Belfast Telegraph

Friday 22 August 2014

Executive finally relents on funding of council mergers

The Stormont Executive has done a U-turn after finally agreeing to finance the massive shake-up in local government, the Belfast Telegraph can reveal.

Following months of wrangling, ministers have agreed to pay almost £50m towards the project – although it is not clear where the money will be found.

The deal includes £30m to help ensure the 11 new local authorities which are being merged from the present 26 won't have to increase rates to pay for the change.

For years ministers had insisted that none of the costs of the upheaval – due to come into effect in the next 15 months – would be met by Stormont and would have to come out of the councils' own coffers.

Now they have stumped up £47.8m which includes an estimated £4m to cover the interest on loans which the councils will then obtain effectively cost-free.

The total also includes £5.2m which is to cover some costs of the 11 councils when they are operating in 'shadow form' alongside the current 26 for a year following the elections, which are expected next May. First Minister Peter Robinson and deputy First Minister Martin McGuinness agreed the cash handout in a prolonged meeting with Environment Minister Alex Attwood.

Immediately afterwards, the proposals were put to the Executive which agreed to meet the "actual" costs.

A further £1m is for the appointment of 'change managers' who will be below the chief executive level, as well as around £600,000 for training and a further £500,000 for "winding up" costs.

The package does not include cash to finance a severance scheme for council workers expected to face redundancy.

Mr Attwood had repeatedly bid for around £38m in the most recent quarterly spending rounds, but had been spurned three times.

It is understood the bids at that point did not include money for the 'rates convergence' which has now been subsumed into the agreement.

Letters being sent out to council chiefs today will also emphasise they must play their part in finding more money.

As the Belfast Telegraph revealed, the crunch meeting was also attended by Finance Minister Sammy Wilson, who has also agreed to look at whether further funds can be found in future quarterly monitoring rounds.

Mr Attwood said he was satisfied that councils would receive the necessary funding "because the project would have proved impossible without it".

He added: "Now it is up to everyone involved to come together and continue the work to make this thing happen."

Mr Attwood's department will still have to find just over £20m to pay for 11 transition committees.

Background

The 11 new Northern Ireland councils will be:

  • Belfast
  • Antrim/Newtownabbey
  • Armagh/Banbridge and Craigavon
  • Causeway Coast and Glens
  • Derry/Strabane
  • Fermanagh/Omagh
  • Lisburn/Castlereagh
  • Mid/East Antrim
  • Mid Ulster
  • Newry/Mourne and Down
  • North Down/Ards

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