Power station rates cut sparks crisis for council

LARNE Borough Council is faced with a totally unexpected quarter-of-a-million pounds shortfall in rates revenue this year.

Capital projects, including restoration of the market yard, are in jeopardy and services may need to be cut to keep the local authority within budget after AES at Ballylumford was granted a reduction in the sum it will have to pay the council. The power station’s rateable valuation is based on output rather than floor space and capacity was reduced due to a fault in one of the seven generators. The 160-megawatt unit in the newer gas turbine-powered plant was shut down in December. A company spokesman told the Larne Times it is hoped to have it back on stream by the end of next week.

“We have just finished a re-build and we are due to begin testing,” he explained on Monday.

The breakdown had no impact on electricity supply to consumers, but Council chief executive Geraldine McGahey has warned that the deficit could potentially have “very serious consequences” for the local authority, which depends on rates revenue of around £10m to fund its services and capital projects.

Recently, it was calculated that appointing a corporate affairs director and personal assistant would cost the council £100,000 a year and require a one per cent increase on the district rate. AES’s successful application to Land and Property Services for a reduction therefore is a very serious setback.

News of the reduction only emerged after the 2012-13 rate had been struck in February, resulting in a 4.5 per cent increase. Having already made efficiencies across departments in a bid to prevent adverse impact on services while keeping the rate increase to a minimum, the council now finds itself contemplating further cuts just to balance the books.

The reduction given to the power company is unprecedented and was a bolt from the blue for the Smiley Buildings administration, which this year will also have to fork out its share of expenses incurred by preparing for amalgamation with Ballymena and Carrickfergus under the rationalisation of public administration (RPA) and possibly a contribution to Arc 21’s multi-million pounds Energy From Waste facility. Neither item was included in the rates estimates.

Mrs McGahey revealed that the total loss of revenue from Ballylumford could exceed £250,000 and financial controller George Boyd and the council’s capital works team had been asked for an updated report on the status of each of the projects in the capital programme. The council is already committed to the £3m refurbishment of the McGarel town hall - due to be completed by the end of July - and hopes to embark on the long-awaited Glenarm masterplan and the equally cherished Gobbins path restoration scheme. Even with grants, the local authority’s contribution in each case is substantial.

The council cannot dip in to its contingency fund because that has already been used, Mrs McGahey told councillors.

Every department head has been asked to submit costing-saving proposals and a report is to be produced at this month’s policy and resources committee meeting.

Asked if it was too late to pull the plug on the £1.4m market yard scheme, Mrs McGahey described it as a listed building and an asset belonging to the people of the borough. The council had an obligation to ensure it was maintained.

The building was deteriorating “at an alarming rate” and required considerable investment, said the chief executive, who referred to six years of discussion between the council and Larne Regeneration Company and numerous attempts at seeking funding, which had finally been acquired.

It would be for the council to decide whether to proceed after receiving a tender report and final details on funding sources, but Mrs McGahey cautioned that careful consideration of all the issues would be required before any project was written off.