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Rates Breakdown

The Councils estimated revenue expenditure (net of specific grant income and fees and charges from council services) in 2020/21 will be £63.931m.

Net Revenue Expenditure

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

 

Environment and Regeneration 39.3%

£25.102m

Health and Communities 17.5% 

£11.160m

Business and Culture 12.8% 

£8.163m

Capital plan 13.6%

£8.679m

City of Derry Airport 5.4%

£3.445m

Cross Cutting Support and other costs (incl Council) 11.4%

£7.322m

Total Net Expenditure

£63.871m

 

 

 

A further detailed breakdown of all service costs is attached.

 

 

 

 Total Income

For the financial year 2020/21, the net expenditure will be funded from the following sources of income-

 
 District rates income (including de-rating grant)

 

£60.257m

Rates support grant

  £2.810m

Transferring functions grant

  £0.354m

Reserves

  £0.450m

 

 

Total income

£63.871m

 

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 2020/21 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 (£)- 

484.62

453.75 #

Average Regional Rate (£) 

453.66#

564.60#

Average Total Rates Bill for 2020-21 (£)

938.28#

1,018.35 #

 

 

 

# Estimated figures which will change slightly when the various Council's strike their rates and Central Government regional rate figure is agreed.

 

 

 

 

 

This year’s District rates increase of 3.37% will mean an average increase of £15.80 per annum or 30p per week and will see the average domestic District rates bill increase to £484.62

NON-DOMESTIC RATES

For non-domestic properties, and following the outcome of the recently published Reval 2020 exercise, 2020/21 will see a 2.24% reduction in district rates poundages for businesses. However, given that the average business rateable value in this Council area increased by 5.18%, the proposals will result in a 2.83% increase for an average business ratepayer.   

Land & Property Services (LPS) is responsible for the collection of business rates in Northern Ireland.Land & Property Services (LPS) published draft valuations of all business properties in Northern Ireland on 7th January 2020.

These are available to view online at  https://www.finance-ni.gov.uk/landing-pages/reval2020

LPS have also created a briefing paper about the rates revaluation for the Derry City and Strabane District Council area. It includes facts and figures about business properties in the Derry City and Strabane District Council area that answers commonly asked questions such as ‘What is the non-domestic rates revaluation?’ and ‘Can ratepayers challenge their draft rateable value?.

The briefing document is available  here

rates 2020 21

The 3.37% District rates increase has resulted from the following factors and impacts:-

 

Details

% rates impact (Domestic ratepayers)

Ratebase growth

(1.03%)

Reduced RSG entitlement as a result of ratebase growth

0.32%

Pay awards, pension and harmonisation costs

1.81%

Statutory pressures and inflation

1.81%

Funding from reserves

0.26%

Efficiencies

(0.40%)

Income and grants

(0.30%)

Baseline rates position

2.47%

Central Government budget pressures

0.14%

Central Government- Rates Support Grant cut

0.41%

Baseline rates position after Central Government impacts

3.02%

Additional service development/ growth proposals

0.35%

Rates position including growth proposals

3.37%

 

 

 

 

 

 

BASELINE PRESSURES EFFICIENCIES AND INFLATION

As noted above, baseline pressures, efficiencies and inflationary related pressures have had an overall impact of 2.47% on this year’s rates proposals, the key issues being as follows:-.

Ratebase growth has continued in the current year having a beneficial rates impact. This is mainly as a result of 1.3% domestic property value growth in line with the NI average and resulting from 775 new domestic properties coming into the rating system over the past year. The non-domestic ratebase growth has been more modest at 0.44% (compared to NI average 0.38%) with any growth being hampered by ongoing appeals against the non-domestic revaluation back in 2015.  Members will be aware that Council retains a £1.7m provision in this regard and it is considered prudent to retain this provision at this point in time given that 4.88% of the non-domestic valuation list remains under appeal from 2015 and the new revaluation process for 2020 will potentially lead to further appeals by those ratepayers whose property values have increased.

Unfortunately, ratebase 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 reducing from 19.97% to 18.84%. This has an offsetting negative rates impact to ratebase growth set out above.  

Pay awards, pension and harmonisation costs- Salaries and wages account for circa 54.9% of Council’s overall net expenditure. Any increases to pay will therefore have a significant rates impact. The following issues have impacted on this year’s District Rate:-

  • Expected pay increase (agreed regionally) of 2.75%
  • 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.
  • Harmonisation costs- Council is one of the leading NI Councils in terms of progression of pay harmonisation following the amalgamation of legacy Councils. This year’s rates will ensure budgetary provision has been made in full for all costs in line with the current process.      
  • Reduction in employer pension contributions from 20% to 19.5% as a result of NILGOSC pension scheme now being in surplus following its’ triannual valuation. 

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 disposal costs and falling global commodity values. Waste arisings within the district have risen over recent years reflecting the improved economic conditions and growth in housing etc. with Council having to treat approximately 80,000 tonnes of waste per annum. 

Given the extent of Council’s portfolio of premises and fleet, Council has also been impacted by rising fuel and insurance costs as well as increasing maintenance costs to ensure continued health and safety accreditation under OHSAS18001.                      

Funding from reserves- Council currently funds £600k of its’ recurrent expenditure from its’ District Fund balance. A plan was agreed during 2019/20 rates to reduce this to zero over a 4 year period requiring £150k of rates investment each year over that period.  

Efficiencies- After almost 4 years of the new Council, efficiencies of £3.108m have been identified and realised, mainly through the voluntary severance scheme and a number of other initiatives. It is pleasing to report that further efficiency proposals have been identified for 2020/21 with a positive rates impact and bringing the total efficiencies identified to date from the beginning of the new Council to almost £3.35m. These additional efficiencies have been realised due to voluntary severance in the areas of Assurance, Environmental Health, Animal Welfare and Licensing and ongoing review of all budgets across the organisation.

Income and grants- an additional £172,804 has been applied to budgets for 2020/21 with a positive rates impact. This has been through adjusting income and grant budgets in line with current levels as opposed to any increase in service prices. Despite significant inflationary increases and pay pressures, Council income levels have remained frozen in recent years and Council continues to provide the cheapest access across the 11 Northern Ireland Councils to its’ services (eg leisure, cemeteries). 

CENTRAL GOVERNMENT GRANT CUTS

Unfortunately, the rates process each year sees Council budgets being challenged by cuts passed on from Central Government. There are 2 key issues impacting on this year’s rate process with a cumulative significant rates impact.of 0.55% as follows:- 

  • Planning Pensions- Following the rates process for 2019/20 Council received correspondence from Department of Finance advising of significantly increased employer contribution rates (7.9% increase) to be applied from 1st April 2019. This was clearly required to address an unfunded pension deficit in Central Government, one which no doubt existed at 1st April 2015 when the function transferred. Representations have been made to Central Government for funding to be made available but have been advised that cost pressures after the functions transferred to Local Government are an issue for each Council to manage which is disappointing. This has a current year financial impact of £82,200.
  • Rates Support Grant cuts- This grant is allocated to the 7 less wealthy and most deprived and rural Councils based on ratebase, rurality and deprivation measures to assist towards providing parity of service provision with the more wealthy Councils. As noted above, Council is now entitled to an 18.84% share of the overall pot. The overall pot has however reduced significantly from £20.3m in 2010 to a forecast level for 2020/21 of £14.913m. This is based on a further 6% cut assumption for 2020/21 which has a significant impact on rates proposals. The cumulative impact of cuts to this grant is very significant – as an example, should the grant be restored to its’ original level of £20.3m, this Council would be entitled to an extra £1.015m. Council has written to the Ministers for Finance and Communities in relation to this significant issue as well as inviting the other impacted Councils to participate in a joint delegation. The Minister for Finance has responded and indicated a willingness to join a meeting with the Minister for Communities in the coming weeks to get a better understanding of the challenges being faced. For the most part, the other Councils have also responded favourably in relation to participating in the delegation. Unfortunately, the issue will not be resolved in advance of the deadline for Council to strike its’ District Rate and a budget will therefore have to be struck assuming the continued 6% cut. Should a successful outcome be achieved subsequent to the rates process, it is proposed that the additional funding would be directed towards Council’s ambitious capital programme.

 

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 £4.81m has been invested in new services in that time funded in large part by Council’s ongoing efficiency programme which has realised savings of over £3.3m 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 new Council services and initiatives continues to grow and 0.35% of this year’s rates increase will provide a number of new services development initiatives. This year’s rates will see further new investment including funding of £15k for each of the 7 District Electoral Areas and Strabane Town to take forward the 8 Local Community plans, further investment in community services, UNICEF Child Friendly Cities & Communities Programme, addressing period poverty, funding in conjunction with BIDS for a Strabane Town Centre manager, and also includes provision for costs associated with the new tourist office at Waterloo Place. 

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

Unfunded Balance

Total

Secured

Targeted

£000

£000

£000

£000

£000

Projects completed by the new Council 

23,579

0

29,239

0

52,818

Projects approved, in progress and funding secured / identified

40,189

60

13,819

0

54,068

Projects with significant Council funding allocated with application for funding submitted / in progress

110

5,043

2,047

0

7,200

Total

63,878

5,103

45,105

0

114,086

Projects with significant Council funding allocated with no funding source identified or live funding application

175

0

5,045

13,971

19,191

Projects with no significant funding source identified

15

0

407

59,169

59,591

Strategic Council/ City Deal  projects in progress

3,133

230,330

3,988

103,630

341,081

Total

67,201

235,433

54,545

176,770

533,949

 

Having already completed £53m of capital projects in the last 4 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 Top of the Hill, Waterside Shared Village, Glenview, Shantallow, Galliagh, Culmore and Ballymagroarty/ Hazelbank.
  • Continued development of play facilities, pitches and shared spaces across the Council area including at Artigarvan, Castlederg, Donemana, Magheramason, Newtownstewart and Sion Mills, Mourne Park and Newbuildings.  

In addition to the above, a fund of circa £25m has been ringfenced for further investment in critical catalyst projects. Council is rapidly working towards agreement of Heads of Terms for City Deal and Inclusive Future Fund following the announcement by the UK Government in May 2019 of a substantial £105 million package for the Derry-Londonderry and Strabane City region. Council is anticipating that a further minimum £50m of match funding from NI Executive will shortly be confirmed. This catalyst investment will see investment in a range of innovation and digital projects, the Graduate Entry Medical School at Magee, skills projects, and major regeneration projects in Strabane Town Centre and along the City Riverfront.  

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. 

Festivals and events

With over £1.8m of our overall budget set aside for festivals and events, 2020/21 will see a continued impressive cultural and festivals offering across the District building on the current record levels of hotel occupancy and reflecting our success in hosting internationally renowned events. This summer will see the welcome return of the Foyle Maritime Festival as part of its international programme of events, and following securing the title of world’s best Halloween destination, plans are continuing for another hugely successful festival in October that is set to attract almost 200,000 visitors to our unique celebrations.

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 2020-2021?

All ratepayers will receive their 2020-2021 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.