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NI councils' cash crisis: 30% rates hike and staff layoffs considered as reserves dwindle during coronavirus pandemic

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All 11 of Northern Ireland's council's are expected to furlough staff.

All 11 of Northern Ireland's council's are expected to furlough staff.

Photo by Kelvin Boyes / Press E

All 11 of Northern Ireland's council's are expected to furlough staff.

Northern Ireland councils are facing a financial crisis as the coronavirus pandemic causes widespread devastation to their incomes.

One council is considering a 30% rate hike and some local authorities could run out of cash within months, MLAs have heard.

The BBC is also reporting that Antrim and Newtownabbey Borough Council is to consider a plan on Thursday evening to furlough more than half its 670 workforce.

It's estimated councils are losing around £10.5million a month.

The Assembly's Committee for Communities was told on Wednesday councils had lost 75% of their income and some could face insolvency by August without an “immediate cash injection”.

SOLACE – the body of NI’s council chief executives – want the same support as local governments elsewhere in the UK.

David Jackson, chief executive of Causeway and Glens Borough Council, said: “A number of councils will run out of cash to pay staff and suppliers within the next couple of months.

“One council mentioned the potential for a 30% rate increase, some councils have 300 staff furloughed.”

He added “significant” redundancies could follow if the sector isn’t given the financial support it needs.

Asked how many staff had been furloughed, and whether their pay was being “topped up”, Belfast City Council chief executive Suzanne Wylie said they didn’t yet have a number.

But she said all 11 councils are expected to furlough some workers.

She added: “There’s a difference in opinion on topping up [making up the full salary] – I think the vast majority of councils will top up but that will depend on the council’s individual position.”

What we can’t have is the ordinary ratepayer having to bear the brunt of the financial impact. Sinead Ennis

Sinn Fein MLA Sinead Ennis said she was “broadly supportive” of the financial package proposed but had “some reservations about financial competency”.

She added: “I would like to see a wee bit more of a detailed breakdown in terms of individual councils’ financial standing.

“What we can’t have is the ordinary ratepayer having to bear the brunt of the financial impact of this pandemic.”

But SDLP’s Mark Durkan said people would “bear the brunt” if councils weren’t supported.

He added: “What happens if some of our councils go to the wall? What are the implications for jobs? It’s hard to believe citizens won’t bear the brunt.”

Communities Minister Deirdre Hargey has confirmed councils could apply to put non-essential workers on the Coronavirus Job Retention Scheme. That furloughs staff with the government paying 80% of their wages.

Mid Ulster District Council has confirmed it has furloughed 365 of its staff of its 1,092 workforce, including casual and seasonal staff.

In doing so, the council also confirmed it managed to offset April’s losses by around a third, from £620,000 to £200,200. It also said none of those furloughed staff "would suffer any financial detriment".

Speaking last week, the Chair of Mid Ulster District Council, Councillor Martin Kearney, said the move was prudent and in the interests of rate payers.

“Councils across the board have been dealing with mounting losses, particularly with the closure of our leisure and cultural facilities, and we anticipate even greater financial challenges in the future with the likely shrinking of our rates base.

“In implementing the scheme, the council is being financially prudent, demonstrating a commitment to minimising the impact of the pandemic on our ratepayers and helping to protect employment.

“Ultimately the scheme will benefit both the organisation and our residents.”

Belfast Telegraph