Dáil Éireann debate -
Tuesday, 27 Feb 1968

Vol. 232 No. 12

Local Government (Buncrana) Bill, 1968 — Second and Subsequent Stages.

Minister for Local Government (Mr. Boland)

I move that the Bill be now read a Second Time.

It proposes to alter the present statutory basis of assessing the annual rate demand by Donegal County Council on the urban district of Buncrana.

A general revision of all rateable property in Buncrana was carried out in 1950 at the request of the urban district council. The revision resulted in an increase in the total valuation of the urban district from £7,563 at the 1st March, 1950, to £11,445 at the 1st March, 1951. The cost of services carried out by a county council for the whole county, including any urban districts in the county, is apportioned between the county health district and the urban districts by reference to the effective valuation of each area. The share of each urban district is levied by way of an annual demand made by the county council on the district. Since no request has been made to the Commissioner of Valuation to have the valuations of property in the rest of County Donegal comprehensively reviewed, the valuation revision in Buncrana resulted in a disproportionate increase in the county demand on that urban district.

Provisions were included in the Local Government (Temporary Reduction of Valuation) Acts, 1954 and 1960, to ease the effect of the valuation revision on Buncrana. The 1954 Act provided that the county demand on Buncrana for 1954-55 would be calculated on the notional valuations which would have applied in that year if the general revision had not taken place and only normal increases in valuation had occurred since 1951. This notional valuation was to be increased annually by a fixed amount of £330 per annum over a ten-year period, at the end of which the normal method of calculating the county demand by reference to the actual valuation would apply. In fact, however, the normal annual increase in valuation between 1954 and 1960 fell substantially below the estimates on which the 1954 Act formula had been devised. To meet the resultant situation, the 1960 Act provided that the county demand on Buncrana was to be calculated in respect of the year 1960-61 on the basis of 70 per cent of the net product of a rate of one penny in the £ in the urban area. This proportion was to increase by 1 per cent of a penny in each subsequent year until, in 1990-91, the county demand would, as elsewhere, fall to be calculated on the net produce of a rate of one penny in the £.

Buncrana Urban District Council have been pressing for a further revision of the method of calculating the county demand on the grounds that the present basis bears unfairly on the ratepayers in the urban district. The council have requested that the county demands for 1968-69 and future years should be calculated on the basis of 70 per cent of the net produce of a rate of one penny in the £ in the urban area. The council's request has been fully supported by Donegal County Council. I have examined the case made by them and I am satisfied that the stabilisation of the basis of assessment of the county demand at 70 per cent of the net produce of a rate of 1d in the £, until such time as there is a general revision of the valuation of the rest of the county, would be justified and would be the only satisfactory solution to the difficulties which have arisen from the general revision of 1950. The Bill provides accordingly. The effect will be to reduce Buncrana's share of the cost of the services carried out by the county council on behalf of the entire county, including the urban areas, to what it would have been if a general revision of valuation had not taken place in Buncrana and to maintain an equitable financial relationship in the future between the various contributing areas in County Donegal.

The Bill proposes that the new arrangements shall apply in respect of the year beginning on the 1st April next. The statutory period for the estimates meetings of county councils expires on the 31st March. I mention this point to draw attention to the desirability of giving the Bill speedy consideration as it is essential, for legal reasons, that it would be enacted without delay if the revised arrangements are to apply in respect of 1968-69. The Bill has been promoted at the request of the parties most directly affected — Buncrana Urban District Council and Donegal County Council — and because the legislation is necessary to rectify an equitable situation. On that basis I commend it to the House.

Mr. T.J. Fitzpatrick

(Cavan): This Bill is introduced for the purpose of undoing an injustice and rectifying an inequity which has arisen in Buncrana. Apparently, in 1950, the urban council were not satisfied that the valuations in the town were fair. They believed some were getting away with paying less rates than they should while others were paying more rates than they should be asked to pay. I can imagine a situation in which two adjoining householders might pay different rates on almost identical properties. The valuation of one property might be £10 while that of the next door property, because of some improvements carried out, might be £30. The urban council requested a revaluation of the town in order to correct such disparities. The town was revalued and the valuation was increased from £7,563 on 1st March, 1950, to £11,445 in the following year. When Buncrana came to pay its share of the general county charges the urban council found they were being fleeced because, of course, the rest of the county had not been revalued. Instead of one house in Buncrana being out of line with its neighbour the town of Buncrana was out of line with the rest of the country. It is for that reason that measures such as this are necessary to rectify that situation and to restore equality. Such a measure would not be necessary had the whole county, or the whole country, been revalued. This measure, however, highlights the grave injustices that can occur under the present system of poor law valuation and the financing of local services.

A person who built a house ten years ago and who has ceased to have the benefit of a remission of rates now finds himself contributing far more to local services than does his neighbour who receives no less services. In every town there are people saddled with huge demands for rates, demands which they are unable to meet. It is possible to have two identical business premises carrying different valuations simply because one has put in a modern shop front. Because of that improvement the valuation is increased from £10 to £30. That is no exaggeration. That sort of jump in valuation is quite frequent. Despite the new front the occupier may not do any more business than his neighbour. Yet he is asked to pay three times as much rates.

That situation was bad enough when the rates were 20/- in the £ or 30/- in the £, but now, when rates are £3 10s in the £, and steadily increasing all the time, the burden becomes intolerable. A grave injustice can occur in the case of a town like Buncrana controlled, as it is, by an urban council. Sufficient pressure was brought to bear on the Minister to induce him to introduce this measure designed to give some relief, but what is the position of the tens of thousands of property owners throughout the country in the same position vis-à-vis their neighbours as Buncrana is vis-à-vis Letterkenny, Ballyshannon or Bundoran? That is exactly the position.

I do not think the Minister can disagree seriously with the proposition I am putting to the House and I am glad the introduction of the Bill affords an opportunity of pointing out this type of disparity. Of course the introduction of this Bill really does not afford an opportunity of doing so. I believe, and I have advocated it in the past and will continue to do so, that the present system of financing local services, such as health and housing, vocational education and maintenance of main roads, is wrong, unfair and unjust and should be scrapped.

That is particularly so when the system of valuation under which the money is raised is not fair, is unjust, as this Bill demonstrates. The town of Buncrana was revalued. Its valuation in 1950 was £7,563; it was raised by approximately £4,000 to £11,445. Supposing that instead of dealing with the town of Buncrana, we were dealing with a valuation in Buncrana of £1,000 — one hereditament with a valuation of £1,000 — and a similar hereditament in Letterkenny of £1,000, and that for some reason or another, the rated occupier of the premises in Buncrana had drawn to him the attention of the Commissioner of Valuation, had his valuation raised in 1950 from £1,000 to £2,000, and that the man in Letterkenny succeeded in keeping quiet and had not his valuation interfered with, would not the very same injustice which is conceded in this case by the introduction of this Bill also operate between those two rated occupiers; and would the Minister in those circumstances come in here with a Bill to do justice to the one individual, the one rated occupier in Buncrana, as against the other?

They are the facts as I see them. That is the alarming position disclosed by the introduction of this Bill. The day has gone when the rated occupier was a man of wealth, when only people with substantial property paid rates. Every tenant of a local authority house in this Republic at the moment is a ratepayer whose valuation is probably between £7 and £10 or more, and who is paying rates of between £30 and £40 a year. He should not be taxed by a system that is admittedly unfair, that is manifestly unjust, that does not hold the scales evenly between one taxpayer and another and that does not attempt to do so.

I concede immediately that this is a big problem, but Governments are elected to deal with such problems. Therefore, I wonder when this Government will get down to the business of devising a system which will hold the scales evenly between one ratepayer and another, instead of introducing piecemeal legislation of this nature to deal with isolated cases.

Mr. James Tully

We, of course, do not oppose the Bill. However, it shows the danger of one local authority attempting to step out in front of everybody else, particularly a local authority within a local authority. The person who originally suggested that this should be done, that Buncrana should attempt to revalue, was dealt with by the electorate when he next went forward for election.

The main point about this is that it emphasises one problem. I understand now that the urban council there were disbanded. Of course that was one way of dealing with it. However, it brings out the problem which has affected the country since the devaluation of the £20 farmer. The Minister must be aware of cases in his own constituency in which farmers on £20 valuation, with holdings and houses in proper condition, pay £5 in rates per year while a cottier living beside one such farmer, with an acre of land or perhaps less attached to his cottage, is paying £20 a year on the cottage. It makes one wonder whether this thing can ever be straightened out.

I am speaking of the country, apart from the town. The small businessman or householder in a town seems to be in a worse position in regard to rates. Therefore, I should like to find out from the Minister what has happened about all the proposals the Government had to do something about the system of local taxation. They should have now reached some kind of finality. Though it is true that there is a rebate of a kind during ten years on a new house, nevertheless the man who has a decent house and tries to keep it in good repair has to pay high rates. I wonder whether this question has been considered at all by the Government. After all, what has happened in Buncrana happens every day. A man who builds a new house or renovates an old one has a very high rate struck, whereas a neighbour beside him whose house has been kept in good order during a period of years pays only a fraction of the rates struck on the other man. Are the Government doing something about it?

I was interested in Deputy Fitzpatrick's hypothesis of a new revaluation of the entire country. The last general valuation was carried out in 1857 by Griffith's outfit and though he at the time did a reasonably good job of it, things are different now. Is it not a fact that if there were a general valuation now, we should have much higher valuations placed on most properties and a very much reduced county rate? Whether that would please anybody is a matter we cannot debate today.

There is just the one point. I should like the Minister to let me know if, in fact, there is any proposal to do something about local government taxation.

Mr. Harte

I agree with this Bill because it lessens the burden of the rates on the town of Buncrana. While I freely admit that this is a very complex business, nevertheless I feel a certain pride in the fact that in 1950, a number of councillors in the Buncrana Urban District Council — people who could be described as at the bottom of the political ladder — were far-seeing enough to draw attention to the fact that this system of taxation in this country is wrong, antiquated and needs to be overhauled. They made their protest, for various reasons. Some of them, on their own initiative and enterprise, reconstructed the old premises into what appeared to be modern or up-to-date premises at that time, by having them tiled or giving them vitreolite fronts or black glass fronts, and so on. These were the only variations carried out.

Maybe a shop window enlarged or a new entrance was made to the business premises but there was no general structural overhaul of the property whatsoever. These individuals improved the appearance of their premises thereby creating a better impression in a tourist seaside resort. The rate collector or the official responsible, in the course of his duties under the law of this land, reported the matter to the secretary of the county council who, in turn, is obliged by law to pass on the information to the Valuations Office here in Dublin. These people, then, because of their enterprise, found that their valuations were increased. It drove them to the point of asking for a revision of valuations of the entire town.

I must admit that, in the past when I visited Buncrana, I was not particularly interested in the rates of the town but, now that I am, I can take a certain amount of pride in the fact that those men set out, in 1950, on a lone battle of protest to the Government that this system of taxation is, in the extreme, wrong. The only thanks they got for their trouble was that their valuations were increased from £7,000-odd in 1950 to £11,000-odd in 1951. In other words, the iron fist method was used to crush any protest, no matter how legitimate the claim might be. The iron fist method was used to crush any further attempt by Buncrana or any urban district council to say to the Minister and to the Government that the system in this respect is wrong.

Now, people in very high places are beginning to take note that the rating system is wrong. Health should be a national charge. Select any volume of Dáil Debates which contains speeches by former members of the Fianna Fáil Government who held office as Minister for Health when different Bills were brought into this House and read them. I am thinking particularly of speeches by Deputy MacEntee as Minister for Health in 1953. He said then that the Health Bill, when enacted, would not cost more than 2/- in the £. I am not familiar with the exact proportion of the rates which health is costing in Donegal but it must be in excess of 2/- in the £.

Mr. James Tully

It was the present Senator Dr. Ryan, who was Minister for Health then, who said that.

Mr. Harte

I stand corrected: I apologise to Deputy MacEntee.

Mr. James Tully

Never mind. Deputy MacEntee said so many other foolish things that it does not matter.

Mr. Boland

It does not arise on this measure. This deals with Buncrana.

Mr. Harte

In 1950, the people in Buncrana saw through the fallacies of the rating system.

Mr. Boland

This Bill deals solely with the amendment of section 10 of the Local Government Act in relation to the urban district of Buncrana.

Mr. T.J. Fitzpatrick

(Cavan): On a point of order, the very object of this Bill, as far as I know, is to relieve Buncrana of some of the health charges payable by the county and which Buncrana Urban District Council contract to the county council.

Mr. Boland

It is not.

Mr. T.J. Fitzpatrick

(Cavan): I think it is.

Mr. Boland

This is to relieve them of the effect of the revision of valuations they carried out.

Mr. T.J. Fitzpatrick

(Cavan): This is to relieve them in respect of health charges.

Mr. Boland

It is not.

Mr. Harte

Deputy Fitzpatrick and the Minister may agree to differ on this particular point. No matter whether or not the Minister agrees with this, the naked truth is that, as far back as 1950, members of Buncrana Urban District Council saw that the rating system was wrong. Now, in 1968, we have people in very high places in Government telling us that it is wrong and that something must be done about it. I want to know when action will be taken.

As Deputy Fitzpatrick says, this is a very serious problem. It is one that will not easily be answered. As Deputy Fitzpatrick also says, one of the reasons Governments are elected is to solve serious problems. No definite approach has been made in my time in this House by any Minister for Local Government to attempt to settle this problem. Indeed, not alone has health been accountable for extra rates in the county health district of Donegal in general but, now, in maritime counties such as Donegal, we face the extra burden involved in contending with coast erosion and drainage. While we welcome these things and will give every assistance to the Government which they require, nevertheless extra taxation must be collected for whatever steps may be necessary in relation to coast erosion and drainage. We welcome such corrective action because we have been crying out for it for a long time. Nevertheless, the fact of the matter is that this expenditure, which should be a 100 per cent State grant and certainly not less than 75 per cent, is a complete charge on the local rates.

Late as it may be, I feel the Minister for Local Government must be thanked for the interest he is taking in the Buncrana rating area. I trust that, in his spare time, he will read some of the remarks I have made and take note of them.

Mr. J. O'Leary

Were it not for the fact that the members of Buncrana Urban District Council in 1950 — upon whom Deputy Harte looks back with pride — requested a general revision of all rateable property there, without examining the consequences, we should not be dealing with this Bill here at all. I think the remainder of the debate relating to valuations and rates in general is irrelevant. In 1950, the urban district councillors of Buncrana made a serious blunder inasmuch as they should not have moved for a general revision of all valuations within their area without first consulting the remainder of the county so that the valuations of the whole county would be revised at the same time.

Mr. Boland

As Deputies know, an inter-departmental committee has been examining the whole question of local finance and taxation. Two reports have already been published. The third report is almost ready to be published and the fourth report, which will be the final report, is in course of preparation.

In publishing these reports, the Government made it clear that they were not committed to the suggestions in them but that the reports were being published for the purpose of stimulating informed and constructive criticism. This Government have never pretended that there is any quick or easy solution to the problems of local finance. It is a complex subject. We believe that this thorough investigation was a necessary preliminary to the formulation of comprehensive proposals for improvement. It should be made clear that the Government are not committed to the suggestions that have been made so far. We are looking for comments on these proposals. As I have said, the remainder of the committee's reports will be available for the public information within a very short period. I think that this is a wise way to approach the problem, which is a difficult and complex one.

I am quite in agreement that the present system of raising local taxation is by no means an ideal one. It is not such an easy thing to decide what would be an ideal system but it is quite clear that the total amount of money required will have to be raised in some way or other from the people, so that any changes that are decided upon, if they result in some people paying less will also mean that other people will pay more. It is futile for Deputies to suggest that some painless way of financing all these services can be arrived at. It may be that the decisions that are eventually taken will result in some people having to pay less, but, if that is so, others, obviously, will have to pay more.

I should point out to Deputy Fitzpatrick that it is not correct to say that this deals solely with the question of relief from health charges.

Mr. T.J. Fitzpatrick

(Cavan): County charges.

Mr. Boland

County charges cover many other things besides health charges.

Mr. Harte

But they do include health.

Mr. Boland

Of course.

Mr. T.J. Fitzpatrick

(Cavan): That is what we are saying.

Mr. Boland

They include many other things besides health. They cover such things as main roads, public assistance, and so on.

Mr. T.J. Fitzpatrick

(Cavan): The Minister tried to argue that health was not relevant to the discussion.

Mr. Boland

I definitely say that what Deputy Harte was saying was completely irrelevant to the Bill before us.

Mr. T.J. Fitzpatrick

(Cavan): It was not.

Mr. Boland

I should point out to Deputies that the proportion of these charges which is met by the State has been increasing consistently in recent years. In the current year, 52 per cent of expenditure will be met from State grants, 32 per cent from rates and 16 per cent from miscellaneous receipts which are mainly such things as rents from local authority houses. As I have said, the percentage met by the Exchequer has been consistently rising. In 1938-39, the percentage was 39.2; it was 42.6 in 1956-57; 50, approximately, in 1966-67 and it is now 52. At the same time, the percentage met from the rates has fallen from 56 in 1938-39 to 39.7 in 1956-57; 34 in 1966-67 and to approximately 32 in 1967-68. It is clear, therefore, that in the interim, while we are waiting for the committee to report, an increasing percentage of the total expenditure is, in fact, being met by the Exchequer, which means that it is being met by central taxation rather than by rates. In County Donegal, State grants met, in fact, 70.4 per cent of the expenditure.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.