By Donal McMahon
A Northern Ireland council is set to have the second highest savings (17.2%) of any council in the UK as a percentage of its net budget.
That is according to a new report by the BBC’s Shared Data Unit and viewed by the Local Democracy Service, which has gained 190 responses from 218 councils in the UK.
Newry, Mourne and Down District Council (NMDDC) is aiming to make savings of £11.6m in the 2023-24 year with a total net revenue budget of £67.4m.
A council spokesperson said: “In striking the (domestic) Rate (5.99%), Newry Mourne and Down District Council has sought to make savings in the financial year 2023-24 to minimise the impact on the ratepayer and the use of its reserves.
“We remain committed to ensuring this happens and the use of reserves in striking the Rate supports this sustainable path for long term financial stability.”
However, the local authority is currently in the middle of an ongoing employee dispute over wages with terms not yet agreed with the four workers’ unions involved.
Employee wages currently make up 50% of the council’s expenditure with any potential rise in pay being required to be absorbed in to this year’s agreed budget.
In a recent finance report to the NMDDC chamber, chief executive Maire Ward said: “Any increase in rates of pay can have a material impact on council finances.
“In setting the rate Rate 2023/24, pay assumptions have had to be made as the pay award for 2023/24 will not be known until later in the year and also balancing the impact on ratepayers.
“The outcome of any pay process will have been made to be managed in year, if the pay award exceeds the working assumptions made.”
Councils in Northern Ireland are set to use £14.5m worth of reserves in 2023-24, with NMDDC identifying £2.97m of its reserves to be spent, the highest spend of reserves in NI on the survey.
At the other end of the scale, Lisburn and Castlereagh City Council (LCCC) is at the bottom of the NI council savings list and is set to save 0% of its net budget.
In the Shared Data Unit’s Northern Ireland data, statistics were gathered from eight responding councils out of the total 11.
Though, four councils including Mid and East Antrim, Causeway Coast and Glens, Mid Ulster and Belfast City councils did not provide answers to a savings query.
Six out of the eight councils in the study plan to make savings in 2023-24. The combined savings are worth £25.2m.
Some of the savings will be found in the regional rate in Northern Ireland is set nationally and is expected to increase 6.67% for 2023-24.
Only Armagh City, Banbridge and Craigavon Borough Council (ABC) has predicted a two-year (2025-26) shortfall in its budget measured at £4.3m.
Financial Ruin
The compiled figures show that many UK local authorities are potentially facing financial ruin as deficits soar to 60% in two years.
Some UK councils will not be able to provide even basic services after a BBC study found a £5bn black hole in public finances, Unison has warned.
The BBC Shared Data Unit has found the average council now faces a £33m predicted deficit by 2025-26, a rise of 60% from £20m two years ago.
Together, the 190 authorities surveyed said they would need to find £5.2bn to balance the books by April 2026, even after making £2.5bn of cuts this year.
Local authorities in other parts of the UK are responsible for providing more services than in Northern Ireland including social care, hospitals, roads and education with greater budgets from the Westminster government.
Many of these extra responsibilities are undertaken by the Stormont Assembly in NI, when it is up and running.
Unison head of Local Government, Mike Short said it was time for council employees to be paid a fair wage.
He said: “Council finances are in the direst of states. This is not a sustainable situation.
“Council employees have had enough. Pay rises haven’t kept up with the cost of living. And staff want to take pride in their jobs and run good quality services for local residents. This is no longer possible. It’s no wonder so many are quitting for pastures new.
“As staff leave, there’s no money to replace them, which piles on the pressure for those remaining.”
The Local Government Association chair, Shaun Davies council cash reserves could be in danger of drying up.
He said: “Inflation, the National Living Wage, energy costs and ongoing increasing demand for services are all adding billions of extra costs onto councils just to keep services standing still.
“Councils hold reserves so they can plan for the future and deal with known risks. They can only be spent once and using reserves is not a solution to the long-term financial pressures that councils face.”
Northern Ireland Councils Savings £m
Antrim and Newtownabbey- No Response.
Ards & North Down -£3.8m (6%).
Armagh City, Banbridge and Craigavon -£2.63m (3.1%).
Belfast City- No Response.
Causeway Coast and Glens- No Response.
Derry City and Strabane -£3.55m (4.8%).
Fermanagh and Omagh -£0.3m (0.7%).
Lisburn and Castlereagh City -£0 (0%).
Mid & East Antrim -No Response.
Mid Ulster – £3.27m (6.1%).
Newry, Mourne and Down District -£11.6m (17.2%).
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