MoD and BT rebate contributed to £867,765 rates deficit

The figure marks the deficit between the estimated penny product used to calculate the level of district rates in 2008/9 and the subsequent finalisation adjustment figures provided by Land and Property Services.

The figure also includes a sum of 173,419 owed to the MoD and British Telecom following successful rating valuation appeals in 2008/9.

A new report by the Northern Ireland Audit Office (NIAO) notes that Derry City Council will be allowed to defer the impact of these rebates over the remaining two years of its existence.

In the NIAO's Annual Audit Letter to the Council the Local Government Auditor Alfred Knox notes: "The 'final penny product' finalisation adjustment for the year amounted to a reduction of 867,765 and was notified and adjusted for by the Council prior to the completion of the accounts.

"It should be noted that when the estimates for the year were prepared they were based on an 'estimated penny product' and thus when final figures are received from Land and Property Services this can lead to additional funds or clawback adjustment.

"The above adjustment includes a rates finalisation element for 2008-09 amounting to 694,346, and a rebate of 173,419 due to the Ministry of Defence and BT following successful appeals against rating valuations.

"The Department of Finance and Personnel has agreed to let Councils defer the impact of these rebates over a period up to four years. Council intends to avail of this relief by deferring the cash flow impact of the clawback over the remaining two years of the current Council, 2009-10 and 2010-11."