Council Issues Budget Statement
Significant increases in inflation, energy costs and fuel prices are placing unprecedented pressure on council budgets in Ards
and North Down.
These factors are being further compounded by interest rate rises, public sector pay rises and uncertainty around future government funding due to the NI Executive’s budget deficit.
Elected Members have been advised of how these factors are making financial planning exceptionally difficult for the 2023/24 year. They have challenged officers to identify savings of more than £4M in next year’s budget to help offset some of the substantial rate rise that will be required for the Council to remain financially stable.
It is recognised that the position could worsen if further pressures arise.
Commenting on the situation Simon Christie, Director of Finance and Performance, said: "When our budget for the current financial year was approved in February, we were concerned about managing the ongoing impact of the pandemic. This issue has now been eclipsed by the impact of extremely high and rapid inflation, energy costs and wages, all of which are already significantly above our current budgets. This is further exacerbated by continued upward pressure on waste collection and disposal costs.
Simon added: "We have worked hard to introduce efficiencies and build financial resilience and so to strengthen our financial position as a council, but without additional government funding we will have to make some very difficult decisions. We must plan for the worst while doing everything we can to get more support from government."
The Northern Ireland Local Government Association has written to the Secretary of State to outline the challenges facing the sector and to call for additional resources for NI councils, so they can continue to deliver critical services to local communities. Measures were introduced for England, as part of the Chancellor’s Autumn Statement, that will assist with reducing business rates. As a sector, we continue to lobby for similar and other support measures to be introduced here.
The Council is currently scrutinising all options to drive expenditure down. This includes approving only essential recruitment, reviewing service provision and operations, opening hours of all facilities, energy-saving initiatives, deferring expenditure where possible and reviewing capital projects. With inflation continuing to run at over 10%, increasing fees and charges for the use of some leisure and community facilities will also be examined.
Due to the speed at which the cost-of-living crisis has arisen, the Council is having to significantly deplete its reserves in this financial year to manage the current financial deficit. This is unsustainable beyond the current year, meaning a significant rate rise is inevitable in 2023-24.
Mayor of Ards and North Down, Councillor Karen Douglas said: “We know that households across Northern Ireland are facing huge financial challenges this winter. Rising prices make this a cost-of-living catastrophe for many residents and businesses. With a large proportion of Council budgets spent on pay, energy and waste, we are facing multimillion-pound impacts. Cost increases are likely to exceed £9-10M per annum. We do not want to put further pressure on residents with a substantial rate increase so we will do everything possible to try and offset the cost pressures we are facing by delivering significant savings.
“We are committed to continuing to deliver for our communities but, as the cost of doing this rises and our funding fails to keep pace, we do face tough choices with potential service impacts in the 2023/24 year. We hope that the public will be understanding of the need to make changes for a year to navigate the current pressures.”
The situation is not unique to Ards and North Down. The Local Government Association has warned that NI councils are facing a collective funding gap of £90M in the current financial year just to maintain services at pre-COVID levels. This gap will worsen going into 2023/24.
Please note: rates bills in Northern Ireland are made up of two parts; the regional rate, which is set by central government, and the district rate that is fixed annually by individual councils. The likely percentage rise in the regional rate is as yet unknown.