I am appreciative of the Chair's decision to allow me to raise this matter on the Adjournment. My understanding at this moment is that no local authority as yet have been informed of the percentage increase in the rates that will be made available to them for 1979. We might save ourselves a great deal of time if I can be assured that that information is correct. Is it?
Adjournment Debate: Local Authority Finance.
Yes.
Why has it taken so long for the Minister to deliberate, apparently he is still deliberating, on this very important matter? The question of local government may not be either fashionable or popular, as the almost empty House and the empty gallery this evening indicate. But if in the morning people were to wake up and find that many of the services they take for granted were under serious threat because of inadequate financing, the situation would be changed dramatically.
Toward the closing stages of the Second Stage debate on the Local Government (Financial Provisions) Bill, when the Minister was replying, I raised the question of when local authorities would be informed what would be their percentage increase. From memory I recall the Minister saying he was not obliged to inform local authorities of the increases until at least 23 November. We are now well past that date and local authorities do not know yet how much money they are to get for the coming year. Is the Minister in a position now to tell the House how much money is to be made available for local authorities in the coming year so that responsible publicly appointed officials and their democratically elected councils can decide to apportion those funds in order to provide regular, substantial and necessary services in the area of local government throughout the country? Can the Minister tell us this evening what percentage increase is to be made available this year? This is not a question to which I alone wish to know the answer. Every county and city manager has been crying out for this information since after the August holidays when the traditional process of preparing estimates began for the coming year. I understand that some local authorities have despaired of getting the information they require and have begun a process of preparing their own estimates, independently of a direction or an indication from the Department of the Environment as to what the figures will be.
My second question is to ask the Minister why it has taken so long for a decision one way or the other to be reached. In other words, if the answer to my first question is that there is a certain percentage increase, why has it taken so long to formulate the amount? But if the answer should be that the figure is not available, what is the reason for it not being available? Either way local authorities have drifted from their traditional position of preparing estimates in the months of September and October to preparing them in the last month of the year. Anybody who has been a member of a local authority knows that the estimates meetings are held in one month and that the council meet in the next month to decide whether to ratify those estimates. The process is a two-month one if it is to be carried out properly. I assume that the Minister for the Environment still has some care and consideration for the process of local government. Last year was a transitional year. It was a period when election promises were being implemented. There was a period of adjustment within which reasonable allowances were made by this side of the House, as the record will show. But the same cannot be said for 1978. We want to know now why it has taken so long to reach a decision and whether this delay is to be the norm for future years or at least for the period during which the Minister is in office.
My third question follows reasonably logically from the last one. If local authorities must wait until the Minister for the Environment is given an indication from the real government for the environment—the Department of Finance—can the Minister outline either here or directly to local authorities the process whereby the percentage increase is calculated? We have not simply abolished rates on residential dwellings. We have radically and totally altered the way in which local authorities finance all their activities. There was a time, given a certain amount of discretion from the Custom House, when local authorities decided effectively how much money they wanted initially and proceeded on that basis. A portion of that money then came from central funds by way of direct Government grant. But the initiative, such as it was, rested with the local authorities. However, that initiative has gone totally. The coffin for it is currently enshrined in the Committee Stage of the Local Government (Financial Provisions) Bill which is proceeding slowly through the House.
We are not talking about the abolition of domestic rates but about the change in the way local government services are financed. From this arises my third question. Can the Minister indicate how the percentage increase is calculated in the Department? In fairness to the Minister I must remark that this question was asked before but on that occasion I got a very garbled and clever answer from the Minister for Economic Planning and Development. The Minister being aware of the answer I got then presumably might tell us if the basis, as indicated in that reply, is the basis on which the proposed increase in the revenue for local authority financing, that is the rates, is to be calculated or has the procedure been somewhat more refined? Can the Minister let us know the formula whereby local authority finance needs are calculated and projected?
My fourth question relates to the last. If there is such a formula—and I presume the Minister is not flying by the seat of his pants all the time—is it a national formula or does it relate to each major local authority? In other words, is the calculation of the financial needs for the provision of local government services calculated on a national basis or do the individual financial requirements of separate local authorities come into the calculation? Is it possible to envisage, for example, under that formula or by whatever other means the Minister may have for defining how much money can be made available to local government? Is it possible that some local authorities would get more money than others or would be allowed to raise more money than others?
They are the four questions I am placing formally before the Minister and in his ten-minute reply he obviously does not have a lot of time to answer all of them. I do not know what the procedure is in this House, but I am proposing to take only 15 minutes and not the full 20 to which I understand I am entitled, and to give the Minister time to reply to those four questions. I urge upon him to use fully those 15 minutes and to take his time in replying, but to reply comprehensively. What is at issue is either the continuation and survival of local government services in some or all of our local authorities, or, alternatively, the maintenance of certain levels of employment in some or all of our local authorities.
Finally, I would like to add a supplementary to my question in relation to the calculation formula that the Department have. What factor or variable component do they put into the formula that allows for items of unforeseen expenditure such as provision for the national wage agreement? If they can reasonably say that we cannot anticipate the final outcome of a bargaining process, will they consequently allow local authorities automatic rights to overdraw their allocation in order to meet the terms of the national wage agreement in 1979 or of a Labour Court award which would be the legal responsibility of that local authority? Lest I am not making myself clear, I draw the attention of the Minister to the situation that occurred in Kildare County Council. As reported in the local press, the county manager there was faced with a Labour Court recommendation proposing an increase in funds of a particular kind. He sought permission from the Department of the Environment for extra cash in order to pay it, was refused that permission and was faced with the choice of effectively reducing the workload of that labour unit within the local authority in order to pay the wages.
If I can conclude within the 15-minute period, let me reiterate. Does the Minister know what the amount is going to be? If so, can he tell us now? Secondly, can he state why it has taken so long, until now, and how much longer is it going to take? Thirdly, what is the formula for calculating the increase? Fourthly, is it a national aggregated one; in other words, is the Minister lumping the development needs of Dublin County Council with the development needs of Leitrim County Council, to take one obvious extreme case, and is he assuming that the percentage increase for one authority is the same as that of another? Finally, in the calculation of that formula, what provision does he make for the unforeseen expenditure which must arise simply within the context of the national wage agreement alone? There are other areas in which it could arise also, but let us deal with something clear and specific and for which there is a precedent.
A Leas-Cheann Comhairle——
I understood that Deputy Quinn was forfeiting five of his minutes.
I will not detain the House more than one minute. I remind the Minister that next week is the last week in which estimates can possibly be considered, the following week being Christmas week. That means that estimates cannot now be considered this year by councils. How does the Minister reconcile that with his oft-repeated assertion that councils are still free to order priorities in expenditure in local authorities? This, of course, is wrong. Would the Minister like to answer that question? I am particularly keen to know how the money was found in the local authorities this year to meet two national wage agreements. How was it that in Dublin Corporation £1.8 million did not mean any job losses while £.85 million under the environmental improvements scheme meant 225 extra jobs?
First of all, I would like to clarify some facts. The law surrounding the preparation of estimates and the holding of estimates meetings by local authorities is contained in the City and County Management (Amendment) Act, 1955. Sections 9 and 10 of that Act require local authorities to prepare estimates of expenses and to hold estimates meetings during a period or periods to be prescribed by the Minister for the Environment. The present period is prescribed under the Public Bodies (Amendment) Order, 1977 and the period is at present from 23 November to 31 December.
Deputies are aware that important changes have taken place in regard to local taxation in the past 12 months or thereabouts. First of all, the Government decision to de-rate domestic and certain other types of property came into effect for the first time this year. I have already explained in my Second Reading speech on the Local Government (Financial Provisions) Bill that the cost of de-rating has certain implications for the Exchequer. This must be obvious to everyone. A sum of about £80 million was involved for the current year, 1978. The cost has to be fitted in with the needs of other programmes and services. These other programmes include, of course, the capital requirements of local authorities as well as the many other services and programmes financed by the Exchequer. Many of these services are vital to the creation of employment.
It will be clear enough that in the situation I have outlined the level of increase in local rates through the domestic rate grant is closely tied in with national budgetary considerations. I have made no secret of that or of the fact that there is a need to ensure that continued harmony of local and other programmes of expenditure will continue. This harmony can best be brought about in present circumstances by making sure that the level of increase in local rates is such that it fits in with the broader national budgetary scene for the coming year. The good sense of waiting until the national budgetary considerations have advanced to an appropriate stage will be obvious to everyone. This is what I have been doing and what is required of me. I now assure the House that the relevant national budgetary issues are very well advanced and the necessary considerations are likely to be finalised within a matter of days. I hope then to be able to issue a firm decision on the limit of rate increases for 1979 also in a matter of days. I understand fully also that the position may have caused certain inconvenience to some local authorities. I regret this, but the hard fact is that it was unavoidable.
It could be unavoidable every year.
I did consider prescribing a new period altogether for local estimates, but I felt that this might cause greater upset to local councillors and to the staffs of their respective local authorities. With the prospect of a very early decision, I decided that it was better to let the present period stand for this year. I should mention though, that where any local authority have a practical difficulty—and with Christmas coming in during the estimates period, between 23 November and 31 December, as has already been mentioned here—it is open to any local authority or any rating authority to apply to me for a departure from the Public Bodies Order to enable them to defer their estimates meetings into January if they decide that it is necessary, and already a number of local authorities have applied to do this and I intend to grant their applications.
But the Minister has not been told yet what he is getting, so everybody has more time.
What happens during January?
I said that in a matter of days the local authorities will be notified.
What happens to the programmes of local authorities in January? Can they spend in January "on spec"?
The Minister is to continue his reply without interruption.
The local authorities will not know what is approved.
They are not going to be spending all their money in the month of January or in the early weeks of January.
Deputy Quinn asked a few questions. First of all he referred to the present Bill before this House which is now at Committee Stage. He described it as a coffin for abolishing local authorities or some such thing.
That is what has effectively been done.
(Interruptions.)
Please, Deputies. The Minister has only five minutes.
We gave an undertaking to derate domestic dwellings, community halls, secondary schools and the remainder of farm out-buildings. It was necessary to bring in this Bill to give it proper legal effect. This is the important point. Second Stage came before this House. It did not apply only to what this Fianna Fáil Government were doing during the current year of 1978 with regard to rates. It also legalised what was done by the previous Government when they gave a 25 per cent reduction in the rates by way of the Exchequer becoming responsible for 25 per cent. The two were involved in that Bill. It came up before the House and the Labour Party called a vote. As it transpired they did not have enough Members in the House to have that vote when the numbers were called and counted but what it means in effect is that the Labour Party were voting against the action that their own Minister, Deputy Tully, and the last Government took.
(Interruptions.)
Would the Minister answer my questions instead of throwing up smoke screens?
It was legalising the 25 per cent reduction effected by the previous Government so the Labour Party were prepared to vote against what their own colleagues did when in Government.
(Interruptions.)
The Minister on the question, please.
There were too many non-runners on that occasion. Deputy Quinn mentioned taking into consideration such matters as national wage agreements. There have been national wage agreements for a number of years. The estimates meetings took place at the usual time, November-December. As far as I recall the national wage agreements were never agreed until February-March so local authorities still had to make provision for those before there was any derating. That is point number one.
(Interruptions.)
The Minister without interruption please.
There is a variable factor.
The Minister did not allow it in Kildare.
There is a variable factor and that is the buoyancy. An 11 per cent increase does not mean that a council finish up with an 11 per cent increase because of the buoyancy within many counties, more and more counties from year to year.
Because the Minister allowed the engineers to stay on strike. That is how he made his money.
I beg to differ. If the Deputy wants to learn a little from a person who has never been a member of a local authority he should just sit and listen because I discovered on Second Stage of the debate on the rates Bill that Deputy Ryan did not even know how valuations were compiled or who did them. If the Deputy would listen for a moment——
(Interruptions.)
The variable factor is the buoyancy with the result that many counties finished up with far more than an 11 per cent increase on the previous year. An example is Dublin County which finished up with about a 20 per cent increase because of the development in that county. There are many more counties where——
If the Minister is not going to answer the questions I asked, let us all go home.
I have already answered some of the questions.
What is the formula for calculation?
Deputy Quinn has already asked these questions. The Minister should conclude now on the matter before the House.
The Deputy would like to hear what goes on at Government meetings. Is that right?
In other words, there is no formula. He has answered my question there.
I have not answered the Deputy.
Yes, the Minister has answered my question.
The Minister should abolish local authorities altogether and be done with it and be honest.
With regard to the 11 per cent last year again, for the information of the Deputies, despite the criticism that was made here on Second Stage and on Committee Stage of the Bill before the House—one Deputy from the Labour Party has said I was stultifying the local authorities and he was not here to vote against it when the Members were counted—I am not interfering with local authorities. They can establish their own priorities with regard to how that £80 million was spent last year. It is entirely up to them to establish their own priorities and, for the information of some of the Deputies, despite all the criticism of the 11 per cent there were 16 local authorities that did not even avail of the 11 per cent.
We are talking about 1979.
They struck a rate below 11 per cent so the whole business of interfering with the autonomy of local authorities is a lot of eye-wash and Deputies know it. The Labour Party at least have been exposed as being opposed to derating domestic dwellings as they were here when they called for a vote on Second Stage of the Bill. So we have the Labour Party, who are supposed to stand up for the less well off people, still wanting to continue to have these people rated. That is exactly what they did. They called a vote on Second Stage of the Bill. They called a vote against the derating of domestic property.
(Interruptions.)
That is exactly what they did. It was a vote against derating and it could not be interpreted as anything else.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 6 December 1978.