Belfast Telegraph

Monday 1 September 2014

Loans lifeline could see town hall reforms

A stand-off between Stormont and councils over who should pay for a shake-up of local government — which will see the 26 authorities merged into 11 — could be helped with loans.

The councils have asked Environment Minister Edwin Poots, who wants them to find the full £118m needed for the changes, to clarify if loans sanctioned by Finance Minister Sammy Wilson could be made available to help them meet the cost of the reform.

It follows an unprecendented meeting of the Northern Local Government Association (NILGA) on Friday which effectively threw the core question of who picks up the tab back into the DUP minister’s court.

A letter sent to Mr Poots after the meeting claimed the minister had said Mr Wilson suggested the possibility of extending capital loans to cover costs of the project.

“We would welcome further clarity and discussion on this and any other possible options,” the letter from NILGA president John Mathews said. “It is unfortunate there was no opportunity for more detail in your letter about possible funding mechanisms available to local government.”

The letter warned it had not proved possible to achieve the formal ratification of all councils in the week-long deadline imposed by Mr Poots and individual councils “cannot and will not” sign up for specific savings.

It added that without agreement on boundaries for the new councils “the reform process cannot go forward”.

“It is the Executive’s responsibility to make the decision on the future of the reform programme for local government. We therefore call on you and your Executive colleagues to take these decisions quickly and to provide now the necessary clarity.”

Mr Poots said loans were an option: “Councils can currently apply for a Government loan from the National Loan Fund administered by HM Treasury providing it meets existing criteria,” he said.

“It will also be possible for councils to borrow from commercial sources. It would be for local government to determine the best source of funding to deliver local government reform.”

He added he will discuss the letter with Executive colleagues.

He has told councils that with the Executive facing cuts over the next five years of around £1bn — a figure disputed by some of his Executive colleagues — it is not in a position to fund the reform.

But even if agreement is reached, ministers must decide if it is too late to merge the councils in time for next May’s elections, already delayed by a year.

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