Politics

Analysis: Rates rise in real terms but services deteriorate

Householders and businesses face a higher than inflation increase in their rates' bills

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Increases in the district rate have been compounded by an inflation-plus rise in the regional rate (Joe Giddens/PA)

Another year, another above inflation rates rise. This time around, much blame is being laid at the feet of the Labour government in London.

The increase in employers' national insurance contributions has been cited by many councils as the main driver of the inflation-plus increases in the district rate, which vary between 6% in Belfast and 3.65% in Ards and North Down.

It has now been confirmed that the executive has agreed a rise in the regional domestic rate of 5% and to increase its non-domestic counterpart by 3%.

The regional rate increase is roughly comparable to last year, which was 4% for both households and businesses.

The rises in the district rate across 11 councils are also more modest than a year ago but then the rate of inflation was much higher.

Yet the direction of travel is clear: the tax on your home and your business premises is increasing in real terms ever year.

Chancellor of the Exchequer Rachel Reeves appearing before the Treasury Select Committee (House of Commons/UK Parliament)
The Treasury has pledged additional funds to cover the increased cost of employers' national insurance contributions

However, it’s highly questionable whether there’s a commensurate improvement in the delivery of public services, both by Stormont and local councils.

In terms of latter, what we are primarily paying for is the wages of 11 bureaucratic behemoths built around the provision of leisure services and a weekly bin collection.



Some 60% of each district council’s outlay is on wages, with many chief executives taking home in excess of £100K.

Meanwhile, centrally controlled services such as health, transport and education are at breaking point.

The UK Treasury has said funding will be made available, as it will be in England, to help cover the increased cost of in employers' national insurance contributions.

However, it has not said how much will come as a result of Barnett consequentials, while Stormont’s Department of Finance has so far failed to indicate how much it needs, or whether the money from Treasury will be passed on to councils.

There appears to be a reluctance on the part of all politicians – at local level, at Stormont, and at Westminster – to be upfront with people.

While there are individual outliers, all the main parties are culpable in squeezing more and more from people while delivering less and less.

Sooner or later, something has to give.