Derry City and Strabane council is considering legal action over Stormont funding cuts that could lead to rate increases and the axing of services, it has been confirmed.
The council said it is drawing on cash reserves to plug a multi-million pound budget hole in light of planned cuts to a 'Rates Support Grant' from Stormont.
Seven councils in total receive funding from the Rates Support Grant, designed to support the least wealthy and most rural or deprived council areas.
Read more: Five years to reach 6,500 students at UU Magee campus after Irish government cash boost
Derry city and Strabane council, with the highest unemployment rate in Northern Ireland, is "the most significantly impacted".
Mid Ulster Council has already taken a judicial review against the Stormont Department responsible - the Department for Communities - and Derry City and Strabane council has now confirmed it is "exploring participation" in that legal action.
At a governance and strategic planning meeting of the council earlier this month, a council official warned: "If you're looking at the cuts that we're looking at, there is no mitigation, the money isn't there.
"In a sense, it's death by a thousand cuts."
And in a report prepared by council officials, officers said the cuts will “clearly have a disproportionate adverse impact on the Catholic population”.
The report added: “Our macro analysis of the councils in receipt of the rates support grant finds that they are overwhelmingly of a nationalist persuasion.
“Impact analysis from the Census 2021 illustrates that the Catholic population within the seven impacted councils is 51%."
In a statement, a spokesperson for Derry City and Strabane council told Belfast Live: "This grant is allocated to the seven least wealthy and most rural and deprived Councils to assist towards delivering equality of service provision with the more wealthy Councils.
"The regional grant which once stood at £20.497m has now been reduced to £4.9m. Derry City and Strabane District Council is entitled to 20.05% of the overall funding pot and is the most significantly impacted Council.
"If the grant was restored to its original and required levels, Council would be entitled to £4,109,649 as compared to the current proposed £982,450 allocation."
The spokesperson continued: "Council has issued a robust response to the EQIA (Equality Impact Assessment) issued by Department for Communities in respect of the cut in the hope that this will result in the cut being reversed or reconsidered.
"Council has also agreed to explore participation in a judicial review process taken by Mid Ulster Council against the Department in respect of cuts to the grant."
The council statement added: "In the short term, until these processes are concluded, Council is having to fund the £1.25m budgetary pressure through utilisation of reserves.
"In the medium term as Council works towards settings it’s rate for 2024/25, if the reduction is maintained, this will inevitably result in either service reductions or rates increases or a combination of both."
To get the latest breaking news from Co Derry straight to your inbox, sign up to our free newsletter.
