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Inherited Council Indebtedness

Environment – in the Northern Ireland Assembly at 3:00 pm on 26th January 2009.

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Photo of Mervyn Storey Mervyn Storey DUP 3:00 pm, 26th January 2009

3. asked the Minister of the Environment what actions will be taken to deal with levels of inherited council indebtedness after 2011.         (AQO 1882/09)

Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

Matters relating to local government finance are being addressed by policy development panel C, which reports regularly to the strategic leadership board. It is recognised that council indebtedness is one of the more significant issues and that it will require careful examination. When options have been further developed by the panel, recommendations will be presented to the strategic leadership board for consideration.

Photo of Mervyn Storey Mervyn Storey DUP

I thank the Minister for his answer. Will he outline the actions that his Department would take if a dispute in relation to borrowing were to emerge among councils in the new district council areas?

Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

The Department has already tried to anticipate that, and it has already issued guidelines to councils to try to ensure that they do not take on any unnecessary new borrowing before the new councils are set up. The finance Bill, which will, I hope, come before the Assembly in the spring of 2009 will lay down further restrictions. For example, any new borrowing by councils will have to be agreed by the transition committees of the councils that are to amalgamate. Disputes will arise. However, if the arrangements for the new councils are to work, it is important that transition committees work together and see themselves not as separate councils for the future, but as new corporate entities.

Disputes that cannot be resolved can be referred to me for resolution. I say that with great reluctance, because I hope that I will not have to do that. If that were to happen too frequently, the new councils would face a bleak future.

Photo of Cathal Boylan Cathal Boylan Sinn Féin

Go raibh maith agat, a Cheann Comhairle. I thank the Minister for his answer. Has he spoken to his Executive colleagues to ensure that enough resources are available to implement the functions that are to be transferred to the councils? Would he support the Minister for Regional Development if he were to seek additional funding to bring the rural roads network up to standard?

Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I expend enough effort trying to get money for my own Department’s functions without having to lobby for others. I am sure that the Minister for Regional Development is perfectly capable of lobbying for his own funds; I will lobby for my own Department.

As for resources for setting up the new councils, I know that councils, councillors and council officials will need to do extra work in the transition period. Therefore, £150,000 will be made available each year to each council to set up transition committees, staff them and make the necessary arrangements. Additional funding bids will be made to the Department of Finance and Personnel for the extra moneys that will be needed for the amalgamation of councils and for setting up new ones. Whether they will be successful will depend on whether we make a strong enough business case for extra money for the rationalisation.

Photo of David McNarry David McNarry UUP

I return to the question of indebtedness. Does the Minister accept that there has been a failure to regulate local government debt effectively? By how much has local government debt increased since 2007?

Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

The debt incurred by local government amounts to £376·6 million. Since 2007, there has been no huge increase. I do not have the figure to hand; I am not a walking encyclopaedia. I will write to the Member with that information. However, I understand that the increase is marginal. This year, £30 million of local government debt will be repaid.

We must closely monitor the issue of local government debt. It would be unfair for councils that have been prudent to find their ratepayers burdened with debt from councils that have been on a spending binge. Through the guidelines that have been produced and the additional powers in the Finance Bill, we can stop councils from spending in a profligate way.