THE COST and non-financial benefits of merging the north's councils in 2015 is to be examined for the first time.
The Department of Communities' confirmation that it is to carry out the review comes after the local government financial watchdog recently found councils are spending beyond their means and getting further into debt.
Billed as 'the biggest shake-up in local government for a generation', one of the key arguments for reducing the number of councils in the north from 26 to 11 was to cut costs.
However, the most recent report from Local Government Auditor Pamela McCreedy, which covers the pre-Covid 2018-19 period, shows that since the number of councils was reduced their expenditure has exceeded income every single year.
The report highlights how the shortfall between income and outgoings has "notably increased in the past two years", leaving a deficit of £106m in 2018-19.
Ms McCreedy notes that "this may not be sustainable in the longer term" and that the situation is likely to be exacerbated by the coronavirus epidemic.
The watchdog's report also noted that many councils continue to carry a significant debt burden, with increased borrowing sending the total owed by 11 councils to more than £0.5bn.
The councils' pension liability also increased by 10 per cent in 2018-19 to £0.55bn , the auditor's report showed, with the average pension contribution rate standing at 19 per cent of employees’ gross salary.
Ms McCreedy told The Irish News she was "disappointed" a cost-benefit analysis had yet to be completed, as it was important to evaluate local government reform in order to "learn lessons".
"There have been many qualitative benefits – you can see those on the ground – but some of the harder questions about the financial aspects aren't clear," she said.
The local government auditor said that while Covid-19 may have delayed the review, the sooner it took place the better.
"If there isn't a conclusion to the review soon there will be more and more questions about it, and they will get more challenging to answer," she said.
A Department for Communities spokesperson said it had commenced a review covering the period from 2015–2019.
The spokesperson said the review would focus on "non-monetary and monetary factors" and that its terms of reference had been agreed with Solace NI, the council chief executive's representative body. It is expected to be completed some time in the next 18 months.
Ulster Unionist communities spokesman Andy Allen welcomed news of the review but said "it should have happened a long time ago".
"The results of the review should be published as soon as possible rather than being served up as a vague date in 2021/22," he said.
"Sinn Féin and the DUP lauded the financial savings that would be made due to their version of local government reform but so far the detail has been very light on the ground to back up their claims and if anything the opposite may be true – if savings have been made without impacting upon service delivery, then tell us about them as soon as possible."
