Around £175 million of rates went unpaid by households and businesses in the north during last financial year, the Department of Finance has said.
With Stormont’s limited revenue raising powers under the spotlight like never before, it has been confirmed that rating debt in Northern Ireland increased by £21m to £174.3m as of March 31 2023.
It meant around 10% of rates in Northern Ireland went unpaid in the 2022/23 financial year.
The UK government has asked Stormont’s ministers to raise a minimum of £113m over the next 12 months as a condition of a £3.3 billion packaging of funding linked to the restoration of the executive.
The Treasury has also made the write-off of a £559m debt, accumulated by Stormont’s departments overspending, conditional on the publication and implementation of a sustainability plan by May 2024.
In September 2023, the Secretary of State Chris Heaton-Harris directed Stormont’s most senior civil servants to begin consultations on measures to increase revenue, including the introduction of water rates, increasing tuition fees and the introduction of prescription charges.
First Minister Michelle O’Neill has already ruled out introducing water charges, while Economy Minister Conor Murphy has poured cold water on the prospect of raising tuition fees.
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It leaves property rates as one of the few levers Stormont has left to generate its own funds.
Some £1.36 billion of rates was collected in Northern Ireland during the 2022/23 financial year.
That was £189m more than in 2021/22 and £302m more than 2020/21.
Rates bills are calculated by combining the regional rate and the rate set by councils, and multiplying it with the rateable value of a home or business.
All 11 councils have already announced rates hikes for both households and businesses in the 2024/25 financial year, which commences in April.
Stormont’s Finance Minister Caoimhe Archibald has yet to announce the new regional rate, although Michelle O’Neill has ruled out a 15% increase.
But rather than significantly increase the regional rate, could more be done to collect rates that are already owed?
The Department of Finance (DoF) said the Covid-19 pandemic had a significant impact on its ability to pursue unpaid rates.
A DoF spokesperson said: “The impact of the Covid-19 pandemic on the annual rates billing and collection cycle, a pause in legal proceedings as courts were restricted for an extended period and the cost of living/doing business crisis have all impacted on rating debt.
“Ratepayers facing financial challenges are encouraged to contact them and seek advice on payment options that can include agreeing a payment arrangement. Where necessary LPS will resort to legal recovery processes to collect unpaid rates.”
DoF said the £174m figure includes ratepayers who are paying off their debt through agreed payment arrangements and rates that cannot be legally collected due to ongoing insolvency proceedings.
Meanwhile the department said almost 1,400 responses were received as part of the consultation on rating measures, which closed on February 13.
“The Finance Minister will be assessing the findings of the consultation, alongside a number of other strategic areas within the rating system,” added a DoF spokesperson.
