Homeowners face 23 per cent hike in rates under new Council

Sarah Saunderson • Published 18 Feb 2010 10:45 0 Comments

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A recent report commissioned by government on the new Councils refers to Fermanagh District Council as a "double loser" in its amalgamation with Omagh.

The PriceWaterhouseCoopers report, commissioned by the Department of the Environment, lays bare how Fermanagh's rate payers could lose out with the amalgamation of the two Councils set to take place next year.

Fermanagh could be a "district rate loser" and a "balance sheet loser" under the new arrangements.

Converging the district rates, Fermanagh ratepayers could face an increase of 23.18 per cent. This is the highest percentage increase of any Council in the whole of Northern Ireland. Conversely, Omagh's rates are predicted to go down by 18.28 per cent, which is the highest percentage drop among the Councils to be "winners" out of the new arrangements. The report suggests that with Council amalgamation, 12 Councils could see rates increases and 13 could see decreases.

"At present we understand that one potential option is to set an average rate across all ratepayers of the new Council which, with all other things being equal, will mean the residents of Fermanagh paying higher district rates and the residents of Omagh receiving a district rate cut," the report states.

The difference in debt owed by the two Councils will also have an effect. Fermanagh will move from a situation of being in the black to sliding into the red. "The rate payers of Fermanagh will move from a position of net cash per head of population of some £62 to a net debt of £56," the report says.

The amalgamation of legacy debt and convergence of district rate could create a situation of "double losers" on both these issues, the report notes. And as potentially the biggest loser of this convergence "unfairness", Fermanagh gets special mention in the report.

A solution suggested in the report would be to freeze Omagh's District Council rate, giving Fermanagh a three-year period to catch up. It may make the transition less painful, but it would not solve the issue.

Mr. Brendan Hegarty, Director of Finance and IT for Fermanagh District Council, commented: "The rate convergence is a matter of grave concern to Fermanagh District Council. We will be monitoring closely what proposals are brought forward by central government to deal with the problem".

This week, the full lists of rates struck by District Councils for the coming financial year was published. This shows the difference between Fermanagh and Omagh's rates. Fermanagh's domestic rate is 0.2448 and Omagh's is 0.3659.

Fermanagh's domestic rate is third from the bottom of the league table out of 26 district Councils and its non-domestic rate is second lowest in the league. Omagh District Council's domestic rate is the fifth highest in the province while its non-domestic rate is 10 from the bottom.

In Fermanagh, a householder with a home valued at £120,000 would pay £726.72 in annual rates this coming year. An Omagh rate payer with a property of the same value would pay £145 more at £872.04, which is 20 per cent more.

And for a non-domestic rate payer with a property valued at £20,000, their annual rates will be £9,686 in Fermanagh. In Omagh, a business person in a property of the same value would attract a rates bill of £10,642. The difference is almost 10 per cent.

This coming year, Fermanagh's domestic rate will go up by 1.53 per cent. 40 per cent of our rates go to Fermanagh District Council and 60 per cent to central government services.

For non-domestic rate payers, such as businesses, the combined increase of regional and local rate will mean the total rate bill is expected to rise by 3.13 per cent. 36.6 per cent of the total non-domestic rates paid by Fermanagh businesses will go to local Council and the remainder to central government services.

Rates bills are dictated by the district rate -- set by the Council and the regional rate -- set by the government. This regional rate is set to be frozen for a third year in a row.

Environment Minister, Mr Edwin Poots, commented: "The Northern Ireland Executive is responsible for deciding on the level of the regional rate, which accounts for just over half a typical rates bill. The freeze for the last two years, and this coming year, represents an effective cut in the regional rate contribution made by domestic ratepayers when inflation is taken into account. For business ratepayers the regional rate contribution is held broadly in line with inflation at 2.7 per cent. This financial restraint by the Executive recognises the importance for households and businesses to minimise any financial pressure they are facing, particularly during this challenging period for our economy".

This article appeared in Impartial Reporter 18 Feb 10

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