The deficit between the income generated by the north’s councils’ and the amount they spend has reached record levels, a watchdog’s report reveals.
Local government auditor Colette Kane today highlights a collective shortfall of £128m and warns that if the trend continues it could “potentially challenge the long-term financial sustainability of the overall local government sector”.
The auditor’s report also reveals soaring levels of absenteeism, with an average of almost 17 days lost each year due to sickness across 11 councils.
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Newry, Mourne and Down Council has the highest absenteeism rate at an average of 23.3 days – almost double that of the civil service.
The lowest rates of absence are in Fermanagh and Omagh Council, where an average of 11.9 days are lost to sickness each year.
Shining a light on the long-term financial resilience of a number of councils, the audit for 2022-23 shows income generated by charges and service fees fell by 8.5% year-on-year.
This factor coupled with rising inflation and a reduction in grants from central government means overall there is a 15% gap between the councils’ income and expenditure.
Ms Kane suggests councils may have to consider the “scope for increasing income generation”.
Notably, her report also shows that the value of the 11 councils’ usable reserves has increased to £447m.
“It is essential that councils have clear and robust plans in place for managing and using these reserves in a way that delivers maximum value and benefit for ratepayers,” the local government auditor says.
All councils have reduced their long-term debt, the report finds, though there is a wide disparity between the highest and lowest borrowers.
Fermanagh and Omagh Council has the lowest level of debt at £3.9m, while Ards and North Down owes £63.7m, despite having paid off almost £10m over the previous two years.
Elsewhere, Ms Kane highlights how 40% of councils’ operational expenditure – some £436m – is spent on staff costs.
Two councils – Mid and East Antrim and Causeway Coast & Glens – spend more than one-fifth of their staff costs on agency workers.
Causeway Coast & Glens’ spending on agency workers has risen to its highest ever level and now represents 29% of all staff costs.
Summarising her findings, Ms Kane said the gap between decreasing levels of income and rising expenditure was being experienced across most councils.
“I am concerned that any sustained continuation of this trend could potentially challenge the long-term financial sustainability of the overall local government sector,” she said.
“Financial resilience, through effective planning and strong oversight, will be crucial in the period ahead, and my report makes several recommendations in this regard.”
