Item 7 Appendix 1 DSD Ministerial Delegation Briefing paper, item 7

Derry City and Strabane District Council’s delegation to meet the Minister for Social
Development, Nelson McCausland on Tuesday 02 September 2014 at 2.30pm in
Conference Room 1, County Hall, Coleraine.
DRAFT BRIEFING PAPER – issued in confidence and without prejudice
Presiding Councillor – Councillor Maolíosa McHugh
Councillor Hilary McClintock
Councillor Patsy Kelly
Councillor Derek Hussey
Councillor Elisha McCallion
Councillor Paul Gallagher
Chief Executive of Derry City and Strabane District Council Mr John Kelpie
Opening and Welcome - Councillor Maolíosa McHugh
The Presiding Councillor is invited to open the meeting, thank the Minister for
agreeing to meet with the delegation and to introduce those present.
The broad objectives of the delegation are as follows:
To update the Minister on the progress within Derry City and Strabane
District Council to transfer the important powers of urban regeneration and
community development
To provide the Minister with an evidence-base to firmly justify our concern in
relation to the budget transferring
To lobby the Minister for further resources and supports to assist Derry City
and Strabane District Council to effectively address the social, economic and
physical needs of its district from 01 April 2015.
Brief context
The new Derry City and Strabane District Council will be home to 147,700 residents,
and 8.2% of the Northern Ireland population. It will uniquely combine a regional city
with a large urban population with a large and widely dispersed rural area.
Of those residents –
23% have a long term health problem or disability (compared to a NI
average of 20.69%)
40% were recorded as economically inactive (in the March 2011 Census
figures) (10% above the NI average)
46% have no or low qualifications
The Derry City and Strabane District Council area is the highest ranking District
Council in terms of the percentage of working age population who are
employment deprived and income deprived.
The area suffers from a significantly high degree of deprivation, social exclusion,
poverty and health inequalities compared to the other District Councils in Northern
Whilst these statistics may be shocking, the Derry City and Strabane District Council
area has a lot to celebrate. Over recent years both Councils, in partnership with the
North West Development office and other statutory and private partners has:
embarked on an ambitious work programme to regenerate and revitalise
the city and region:
successfully hosted the inaugural UK City of Culture in 2013.
sustained ongoing capital investment in the city and town centre public
sustained investment in City of Derry Airport
created as NI’s first Urban Regeneration Company - Ilex
Ensured that the City’s ‘One Plan’ was adopted in the Programme for
Government as the main policy driver for regeneration
Designated Derry-Londonderry and Tyrone and the Sperrins as a NI
Signature Tourism Destinations
As a result of these sustained initiatives:
The DETI economic briefing in August 2014 outlined that the economically
inactive figure has reduced to 30% (albeit this is still 3% above the NI
figure of 27.6%)
The City and region are firmly on the international map as a key cultural
and visitor destination.
There is a clear sense of positivity, ambition and a new vibrancy inherent
within the City and region
There is a critical need to sustain this degree of regeneration and to build on this
positive legacy.
We are proud of our past and very ambitious for our future.
Update on progress to date
Derry City and Strabane District Council has a pro-active and engaging partnership
with the North West Development Office. The Council has been working very
actively with DSD officials to prepare for transferring the important powers of
Community Development and Regeneration on vesting day.
The following examples of collaboration and co-operation are cited for reference:
A DSD Transfer Workshop was held with Members of the Statutory
Transition Committee on the 12 February 2014. This event outlined to
Members the high-level strategic issues facing the new Council.
The DSD Change Manager presented to the April Statutory Transition
Committee on these strategic issues. Members put a number of
recommendations to the Shadow Council in this regard.
The Director of the North West Development Office also presented to the
new Council’s first Services Transformation Committee of Derry City and
Strabane District Council in July
The Director of the North West Development Office and the DSD Change
Manager are Members of the Transition Management Team and attend
monthly meetings.
The Chief Executive also co-chairs a DSD Transfer Working Group in
partnership with the Director of the North West Development Office. This
working group also meets monthly.
The DSD Change Manager is represented on our capacity building
working group and DSD staff have been invited to attend our capacity
building training organised to date.
The NWDO are actively engaging and co-operating with our Lead Financial
Officer and assisting him in developing a broad financial forecast of the
costs associated with the transfer of powers from DSD in preparations for
the rates estimates process in 2015.
Exchange visits have also been organised for DSD staff to both Derry City
Council and Strabane District Council.
Outcomes to date:
The new Council has been fully briefed on the range of issues facing it in terms of the
transfer of DSD powers to the new Council.
The DSD Neighbourhood Renewal funding (including Voluntary Community Unit and
Community Investment Fund) for 2014/15 currently amounts to £5.694m and funds
176 jobs within the Derry City and Strabane District Council area.
The Council has agreed to commence a process of evaluation and appraisal of
current Neighbourhood Renewal Projects – the outcome of which will be reported to
a future Services Transformation Committee.
Detailed due diligence work is being carried out to scope the costs (maintenance,
cleansing, public liability and replacement) of the land assets that will be transferring
to the new Council.
Members received updates on the progress of the DSD Capital programme locally.
The Council has concerns in relation to potential over-run costs and has written to
the Minister to seek the delay the transfer of the Fort George Site until the
mitigation works are completed.
Concerns have been expressed by the STC and the Shadow Council in relation to the
inadequacy of the proposed resources to be allocated to the new Council in 2015.
Evidence base on the inadequacy of DSD resources transferring
DSD have proposed that the Derry City and Strabane District Council will receive
£7.149m to account for the delivery of powers of urban regeneration and
community development. An additional sum is also to be agreed to cover Finance,
ICT, accommodation and other support costs which will become real costs for the
new Council following the transfer of powers.
Revenue funding currently provided by the North West Development Office in
2014/15 accounts in full for the proposed allocation as follows:-
Revenue grants to the value of £6.444m covering Neighbourhood Renewal,
Community Investment Funding, Areas at Risk and SPOD’s and the
Community Support Programme (including advice services).This funding
covers 91 projects, 156 full time jobs and 20 part time jobs in addition to the
Community Support Programme;
A total of 22 assets will be transferring to the new Council. Pending
completion of the local due diligence exercise, a minimum of £300k per
annum will be required to maintain and insure these assets;
The staff costs associated with the allocation, administration and payment of
the above grants has been initially proposed by DSD North West
Development Office at £420k;
Of particular concern however is the fact that this resource allocation does not
account for any capital expenditure. DSD has invested an average of £3.7m in the
Derry City and Strabane area over the 5 years to 31st March 2014. In 2014/15,
anticipated capital spend by DSD in this area can be summarised as follows:£000
Neighbourhood Renewal (27 projects)
PDU (19 projects)
Revitalise (3 projects)
Urban Development Grant (5 projects)
Capital infrastructure projects (One Plan- 6 projects)
There is a risk that some of these projects will not be completed and spend achieved
by 31st March 2015 leaving the new Council with a potential liability of £5.14m.
The staffing costs associated with the allocation, administration and payment of
these capital grants consist of the One Plan Team and the Physical Development
Team and has been initially proposed by DSD North West Development Office at
In addition, 17 projects of vital significance to the region (including Fort George
remediation works, Foyle Valley Masterplan and Strabane Town Centre Public Realm
works) to the value £21.688m are to be considered by the new Council for progress
after April 2015.
Evidence from this local due diligence shows that:
The £7.149m budget transferring is wholly inadequate.
This £7.149m resource categorically does not represent a rates neutral
The new Council will have minimal, if any, remaining resources
following the transfer to fund vital capital projects
Deprived communities will be negatively impacted
This legacy funding may hinder business continuity and leave Councils in
a development vacuum
Derry City and Strabane District Council strongly urge the Department to consider
this evidence base and increase the resource allocation to ensure a fit for purpose and
rates neutral transfer of regeneration and community development powers. The Council
argues that an inadequate resource allocation will negatively impact indicators of social
and economic need.
Commitment to Complete Capital Projects
A number of DSD capital projects are being transferred to local government which
are in various stages of completion. These projects are being transferred with a
further potential liability of £5.14m.
Many of these projects exist, or are in the pipeline in the Derry City Council area as
identified in the City’s One Plan which has been endorsed in the Programme for
Government. They are critical to the economic, social, environmental and physical
regeneration of the region.
DSD should continue to fund capital projects which over-run into the new Council,
particularly those projects where design work has already commenced and there is
a high public and private sector expectation that they will be delivered.
Requirement for an additional funding stream.
The Department of Social Development, in the administration of the powers of
urban regeneration and community development can access additional sources of
central government funding. It is recommended that the Department of Social
Development creates a similar support mechanism for Local Government in the
administration of these powers. This additional funding stream will facilitate Local
Government’s initiation of large scale regeneration projects, and support the sector
in addressing these critical affordability issues for future capital development.
Redefinition of regionally significant projects
Derry City and Strabane District Council also recommends that the Department
reconsider and refine the definition of ‘regionally significant’. A widening of this
definition will allow for further central government support and will ensure that
larger scale capital project planning and commencement is not hindered as a result
of Local Government Reform.
Summary comments
As a result of a legacy of underinvestment and deprivation, Derry City Council,
Strabane District Council and the North West Development Office alongside many
other statutory, private and community partners have embarked on an ambitious
regeneration programme in recent years.
The benefits of this regeneration programme are now being realised and there is a
need to sustain it to prevent any downward spiral.
Derry City and Strabane District Council is poised to effectively implement the
important powers of regeneration and community development. They will assist
local government to become stronger and more effective in addressing social need.
The Department of Social Development is strongly urged to properly resource this
transferring power to the Derry City and Strabane District Council area. The resource
allocation model is not rates neutral; DSD is transferring significant revenue
commitments and unfinished capital development programmes with limited funding.
This approach will have a negative, detrimental impact on social need and
disadvantaged communities.
DSD should commit to funding those capital projects which over-run into the new
Council – particularly those projects where design work or consultation has
A further funding stream should be provided by the Department to allow Councils to
initiate large scale regeneration projects.
The Department should reconsider the definition of regionally significant projects to
maximise resources at a local level.