ENVIRONMENT COMMITTEE

BILLS

Local Government (Finance) Bill

Newtownabbey Borough Council

Response to the Environment Committee invitation
to comment on the Local Government (Finance) Bill

The Council welcomes the opportunity to comment on the above Bill and trusts that this response will be found helpful.

The Council would support the main aim of the Bill to modernise the current legislative framework relating to local government finance and councillors’ remuneration in Northern Ireland. The greater freedom proposed for Councils in managing their financial affairs, without prior consent of the Department, is welcomed and it is hoped that this is not constrained through excessive regulation.

Clauses 4(1) and 6(2) impose duties on the Chief Financial Officer to report on the robustness of the estimates and the adequacy of any proposed financial reserves. Clear guidance is needed on the factors the Department considers appropriate to determine robustness, since the process of setting budgets and financial balances relies heavily on estimation and the forecasting of key variables.

Clause 9(1). Other funds established under this power should not be prescribed as controlled reserves under clause 7. Guidance should be issued by the Department on the criteria for classification as a “controlled reserve” and examples of funds or reserves which would be unlikely to be controlled.

Clause 13. The regulations need to allow councils to borrow to finance any unfunded capital balances which are extant at the commencement of the regulations.

Clause 23. The power to invest is granted to councils, however restrictions on the types of assets to be invested in are not mentioned.

Clause 35. The power to establish a panel to advise on payments by councils to Councillors is welcomed.

June 2010