District rates bill increase to £493.85. Given that the regional rate has been frozen, overall rates bills will rise by 0.99% to an average of £936.45..

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 1.89% and with a freeze in regional rates, this will mean an overall 0.99% increase for 2021/22.

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

  • COVID-19: Rates support for businesses
  • Rates holiday
  • 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

More details can be found at the attached link:-

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

Rates 2021 22

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

Details

% District rates impact

Rate-base growth

-1.10%

Rate-base provision

0.73%

Rates Support Grant

-0.23%

Pay awards and staff increments

2.05%

Statutory pressures and inflation

1.04%

Savings and efficiencies

-0.99%

Baseline rates position

1.50%

Additional service development/ growth proposals

0.39%

Rates position including growth proposals

1.89%

   

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

.FINANCIAL IMPACT OF COVID PANDEMIC

For 2021/22, Council finances obviously face significant uncertainty following the pandemic. In addition to the normal pay, statutory pressures and growth/ new service development asks, the pandemic has provided the following further potentially very significant financial challenges:-

  • Loss of income from services and facilities (primarily leisure, planning, building control, commercial refuse, museums and culture facilities and off street car parking);
  • Exceptional expenditure eg health and safety costs, costs associated with new working arrangements, cemetery costs, communications, IT costs to enable home-working and costs associated with re-opening facilities;
  • Rate-base impact- almost 80% of Council’s gross expenditure budget is funded from rates income (domestic 38.98% and non-domestic (including de-rating grant) 41.34%). The economic impact of the pandemic is likely to have a very significant impact particularly on non-domestic ratebase income as a result of increased vacancies and higher risk of defaults and irrecoverable debt. The risk of appeals against non-domestic valuations also remains a significant risk. Appeals against the 2015 reval resulted in a 2% impact on Council’s non-domestic rates income with a number of appeals still to conclude. A new reval process has just completed in 2020 and this is likely to give rise to further appeals and risk for Council.
  • Waste management costs- the pandemic has seen a significant increase in black and blue bin waste streams, security costs at recycling centres, contract pressures, and an increase in transfer station costs.

As a result of prudent financial planning and significant additional support from Government during 2020/21, including additional Rates Support Grant allocations and rates support for businesses, Council has been able to create reserves to provide contingency for these losses during 2021/22. This will ensure no immediate impact for ratepayers and allow further time to assess the medium-term impact of the pandemic on Council finances and service delivery.

BASELINE PRESSURES EFFICIENCIES AND INFLATION

As noted above, baseline pressures, efficiencies and inflationary related pressures have had an overall impact of 1.5% 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 38.98% of Council’s total expenditure funding and non-domestic income (including de-rating grant) accounting for 41.34%. Despite the pandemic, Council’s “penny product”, updated for latest listing information and assumptions from Land & Property Services, has continued to grow. This includes domestic growth of 0.97% and non-domestic growth of 1.26% with an overall positive impact on this year’s rates process of 1.1%.

Rate-base provision Despite the above, there remains a number of significant and very uncertain risks that are likely to impact on the Council rates income for 2021/22 and beyond following the COVID pandemic. These include an increased risk of irrecoverable debt on the domestic rate-base side as well as successful revaluation appeals and increased irrecoverable debt or vacancies on the non-domestic rate-base side. These risks have been totally mitigated during the pandemic as a result of the financial supports provided by Central Government to businesses and employment grants during the pandemic. This support will however be short-term and, it is important in the context of prudent financial planning that provision is set aside for these challenges. The provision agreed by Council has had a rates impact of 0.73%.

Rates Support Grant Unfortunately, rate-base growth relative to the rest of Northern Ireland means that Council’s relative wealth has increased. This has resulted in Council’s share of the overall Rates Support Grant pot (£15.865m) reducing from 18.84% to 18.61%. Against this, cuts forecast to the overall pot during the 2020/21 rates process have thankfully not materialised. These issues have a combined positive impact for ratepayers of 0.23%. 

Pay awards and staff increments- Salaries and wages account for circa 56% of Council’s overall net expenditure. Any increases to pay will therefore have a significant rates impact. Provision has been made for an expected pay increase (agreed regionally) of 2.75% as well as point of scale increments whereby staff who are not currently on the top point their payscale will receive a further 1%-1.5% pay increase. These issues have had an overall rates impact of 2.05%.

Statutory pressures and inflation- A range of statutory pressures have significantly impacted on this year’s rates. In particular, waste budgets have had to be increased to reflect significantly rising volumes and disposal costs, insurance costs have increased, and additional maintenance costs have had to be provided for to ensure continued health and safety accreditation under OHSAS18001. These issues have had an overall rates impact of 1.04%.

Savings and efficiencies- 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 £599k of savings with a positive 0.99% benefit for ratepayers. As a result, efficiencies realised since amalgamation of the legacy Councils have now reached a cumulative total of almost £4m per annum.

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 0.39% of the rates increase will provide a number of new service development initiatives. As well as new resources to support Irish language and climate change initiatives, this year’s rate will see further investment in Council’s ambitious capital plan.

COMMUNITY AND STRATEGIC CAPITAL PROJECTS AND CITY DEAL

As part of this, Council’s capital programme remains a key priority. 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 the new Council

27,400

0

32,401

0

59,801

Projects approved, in progress and fully funded

40,163

60

12,863

0

53,086

Projects with significant Council funding allocated, a funder identified and awaiting letters of offer

64

1,424

750

0

2,238

Sub – Total

67,627

1,484

46,014

0

115,125

Projects with significant Council funding allocated and no live external funding source currently available

175

0

5,193

13,199

18,567

Projects in progress but not fully funded- some Council funding has been allocated to progress. No external funding source currently identified and will require rates investment to progress

195

0

368

61,942

62,505

City Deal / IFF Projects in Progress

234,258

11,294

1,794

44,029

291,375

Other Strategic Council Projects in Progress

175

79,351

2,388

54,387

136,301

Sub-Total

234,803

90,645

9,743

173,557

508,748

           

TOTAL

302,430

92,129

55,757

173,557

623,873

Having already completed £50m of capital projects in the last 5 years, a further £70m of projects are progressing and 2020/21 will see advancement of a wide range of exciting projects, including:-

  • Progression of 3 significant cross border greenway developments from Derry to Buncrana, Derry to Muff and Strabane to Lifford totalling €20m
  • Development of the new €9m Riverine shared space Community Park project between Lifford and Strabane.
  • Advancement of a range of Community centre developments at Waterside Shared Village, Glenview, Shantallow, Galliagh, Culmore and Ballymagroarty/ Hazelbank.
  • Continued development of play facilities, pitches, recreational facilities and shared spaces across the Council area including at Artigarvan, Castlederg, Donemana, Magheramason, Newtownstewart, Sion Mills, Prehen, Mourne Park and Newbuildings. 
  • Provision of new cemetery provision on the west bank of the City.

In addition to the above, 24th February 2021 has brought the signing of the Heads of Terms for the £250m City Deal and Inclusive Future Fund investment package. This is the single biggest investment package ever secured for this City and Region that will see the creation of 7,000 new jobs, £126m in new wages and £230m of GVA per annum generated for our area. The rates increase will provide Council with resources to drive forward this integrated and ambitious suite of innovation, digital, health, regeneration and tourism projects across the City and District and will also secure Council’s required match-funding contribution to the overall package of investment. Thr projects which will be progressed are as follows:-

Innovation, Digital and Health projects

  • Centre for Industrial Digitisation Robotics and Automation (CIDRA)
  • Cognitive Analytics Research Laboratory (CARL)
  • The Transformation Healthcare Research Innovation Value Based Ecosystem (THRIVE)
  • Graduate Entry Medical School (GEMS)
  • Smart City
  • Digital Enabling Infrastructure Programme

Regeneration, Tourism and Renewal projects

  • Derry Central Riverfront
  • Strabane Town Centre Regeneration
  • Walled City Tourism/ Economic Investment
  • DNA Museum/ Ebrington

This represents significant investment and it is hoped that ongoing discussions in relation to Rates Support Grant cuts will result in further funds being made available to fund both community and strategic projects.

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 2021-2022?

All ratepayers will receive their 2021-2022 rates bill, which is made up of the district rate (52%) and regional rate (48%) set by central government, from Land and Property Services. The date of issue will be confirmed by Land and Property Services in due course.