Contested rate rise of almost 8% for Derry City and Strabane District

Ratepayers in the Derry City and Strabane District Council area are facing a district rate increase of almost eight percent for the incoming financial year.

The contested rise of 7.97% was struck at a special council meeting on Monday afternoon. The rise was supported by Sinn Féin, SDLP, UUP, DUP and Alliance councillors. It was opposed by Aontú, People Before Profit and the majority of Independent councillors. 

As a result an average rates bill in the Council area will  increase by £40.74 per annum or 78p per week. 

The regional rate, set by central government, will be determined by the end of March and will have an additional  impact on the overall rates bill.

In a statement to Derry Now, a spokesperson for Derry City and Strabane District Council said last year had seen “unprecedented financial challenges” for Council, residents and businesses. 

It added: “As Council services continue to recover to pre-pandemic levels, Council has had to absorb exceptional cost pressures of over £11m arising from current inflation levels of 10.5%, pressures associated with local and ongoing national pay negotiations, rates support grant cuts, construction inflation, as well as the normal statutory pressures and growth/ service development aspirations Council normally faces in order to continue to deliver the essential services and new investment our citizens require.

“Recognising these unprecedented pressures and the challenges faced by ratepayers, a Finance Working Group was established by Council last year to review all service budgets in detail and to identify efficiencies, savings opportunities and cutbacks. 

“Following months of detailed engagement, savings and service cutbacks of over £3.5m have been agreed which include staff efficiency savings/ voluntary severance; overhead efficiency savings; income generation including increase in off street car parking, building control and commercial refuse charges and sports development grant income; reductions in street cleansing and grounds maintenance services; alternate shared opening of rural recycling centres; reductions in external service level agreements and a small reduction to festivals programme budgets; reductions to other non-core programme budgets including business support, tourism, regeneration, museum programming, Christmas lighting, investment, marketing, arts and culture, health promotion and museum programming.

“As part of this rates process, Council has worked proactively to maintain funding to community organisations and arts and culture groups who are reliant on Council grant funding to deliver essential community services and projects, with the exception of some cutbacks to service level agreements to Visit Derry and the Millennium Forum.”

Before Monday’s meeting, Derry Now learned the proposal to axe £30,000 from the annual funding of Strabane’s Alley Theatre had been supported by some local councillors. However, the cut was voted down. 

Speaking to Derry Now, Strabane councillor, Paul Gallagher, expressed concern at the “disparity” in funding between Derry City and Strabane.

Referring back to the amalgamation of Derry City Council and Strabane District Council in 2015, Cllr Paul Gallagher (Independent) said Strabane had effectively taken on Derry’s debt.

Cllr Gallagher said: “Before the merger, Strabane District Council did very little, compared to Derry City Council. Derry City Council borrowed millions of pounds and built the Foyle Arena and carried out public realms schemes. Basically, Strabane went into the merger with very few facilities and took on the debt of Derry City Council. We are constantly paying that back. 

“We took on the airport, which is costing us approximately four million pounds per year. It was imposed on us. 

“A cursory glance at the local media over the last 10 years reveals Strabane has been promised a major public realm scheme, costing  seven million pounds, to do up the whole of Strabane Town, from Asda to the Head of the Town area. It is still sitting there. 

“We were promised the Riverine project, which is a town park. It has now been shelved as well. We were in our third round of successfully applying for funding, nine million euro. We were told time and time again it was happening, yet it has been shelved again,” said Cllr Gallagher.

Cllr Galagher said Strabane was also promised a new footbridge at the lower side of the town, which would connect the bus station and Strabane Town.

Currently, anyone getting a bus into Strabane has to get a taxi to get into the town.

Cllr Gallagher said: “We were promised a footbridge there. It has not been delivered. We have been promised a new leisure centre again and again and again.

“We applied to the Levelling Up fund recently but the project was not even looked at because ministers changed the criteria after we submitted our application. 

“Strabane just seems to get shafted time and time again and when they strike this rate today it will be no different. There will be a demonstrable imbalance between Strabane and Derry. 

“I will not be voting for the rate. I see this as implementing Tory policy. For Strabane people this is as bad if not worse than Margaret Thatcher’s infamous Poll Tax. People in Strabane are getting all of their services cut and they will be paying a Rate’s rise of twice as much as they paid last year. I will not be supporting that today,” said Cllr Gallagher. 

Cllr Emmet Doyle (Aontú) described the endorsement of  a rates rise double that of last year as a "betrayal of those living in a cost of living crisis".

He said: “Aontú stood by people today and voted against a rates rise that will push people and businesses further into crisis.

"A 7.97% rise in the middle of a cost of living crisis is unthinkable and despite all parties on Council supporting motions from Aontú in the last year to declare a cost of living emergency and even to establish warm banks, they have today turned their backs on that and added a further burden to ratepayers. It is a betrayal.

"Businesses with rent of £20k will see a rise of over £500 despite the obvious pressure many are under. I have visited homes over just the last few months where two adults have been working, some of them in our public sector and they are just surviving financially. We had a choice today in Council - take on the duplication of services and the neglect of Derry by Stormont or roll over and push the responsibility onto our own people - I am not prepared to do that.

"The parties that voted in favour of this today will be running spin for the next few weeks around how they ‘took responsibility’ and were acting in the interest of the district but the reality is they have added an extra worry onto ratepayers and they didn’t have to.

If as expected the Regional Rate is set well above 0% then ratepayers will be hit with another increase. People can now see who puts their money where their mouths are and who turns their backs when push comes to shove,” said Cllr Doyle.

Cllr Christopher Jackson (Sinn Féin) said Derry City and Strabane District Council was facing “significant financial pressures because of years of Tory austerity cuts”.

He also blamed Brexit, soaring energy costs and the cost-of-living crisis.

Cllr Jackson said: “This has been compounded by the DUP’s ongoing refusal to form an Executive which has left local councils unable to avail of the kind of rates support packages which we have benefited from in the past such as the £33 million in additional funding which Communities Minister Deirdre Hargey secured last year.

“The failure to form an Executive has left our public services, staff and amenities even more exposed to the impact of savage budget cuts imposed by the Tory government in London.

“Sinn Féin’s priority has been to maintain and deliver public services, to ensure fair pay settlements for council workers, protect jobs and ensure that work continues on crucial regeneration projects and attracting investment to this region.

“We worked to minimise the rates burden on households, while also protecting essential council services such as waste collection, sports, arts and leisure facilities, environmental projects and support for community and voluntary organisations who provide services for communities and improve the lives of all our citizens,” said Cllr Jackson.

Following the striking of Council rates, People Before Profit Cllrs Shaun Harkin and Maeve O'Neill said the five main parties had agreed to vote through a “brutal” rates hike and cuts to services and price hikes.

They said: “People Before Profit refused to back this betrayal of households and organisations we know are struggling while energy companies, banks and Tory corporate profiteers are posting record profits.

"Households and organisations across Derry and the District have been hammered with energy price hikes, rising food costs, mortgage hikes, pay cuts and more. We won't add to this burden. 

"The DUP attacked People Before Profit for shirking the responsibility of voting for this unacceptable hike and cuts. This is rich coming from a party that backs Tory austerity relentlessly and that's selfishly blocking Stormont from functioning. 

"We don't accept the Tory / DUP lie that there is no alternative to hikes and cuts. 

"Sinn Féin claimed that rates are up because Council workers got a pay rise. In our book, pitting workers against ratepayers is simply wrong. Workers aren't to blame for inflation and we don't accept Sinn Féin's contention that ratepayers will pay more because workers received a less than inflation pay rise.”

The PBP councillors said the SDLP had made a “huge deal about voting against a rates hike last year”.

They added: “This year, with the cost of living crisis even worse, they've voted for a rates increase that's more than double last year's, along with huge service cuts. This is the height of hypocrisy and the vote last year was clearly done on a cynical rather than principled basis. 

"Alliance and the UUP have demonstrated once again that they have nothing to offer but support for a rotten order that punishes ordinary people. Enough is enough needs to be more than a slogan. There is an alternative but it can only develop through resistance. 

"We see lots of people, healthcare workers, teachers, firefighters, Housing Executive workers, Council workers, at Radio Foyle, posties at Royal Mail and many others, refusing to accept the Tory lie that there is no alternative to cuts and price hikes. We are with this resistance. 

"The bottom line is that a lot more could have been done to avoid imposing this unfair rates hike on households and organisations that can't afford it."

SDLP Group Leader councillor Brian Tierney has said a failure to support local councils has resulted in further pressures for struggling families.  

Councillor Tierney said: “The last thing anyone wants to do is make life more difficult for struggling families at an already hard time, but the total abdication from government for any support for councils given the challenges our communities are facing has left us in a position where rates will be increased to keep important services like bin collections running.  

“We have made every effort to use council reserves and find money to resist this increase, but to ensure community services continue to function and front line staff are paid a fair wage there is little other option. Through our efforts we managed to secure a large reduction from the 19% increase initially proposed, but regret an increase of any kind was necessary.

“This situation has been compounded by Stormont and the British government’s failure to increase the Rates Support Grant and acknowledge the difficult situation that councils are facing. Tory austerity is negatively impacting every facet of life in the North and people here are suffering as a result.  

“We will keep working to hold Council to account and make sure that local people are getting value for money from their council. As the financial situation of the council improves we must also look at ways our funds can be used to improve the lives of everyone in this area. The SDLP is committed to supporting families during this current emergency and our councillors, MLAs and MPs will keep fighting on behalf of people here,” said Cllr Tierney.

For local businesses, the rates rise will vary depending on the outcome of the new Reval 2023 process for each ratepayer, which has seen average rateable property values in the Council area reduced by 2.75%. 

Derry City and Strabane District Council added: “As part of the rates process Council has made budgetary provision for £90m of community projects including the development of the Brandywell Sports Centre, the Daisyfield Pitches, Acorn Project and Derg Active Project in Castlederg supported by funding from UK Government Levelling Up Fund. 

“Provision has also been made for the development of new cemetery provision for the west bank of the city, continued development of greenway provision within the city and across the Council area, a number of rural revitalisation schemes in Newtownstewart, Castlederg, Sion Mills, Claudy, Eglinton and Park and continued investment in community facilities, pitches and play parks.

“In addition to this, Derry City and Strabane District Council continues to work towards the next stage of Government approval for the circa £250m transformative strategic and economic projects through City Deal and Inclusive Future Fund. As part of this Council is anticipating sign-off and commencement of the DNA project by early 2024 and is progressing business case development on a range of innovation, digital and health projects, the School of Medicine at Magee, and major regeneration projects in Strabane Town Centre and along the City Riverfront and Walled City.”

The Special Council meeting can be viewed back above.

To view the agenda and rates papers in full click HERE.

The regional rate, set by central government, will be determined by the end of March and will have an additional  impact on the overall rates bill.