Dodds unveils Rates package for Councils

Finance Minister, Nigel Dodds, has announced a package worth up to £8milliion in the next rating year, to address local councils’ concerns about revenue levels.

In announcing the move, the Minister, who has responsibility for rating matters, highlighted that he had listened to the views of many stakeholders before making his decision.

Mr Dodds said: “I listened carefully to the concerns put forward by councils, the Northern Ireland Local Government Association and MLAs over recent weeks and I believe that my decisions will deliver real and immediate help to councils.”

The Minister highlighted that he had taken his decisions against the backdrop of a difficult economic situation that was affecting many organisations. He pointed out that the fall in income to district councils, and impact of adjustments made following appeals by BT and MOD, would have a similar impact on the Executive’s regional rates revenue.

The Minister continued: “I want to be able to provide assistance to councils quickly. For this reason I have worked within the constraints of the current rating system and its legislation to ensure that I can deliver assistance immediately.” Moving on to explain the detail of the package, the Minister said: “In order to provide meaningful help to councils, I intend to move in three ways. I have decided that:

• Many councils were facing a position of having to repay, in one lump sum next year, money received in previous years from MOD and BT but which have been the subject of successful appeals. For those councils who are in a general repayment situation, I will allow them to offset this amount through staging the MOD and BT reductions over five years;
• Additional help will also be provided to councils by changing the way their net revenues are calculated, providing additional benefits to councils worth £4million next year; and
• I will also ensure that some of the additional costs associated with the development of new IT systems are not passed on to councils, providing a one off benefit to councils of £0.6million.”

In conclusion the Minister said: “This package is a proportionate, necessary and affordable response to the difficulties faced by councils next year. It is not a bail out but is a response to the fact that councils faced a number of exceptional one off items next year that would have hit them just at the same time as they seek to manage the wider impacts of the economic downturn. I anticipate that my package of measures will provide additional support worth up to £8million to councils next year.

“It provides assistance for all councils, at what is a difficult time for local and regional government and the wider business community in Northern Ireland.”

Notes to Editors:

1. The sums owed from all councils, as a result of the BT and MOD settlements amount to around £5.6million, the maximum that could be phased over five years. The maximum benefit to councils next year (covering actual income towards the end of the year and providing assistance with rate levels) will be up to £3.3million.
2. Councils will no longer have to pay a 3% contribution towards the cost of administering housing benefit, providing a benefit of £2.4million in 2009/10. There will also be a one off reduction in the cost of collection, of £0.6million, associated with the upgrade of LPS’ IT systems. The impact of the landlord allowance, for NIHE properties, will also be reduced, benefiting councils by around £1.6million in 2009/10. In total this represents benefits of £4.6million in 2009/10.
3. An allowance is payable to landlords where they agree to pay the rates on their property. This is viewed to be a more cost effective mechanism than individual rates collection on each of the properties. In respect of NIHE properties the allowance relates to over 100,000 properties. The reduction in the impact of this allowance on councils, for NIHE properties, will be provided for over a period of two years, pending a review of the level of the allowance more widely prior to the introduction of the rating of empty homes.
4. New subordinate legislation will be required to give effect to the abolition of the 3% contribution for housing benefit costs, the one off reduction in the cost of collection and reducing the impact of the landlord allowance on councils, for NIHE properties. This will be subject to negative resolution in the Assembly and will be introduced shortly.
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