Derry has lowest disposable income in NI as businesses continue to close their doors across the city

Derry and Strabane Council has the lowest disposable income out of every Council region in the country.

Derry is also seventh from bottom in the entire UK, out of 179 Council areas, in terms of disposable income. 

As a result, people do not have a lot of money to spend locally and local businesses are taking the hit. 14 local businesses have already closed their doors within Derry between July and October with many more suspecting they will have to do the same.

This is as a result of rising costs and less income as the community feels the squeeze of the 'cost of living crisis.'

People in this council area do not have as much to spend as other parts of Northern Ireland. 

Speaking to Derry News, President of the Derry Chamber of Commerce, Aidan O'Kane, said this will lead to people tightening their purse strings even more during a difficult financial time, "In Derry and the North West, we are more precarious than any other part of Northern Ireland because we have the lowest disposable income of any other area," he said.

"This means the people here are going to be very cost sensitive to price rises and they'll choose maybe not to go out and eat in restaurants or choose not to go to pubs. Families and households will struggle.

"Economy is people, that's all it is. It's about people and what they spend. We expect people to spend more at Christmas but people may begin to really hoard their disposable income and not spend it and that is the cycle that feeds through. 

"People aren't spending their money on businesses and those businesses have to retract and scale back."

Local businesses have recently adopted "new tactics" to help them survive and deal with rising costs such as cutting back on opening days and hours which in return reduces staff costs and energy bills.

Mr O'Kane continued: "There are few very large global companies in Derry that will weather the storm with little or no difficulty but the majority of our council and the North West is small and medium enterprises, family businesses for example that are extremely price sensitive to a lot of things. 

"There are reports of businesses closing within the area on a monthly basis. We are seeing the takeaway industry particularly hard hit. 

"There are local takeaways that are closing their doors for the last time and there are takeaways that are functioning with new tactics such as less opening hours to keep their energy costs down and staff costs."

Mr O'Kane said that these tactics are only a temporary solution and will not sustain businesses in the long term. He said the Local Assembly must be reinstated to help local people and businesses. 

"The impact of not having a local government here is really compounding in this region," he continued. 

"There are local schemes and support that should be targeted to Derry and Strabane and that is not happening. Policies and schemes being devised at Westminster that may work for South East England but may not be what Derry and Strabane needs. 

"That is the tunnel we are facing at the moment because of a lack of Assembly. We are all free wheeling. We have predominantly small to medium sized businesses in our community so we are left in a worse situation than other urban areas such as Belfast. 

"It is going to be a difficult time for businesses. They may not be able to pay their staff what they normally would during busy periods. It is a vicious cycle. 

"That is why we need intervention. We don't have anything in place to stop the vicious cycle. Businesses are taking a hit and they can only take so much before they decide it isn't worth it. 

"Businesses aspirations at the moment are to breakeven. That is the aspirations you would expect of a non profit organisation or a charity but businesses need to be creating wealth and making a profit for everyone to prosper and it isn't about a business owner becoming wealthy. It is to bring the upwards spiral where there is more money flowing into the community and households. 

"That is how we bring about prosperity and prosperity brings a whole heap of benefits; stability, peace, optimism, and better mental health."

Mr O'Kane said a local Assembly could bring support schemes to businesses and loans that could bring businesses through this cost of living tunnel they are facing. 

Support from Stormont would lead to support for the local Council which in turn could provide local businesses support such as rates relief or rates holiday schemes.

Mr O'Kane explained: "This would make a substantial difference but the Council cannot deliver this themselves. 

"This can only be done with the intervention of a functioning Assembly- there needs to be central government intervention. Rates are the only income the Council receives. 

"Council needs to run and their services are vital to the community. There is full recognition that they are absolutely essential to communities and businesses. 

"We need the Assembly to help the local Council implement a rates holiday and the outcome of that would be substantial. Businesses now will face large rate bills and they have to pay them or they then face court."

This ultimatum is "battering businesses" into making a decision that they can't pay the rates so they close up and trying to carry on trading isn't worth it Mr O'Kane said.

"If you get enough businesses doing that, making those decisions, then Council doesn't get the rates from those businesses that aren't operating," he continued.

"Less businesses paying rates will have a detrimental effect on the income for the Council, it is again another vicious cycle.  

"That is where we need the local voice. That is what we are missing; we need our local government, we need the local voice of Stormont. We need them to speak up and ask for help and get local Councils the support to implement these rates holidays so that services can continue and businesses can survive for the next six months."

Mr O'Kane said that the business community is again filling that vacuum that is left by "substandard politics" here. 

"The politics here has been skewed to think that it is all about constitutional matters when day to day families, households and businesses are struggling. That is the North Star. That is what politicians need to be focusing on," he added.

"They need to be focused on bringing stability, security and prosperity to people. They have lost the run of themselves. There is resiliency built into the fabric of how people in Derry and Strabane work, that is the reality, we are very resilient; but there is only so much you can take. 

"I think it is a disgrace that there is such a disparity, even within Northern Ireland, that we are bottom of the heap in terms of disposable income than any other council area. 

"Our politicians aren't doing a good enough job in terms of tackling that for Derry and Strabane. Derry is the fourth largest city on this island and the second largest in Northern Ireland. It does not have the infrastructure or support that matches that. Local people and businesses need more."