ENVIRONMENT COMMITTEE

BILLS

Local Government (Finance) Bill

Omagh District Council Submission to Committee Consultation

18/06/2010

Omagh DC welcomes the proposal to introduce a New Local Government (Finance) Bill and the opportunity to modernise the current legislative framework relating to local government finance and Councillors’ remuneration in Northern Ireland.

The proposed legislation, especially in relation to the capital finance system, aims to give greater freedom to Northern Ireland Local Authorities and the council would urge that this greater freedom is not constrained through the use of regulations.

Clause 7 makes provision for reserves specified in regulations under clause 6(1) to be designated controlled reserves, with a required minimum balance at the end of the financial year. The chief financial officer must report to the council on the reasons for a controlled reserve not achieving the minimum level, and any action considered necessary to prevent a recurrence in the following year.

In support of the ALFGO position Omagh DC would advocate that in the spirit of financial freedom no reserves should be designated controlled reserves.

Clause 22 enables the Department to make regulations about the use of capital receipts.

In support of the ALFGO position Omagh DC would acknowledge the greater flexibility in the bill for the use of capital receipts and would welcome the removal of the requirement for capital receipts to be applied in the first instance against any money borrowed by the Council for the purposes of acquiring that asset, as sometimes this could result in significant financial penalties for early redemption.

Clause 27 makes provision for the Department to make a rates support grant to district councils for each financial year.

It is important that the rates support grant continues to be adequately resourced given that only the councils deemed to be in greatest need currently receive this grant.

Clause 34 gives the Department power to make regulations for the establishment of an independent panel to advise the Department on payments to Councillors.

In support of the ALFGO position Omagh DC welcomes the establishment of an independent panel to advise the Department on payments to Councillors to bring Northern Ireland into line with the rest of the United Kingdom, where independent panels already exist to consider the level and system of Councillors’ allowances.

Clause 36 allows a district council to make payments for any purpose which in its opinion are in the interests of, and will bring direct benefit to, the council, its district or any part of its district, or the inhabitants of the district.

Omagh DC request that consideration be given in the interim to the need to review the current limits on expenditure for special purposes.