CC&G: Council face £569,773 cut in Rates Support Grant

On May 13, 2021, the council received correspondence from the Department for Communities advising that the opening baseline for 2021/22 would be reduced to £11.924m, representing a very significant 24.84 per cent cut from the current £15.865m.

Causeway Coast and Glens Council’s  2021/22 allocation has now been reduced to £1,596,210 from £2,165,983 for the 2020/21 financial year, representing a significant £569,773 reduction from budgeted levels.

Members of the Corporate Policy Committee received a report outlining this from Chief Finance Officer Mr David Wright

The Rates Support Grant is allocated to the seven ‘less wealthy and most deprived’ councils in Northern Ireland. The four wealthiest councils, therefore, are unaffected by these cuts.

Mr Wright said: “We received additional Rates Support Grant (RGS) monies during 2021, the last tranche of it came on March 21 when an additional £4m was added to the RSG pot across the seven councils who receive it.  We were given additional funding of £546,104 which was all well and good until the letters came through and they have basically taken the £4m from the 2021/22 pot.

“To put that in context, that was informed to us well after we had already set our rates, so the effect of that is they have created a £528,114 funding gap in our 2021/22 budgets over which we have no control.

“You are talking about a 25 per cent cut in a grant and that’s a huge cut to make in any one area.  It only affects seven out of 11 councils and has no effect on the Department for Communities business so it’s an easy cut for them to make.

“We do believe a robust response is needed to this and I think it needs to come corporately.”

The report carried the draft of a letter the council officers recommended be sent to the Department for Communities. It also recommended that councillors take the matter up with party colleagues and MLAs (Members of the Legislative Assembly) and that officers be authorised to contact colleagues in the other six councils affected by this funding cut to agree on a united response.

UUP Alderman Norman Hillis described it as “appalling”.

“This is a good example of giving with one hand and taking away with another,” he said. “When you look at the figures – from £15,865,000  to £11,924,000 – it’s a huge drop to the least wealthy councils. 

“It seems to be the less you have the less you are definitely going to get and I do think we need a really strong, robust retort to this major cut.

“A few years ago, I do recall going along to the council offices of Derry & Strabane Council and the other six councils joined with us and put a heck of a lot of pressure on at that stage and we did succeed in getting a reversal of the Ministerial decision.

“One of the things that really annoys me is we go through the whole rates process, we are running around trying to save a little bit of money here and a little bit of money there, you are depending on this, they wait until you set the rates and then they snatch it away. I think it is pretty appalling!”

Referring to the recent news about the £1.5m Covid-19 grant Royal County Down Golf Club received, UUP Councillor Darry Wilson suggested; “Perhaps we should write at the bottom of the letter we are a golf club and then maybe the Department for Communities would send millions of pounds to us and that’s no slight on any golf club that applied for funding.

“We have seen money shovelled out over the past year willy nilly and now we see a reduction in the Rates Support Grant which is going to impact every citizen in the borough so we must be robust on this and be persistent and tenacious even if we do not get the response we want. I think we need to keep going back.”

DUP Alderman George Duddy agreed the councils involved should show a united front.

He said: “This is a massive cut. They seem to sit up there at their leisure and wait for councils to set their rates, which they make us do, and then they decide how they are going to impact the very people who pay those rates. 

“Given the DfC (Department for Communities) contributed a huge amount of money to those during the pandemic who were vulnerable, surely even if they sat and looked at their own statistics, the help that was put in this area to those who were less well off and vulnerable, they should have taken some cognisance of fact. 

“We have a number of neighbourhood renewal areas within our borough, not only that we have a large number of areas with small pockets of deprivation which they seem to have totally ignored.

“It is unfortunate you have to write a letter to central government to explain to them the impact they are having on the very people they are charged with looking after. 

“Maybe the DfC should take a particular interest in where they put their money until we get the very people that need that help and support are sorted out and then we can look at some of the other projects which they fired money at without any proper consideration.

“When you consider that amount of around £550,000 that would be at least another 1.3 or 1.4% onto our rates which we were totally unaware of.

“If it takes seven or eight councils to sit down together to get DfC to reverse their decision then that’s what we have got to do.”

The Chief Finance Officer explained that a cut had been built in when the rates were set.

“We did build in a cut in the Rates Support Grant but we certainly didn’t build in a budget for this level of cut,” he said. “We built in for a 3 or 4% cut as in previous years, we never thought it would be this magnitude of a cut. It does leave a shortfall of £528,114 in our budget for 2021/22.

“I had a third recommendation and that was to set aside £550,00 into the Covid Recovery Fund, which was the money we received in March 2021, to offset the shortfall in 2021/22.”

Addressing Mr Wright, Ballymoney DUP Councillor Alan McLean said: “I know last year we did set aside £1.5m and that was part of the Covid Recovery Fund because that was the sort of thing we thought could arise, were you taking that into account?”

Responding, the council officer said: “Yes, we do have the £1.5m set aside in the Covid Recovery Fund. My take on that would be that it was more aimed towards us incurring additional costs or suffering income losses as the pandemic continues, not as specific as this. 

“We have the opportunity here in the fact that we did get extra money in March which was over and above our budget for last year, and to me it seems prudent that we could hold that over to offset it against this shortfall and that leaves us the full £1.5m to cover any other losses we may incur going forward.”

Members voted unanimously to accept the three recommendations. Write to the Minister for Communities and Departmental officials; that officers would contact other affected councils to present a united front; and to set aside £550,000 in the Covid Recovery Fund to offset the shortfall for 2021/22.