Borrowing will not mean big rates hike

Borrowing will not mean big rates hike

23 May 2012 - by David Telford

DOWN Council has no plans to drive up massive rates increases to finance its ambitious capital development programme, it’s chief executive has made clear.

John Dumigan was responding to news that the council has set a borrowing limit of £56m to finance a series of major projects across the district over the coming years.

The chief executive said when it comes to financing capital schemes, the council will not be adopting a cavalier attitude and asking ratepayers to foot the entire bill. He said he is acutely aware of the hardships home and business owners across the district are experiencing.

Mr. Dumigan described the figure of £56m as the projected cost of an “aspirational programme” to develop facilities across the district. But he insists no additional financial burden will be placed on ratepayers to deliver capital schemes.

He continued: “Like every other business, we have to borrow the money to do the things that we want to do. We have set a borrowing limit to ensure we don’t go above that, given the implications for making repayments and the increased burden this would place on ratepayers.

“What we want to do is develop and improve the facilities in the district and give people what they have asked for. The money to repay capital loans has to be found from within the council’s existing running costs.

“This is crucial. We are not going to do anything at all unless the money can be found within our existing running costs.”

Mr. Dumigan said running costs across the organisation have already been reduced and revealed work is continuing to create further efficiencies so the savings can be used to finance loans for schemes aimed at improving the district. He said if money can’t be found to finance loans “nothing will happen.”

The chief executive said over the past two years the council has reduced its running costs by over £2m, with this money used to finance loans for key projects, including the new £11m administration centre at the Downshire Hospital site.

“Loans for this and other projects are being financed via savings the organisation has already made by reducing its running costs,” Mr. Dumigan continued.

Mr. Dumigan said while Down Council aspires to build a long list of facilities for people, it knows that it can’t afford them all.

“The list is aspirational and there will be some hard choices about projects that are developed. Projects will only go ahead on the basis of a very sound and robust business case with everything stacking up. Projects must be affordable and what people want. They will be funded through savings, efficiencies, external funding or grants.

“It has been suggested Down Council is trying to create a legacy through its capital development programme before it merges with Newry and Mourne, but many projects we would like to develop simply won’t go ahead in the life of the current council. It could take up to 10 years to develop them all.”

He added: “We don’t want to see our citizens disadvantaged. Down Council wants to be proactive in providing modern facilities for its people. The challenge is to do this by making it affordable and not driving up massive rate increases.

“We need to live within our means and deliver projects for people at the right price, not lumbering householders and businesses with massive rate increases.”