asked the Minister for the Environment if he will give an assurance to all local authorities throughout the country and in particular to the democratically elected members of those authorities that the proposed abolition of rates on dwellings and community buildings will not result in a loss of democratic power and initiative for the local authorities; and the basis on which funds will be allocated to each local authority to replace the revenue lost as a result of the abolition of rates.
Ceisteanna—Questions. Oral Answers. - Rates Abolition.
27.
I would refer the Deputy to my speech of 21st September to the annual conference of the Association of Municipal Authorities in which I had the following to say:
On the question of rates, the Government are wholly committed to their manifesto undertaking to abolish rates from 1978 onwards on houses, secondary schools, community halls and all farm out-buildings. Implementation arrangements are a matter for me, as Minister for the Environment, and I will be introducing legislative proposals in the coming Dáil session to provide for these important reliefs. I want to emphasise that no diminution of the standing of either county or urban authorities will result from the decision to abolish domestic rates. From the financial point of view, the Government are determined to see that each local authority is compensated fully for the loss of rates income arising on domestic and other property. Equally, from the point of view of local democracy, we are anxious to ensure the minimum of interference with the existing powers and discretions of local elected representatives.
Clearly, some safeguards will have to be provided for the Exchequer, which will be contributing about two-thirds of gross rates in 1978. At the same time, we fully acknowledge the need for a genuinely local form of government and we are anxious that its contribution should continue to be felt, not least in the vital area of facilitating job creation on which so much Government effort is now being concentrated.
At this stage, I can only say that the Bill to deal with rating arrangements consequent on the Government's decisions will afford Deputies the opportunity to discuss these matters in full.
I am grateful to the Minister for his detailed reply. I appreciate this is a complex subject. The last part of my question referred to the basis on which funds will be allocated to each local authority to replace the revenue lost as a result of the abolition of rates and I should be grateful for a reply on this point if the Minister is in a position to give one. Can he give the House any indication of his thinking at this stage?
As the moment I am involved in discussions with my colleague, the Minister for Finance, on this matter. I have also been in touch with the local authorities by letter. I may be in a position to give the Deputy some indication at a later stage.
Has any circular letter or instruction been issued from the Minister's Department to county and city managers concerning the structuring of next year's income and expenditure or the percentage increase in funds to be allocated to each authority?
Circulars have been issued to county managers concerning the matters of derating, the method of payment and estimates meetings.
Has a restriction been put on the increases which local authorities will be allowed?
It is not a specific restriction. It has been indicated that safeguards will have to be provided by the Exchequer.
Is this not the first step towards centralising local authorities especially in regard to the amount of money they can spend?
I do not agree with the Deputy. The money will be made available to local authorities in lieu of the loss of rates. It will be their business to distribute the money.
Surely the Minister is going to set limits which will eliminate any initiative on the part of local authorities.
Is the Deputy saying that it should be open-ended, that each local authority should be allowed to run riot?
I am saying that this is the first step by the Department to take over the local authorities.
As I said, certain safeguards will have to be provided for the Exchequer.
Does the Minister intend to make good the consequent loss of revenue from any other source? For instance, is the Minister considering the imposition of local income taxes or other local taxes?
No.
What does the word "safeguards" mean? Is it consistent with the Minister's declaration that there will be no diminution of the sovereignty of local authorities?
It is consistent with that statement. Money will be made available to local authorities and it will be their business to spend the money in the same manner in which they spent it prior to derating.
Can the Minister tell us whether there will be specific safeguards for the various areas of expenditure or whether there will be gross safeguards? In other words, will there be a maximum ceiling for the rateable figure or will it be specific to certain items of expenditure?
The expenditure will have to be based on a previous year. Further than that I am not prepared to go.
Can we take it that there will be no extension of service by local authorities?
I did not say any such thing. I said that safeguards will have to be provided for the Exchequer.
The reality is that the Minister has not made up his mind.
That is not correct. I have already told Deputy Quinn that I will be in a position to answer this question in a short time.
28.
asked the Minister for the Environment if he has yet issued detailed instructions to all local authorities regarding the abolition of rates on private dwellings; and if not when he intends to do so.
29.
(Cavan-Monaghan) asked the Minister for the Environment if he has instructed local authorities not to hold estimate meetings or to strike a rate for 1978; if so, the object of the prohibition; when it will be lifted; and if he will make a statement on the matter.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 28 and 29 together.
A circular from my Department of 17th August, 1977, requested rating authorities to defer consideration of their estimates for 1978 until dates to be notified by me. As soon as these dates are notified, adoption of estimates of expenses by rating authorities and determination by them of rates in the pound will proceed in accordance with the appropriate statutory requirements. The reason for deferring preparation of rating authority estimates for 1978 was to enable proper consideration to be given to the measures, including legislative changes, needed to give effect to the abolition of rates on domestic premises and certain other categories of property and also, in the context of overall budgetary arrangements, to the provision required to compensate rating authorities for the abolished rates. When this consideration has been completed, I will notify rating authorities of the periods for preparation of their estimates of expenses and give them detailed instructions in relation to the rating reliefs. Pending this, it may be appropriate to issue further interim advice to rating authorities.
(Cavan-Monaghan): Is the Minister saying that it is proposed to ask the local authorities to submit their estimates to his Department for consideration?
No.
(Cavan-Monaghan): Does the Minister propose to ask each local authority for their proposals for the year 1978 in regard to estimates?
No. It is a matter of postponing their final estimates meetings until the budgetary situation has been clarified.
(Cavan-Monaghan): Does that mean that they will be asked to postpone their estimates meetings until the Minister tells them how much money he intends to allocate to them?
In order to permit them to have proper estimates meetings they would need some indication of the amount of money available.
(Cavan-Monaghan): Is the Department of the Environment going to assume the role of the Department of Finance towards other governmental departments?
That is not so. It is only fair that local authorities should have some idea of the amount of money that is likely to be available for them.
(Cavan-Monaghan): Is it not a fact that the last remaining function of the county councils is being taken from them— the power to strike a rate?
That is not correct. County councils will continue to strike rates. I would remind the Deputy that the Exchequer will be responsible for 60 per cent of the rate and that local authorities will be responsible for 40 per cent.
Order. The remaining questions will appear on tomorrow's Order Paper.
(Interruptions.)
We must have some order.