Dáil Éireann debate -
Wednesday, 1 Jun 1983

Vol. 343 No. 2

Local Government (Financial Provisions) (No.2) Bill, 1983: Second Stage.

Minister for the Environment (Mr. Spring)

I move: "That the Bill be now read a Second Time".

It has often been said in recent years that local authorities have become over dependent on the State for their revenue and have resorted to coming cap-in-hand seeking assistance from the State. This is an unfair reflection on local authorities. The facts are that the State imposed on the local authorities the obligation to give relief of rates in respect of domestic premises and certain other premises under the Local Government (Financial Provisions) Act, 1978, and took upon itself to compensate the authorities in full for the cost of the reliefs given. In order to protect itself from unreasonable rate increases and consequent demands on the Exchequer, the Government of the time took to itself power to limit the increases in rate poundage levels, and this power has been exercised each year from 1978 to 1982.

With the local authorities' main source of revenue thus brought effectively under central control and with their independence and discretion in relation to financial matters largely removed, it became commonplace to hear them criticised for being a drain on the resources of the State and called on to cut back on expenditure and on services. There is no doubt that meeting the cost of rates reliefs has become a major demand on the Exchequer and that the demand is especially difficult to accommodate at a time of severe economic difficulty. But the local authorities cannot be blamed for that situation. I am not suggesting that local authorities can be in any way relieved of the prime need, which is relevant to all public bodies under present conditions, to curtail their expenditures by all practicable means, consistent with giving effect to their responsibilities, and to ensure that their programmes are carried out with efficiency. That being said, the time has come to set the record straight as to how the local authority finances have come to be as dependent as they are on central provision, and to set about restoring to them a proper degree of financial independence. I have already taken one step in this direction by leaving it to the local authorities to decide for themselves on the level of the local rate increase for 1983. This Bill represents another step along the way.

The central purpose of the Bill is straightforward. It will give local authorities a general discretionary power to charge for the services which they provide, where they lack such power at present. It will remove restrictions on charges specified in existing enactments. The services for which charges will be made and the levels of charges will be left to the discretion of the local authorities. This is an important feature of the Bill. As Deputies know, standard charges have been introduced for planning applications under the Local Government (Planning and Development) Act, 1982. Because of the nature of that particular service it is necessary that the relevant charges should be standardised for all areas. There is no good reason, however, why the charges to be introduced under this Bill should be fixed centrally. On the contrary it is desirable that the local authorities should have a discretion so that account can be taken of what is needed, and what is fair and reasonable, and also of the best means of applying the powers in the local circumstances. In line with the provision for an increased local revenue for local authorities the Bill will amend the provisions of the Local Government (Financial Provisions) Act, 1978 dealing with the payment of grants in respect of rates reliefs.

The Bill will provide a general framework for the arrangements for local charges, which has not been there before. At the moment, there is a variety of provisions relating to charges and there are many anomalies. While in general local authorities have power to make charges, there are cases where there is no power in law to charge, there are cases where charges for particular services are specifically prohibited, and there are even a few cases where charges are specified in Acts of the Oireachtas. The Bill now before us will have the effect of overriding provisions which have led to such anomalies.

The basic responsibility for deciding on the amount to be raised by charges will fall to be exercised by the council members in the context of their decisions on the estimates. It will be the function of the manager to give effect to those decisions in terms of the specific levels of charge to be applied. This arrangement of functions is in line with that already existing including that relating to the determination and operation of existing charges. There is no question, therefore, of taking from the elected members the fundamental policy role and responsibility which they have at present. Moreover, there is a well-developed tradition of consultation and communication between the councils and managers in regard to the exercise of local authority functions. I expect that there will be appropriate advice and consultation between them in the implementation of this legislation as well.

The meaning of the expression "service", for the purpose of this Bill is defined in section 1. This definition has been framed so as to cover the widest possible range of the services which are provided and to give local authorities power to charge for any of these services. The range of services is, however, confined to those provided on an individual basis, or, in the words of the Bill, "to any person or in respect of any premises". This means that services, such as street lighting, which are provided on a general or community wide basis are outside the scope of the Bill.

As I said earlier, the approach which has been adopted in this Bill is to give local authorities a general power to charge where they lack such power at present. This is done in section 2 of the Bill which provides that any existing enactment which requires or enables a local authority to provide a service, but which does not contain a power to charge for the service, shall be deemed to empower the authority to so charge. This power to charge will apply even where the existing enactment does not allow of charges being made. Under this section, statutory restrictions on the level of charges will be removed. The effect of these provisions will be to supersede all the provisions which currently restrict local authorities from charging for services or from charging realistic amounts.

I know that local authorities will welcome the additional powers which they will have under section 2 to make realistic charges. I know, too, that they will welcome the discretion which they will have under section 3 to determine different rates of charge in respect of different classes of consumers or of services. This will enable account to be taken of such criteria as rateable valuation, type of premises, quality or frequency of service and so on and, when taken with the provision for payments by instalment in section 6, will provide a considerable flexibility.

Despite this flexibility, I am fully aware that there will be cases of persons who will not be able, because of their circumstances, to pay charges, even with the provision for instalments. I have, therefore, provided in section 5 for waiver of charges on grounds of personal hardship. The Bill does not attempt to define those grounds or to restrict the exercise of this power because this is an area where the decisions must be made on the basis of local knowledge and experience. I have no doubt that local authorities will adopt a humane and considerate approach in dealing with any cases of genuine hardship and I am sure the local authorities will approach the question of waivers in that spirit.

Deputies will note that the question of water charges is dealt with separately in section 8. The existing law provides for the making of charges for water except for water supplied for domestic purposes by urban sanitary authorities. It also contains provisions relating to the administration of these charges. With the abolition of domestic rates, the justification for the separate treatment of urban areas has disappeared. Indeed this situation is now unjust as well as anomalous. It means that those in the urban areas have enjoyed greater benefit from the domestic rate grant than those in county areas. It also means, for example, that corporation or urban council tenants' houses in a county area are paying the county council a substantial water charge in many cases while the corporation or urban council themselves have no entitlement to such revenue from any householders in their own area. It has been decided, therefore, to extend the existing law to cover all water charges. We are also availing of this opportunity to provide for payment of water charges by instalment and for waiver of these charges.

Section 8 also removes certain restrictions on the level of charges specified in existing enactments or agreements. This is necessary to overcome a situation where Dublin Corporation are required under old laws and agreements to provide water to consumers in certain districts outside their administrative area at charges which bear no relationship to today's values. There is no justification for continuing this situation, hence the provisions in section 8.

As I said earlier, the central control of rate poundage increase was a blow to the independence of local authorities. I feel that the need to protect the Exchequer could have been met in a more flexible and imaginative way. I believe we are now moving in that direction for 1983 by allowing local authorities to decide for themselves on the rate to be fixed for those who pay rates by giving them the additional powers to charge contained in this Bill, and by limiting in a corresponding degree the amounts of rates support grants. The necessary amendment of the Local Government (Financial Provisions) Act, 1978 to validate the current arrangements in relation to the domestic rate support grant, to cover the shortfall in this grant in 1982, and to make consequential provisions in relation to rates, is contained in section 9 of the Bill.

While I am on the question of rates, I would like to refer to various suggestions that the introduction of a wider range of charges for services is in effect a reintroduction of rates by the back door. I want to make it absolutely clear that this is not the intention and will not be the effect of this Bill. What we are doing is essentially up-dating, extending and adapting to modern circumstances, the legal basis for direct charges for services which have always been a feature of local finance and which, over the years, have existed side by side with the rating system.

As I say, I believe we are on the right track in getting back towards a sensible system of local authority financing but I would not claim that all that is needed can be done at once. We are in a transitional phase. We must look beyond the immediate problems and try to devise a system of local authority financing which will satisfy the basic needs for the medium and longer terms. These include the need for adequacy of funds for the various programmes; the need for a significant degree of local financial independence and discretion, and the need to limit the demands on central funds for local services. As I said in my recent Estimates statement, I am arranging for a special examination of this matter to be undertaken in my Department at present.

The question of charges is one which has been discussed in local government circles over a long number of years and one to which the present Opposition have declared their commitment on many occasions. I feel sure, therefore, that these proposals will have the full support of this House and I look forward to a constructive and positive debate. I commend the Bill to the House.

Mr. Molloy

This Bill contains the Coalition's long promised proposals to give power to local authorities to make charges for services they provide to individuals and to premises owned by individuals. We on this side of the House recognise the need to broaden the revenue base of local authorities. We agree that local authorities should have the power to charge for services to supplement present revenue sources. However, we are concerned at the far-reaching proposals contained in this Bill which will have very serious consequences.

The Bill contains three major proposals: firstly, that the Minister will notify each local authority as soon as possible of the amount of the annual Exchequer grant and the local authority must then make provision by way of charges to make up any shortfall between the amount of the grant and the amount of the rate relief local authorities are required to give under sections 3, 4 or 6 of the 1978 Act. Secondly, this Bill proposes that the decision to levy charges and the introduction of a waiver scheme will be an executive function, that is that it will be a managerial function, that the elected members will have no say whatsoever in the levying of the charge or in the operation of the waiver scheme. The third major proposal is the removal of the obligation on the Minister to recoup to local authorities a specific amount in lieu of the domestic rate as provided for in the 1978 Act.

This Bill proposes the introduction of radical new local taxation measures without dealing with the most urgent problem facing local authorities of having to pay for services provided by other public bodies, such as health charges and welfare payments to which local authorities must contribute, drainage maintenance charges which they must pay to the Office of Public Works and the payment of education grants which is a charge on local authorities because the Department of Education delay in recouping the money. Many local authorities carry heavy overdrafts because of this. One could refer to other areas where local authorities are being asked to fund schemes for which they have no direct responsibility.

The Bill enables the Minister to require the manager to levy charges for services which would generate revenue equal to the combined poundage of the domestic and agricultural rates, irrespective of the wishes of the local authority members. This is a serious prospect and represents a major change in taxation legislation, opening up a whole new area where additional penal taxes will be levied by ministerial action through the county manager. We are very unhappy with the main provisions of the Bill and go so far as to question the Government's decision to delay Dáil debate on this Bill until the prescribed time for the preparation of estimates has passed. The Minister prescribed the final date for the preparation of estimates as 15 May 1983. We are now at the beginning of June and this is the first occasion on which the local authority members have an opportunity to hear what is behind this Bill. Different impressions have been given at local authority meetings throughout the country as to the power of members and statements by the Minister on numerous occasions have given the impression that the power to levy charges will be a reserved function of elected members. This is not true. We are concerned because the Minister is proposing a fundamental change in the method of financing local authorities which will have far-reaching effects.

When the idea was first mooted the public were led to believe that the Government were extending the power of local authorities to enable them to make charges for some of the services they were providing. This was first advocated by Deputy Peter Barry when he was Minister for the Environment. Assurances were given that this would not be the reintroduction of rates by another means and the Minister has reiterated that assurance today. It rings hollow when one examines the extent of the power which the Minister and the manager will have under this Bill. When Deputy Barry advocated the levying of charges for services it sounded reasonabble that local authorities should have power to charge for some of the services they provide in order to supplement their income, and some local authorities had already been charging small sums for services which they were making available to individuals. The thrust of Deputy Barry's proposal was that the power to levy charges would represent an additional revenue source for local authorities but we now see the Minister's intention to replace the existing revenue source by the introduction of charges.

It is clear that as time goes by the Minister will rely and more on the provisions of this Bill to fund all the services provided by local authorities by way of charges on householders. The Minister stated:

...I would not claim that all that is needed can be done at once. We are in a transitional phase.

The transition is the Minister's intention to enable most, if not all, local authority services to be paid for by charges levied on householders and others.

It was felt when this idea was first mooted that the revenue from these charges would help local authorities overcome some of their financial difficulties. We must remember the assurances given that these charges did not represent the reintroduction of rates in a different form. The local authorities have had financial difficulties in each year since the obligation to collect the domestic rate was abolished under the 1978 Act. That Act made provision for a direct grant in lieu of the domestic rate to be paid to local authorities and also made provision to limit the rate poundage that could be struck by each local authority. There were two reasons for this, the first being to provide the local authorities with the money they would otherwise have obtained if rates on houses had continued. The second reason was to put a ceiling on the level of the rate poundage which could be struck in order to protect the owners of commercial property who would continue to pay rates. Once the restriction on the level of domestic rate was removed from local authority estimate meetings there was the belief that there might be some maverick local authorities who, not being answerable to householders who would represent the bulk of their electorate, might seek to impose penal charges on the owners of commercial property. It was thought fitting therefore to place a limit on rate poundage to protect such people. The Minister is now removing the obligation on a local authority to limit rate poundage and they can proceed to impose a high level of rate poundage on commercial and non-domestic property.

On the other hand, the Minister is not providing the local authority with money in lieu of these rates. He is telling them that he will provide them with a fixed grant and they will have to make up the difference themselves by way of the introduction of charges for services. The Minister can in future reduce the amount of the direct grant because it is not related to any specific amount and there is no base year. In reducing it substantially each year he is increasing the obligation for higher charges at local level.

I do not know whether council members or the public generally are aware of the full implications of this Bill. There is reference in the Minister's speech to provisions in existing legislation for the levying of charges for services. As I have stated the level of charges for services up to now has been very low and it was almost recognised under the Acts under which those charges were levied that they were merely an additional minor source of revenue for the local authority. Here we have a proposal where the charges are intended to become a main source of finance to the local authorities in the years ahead. There will be this major transition — the Minister said we are in a transitional phase — and it is obviously the Minister's intention that this transition will take place over the years with the result that a very heavy imposition on householders and others will take place in each local authority area. This will become a major new source of revenue to local authorities and it is nothing less than the introduction of new local taxation which will have far reaching effects.

As I said, the public were led to believe these local authority charges for services would supplement the existing revenue and the levy would be at the discretion of the members in each area. In fact neither of these things has been done. It could be accepted as reasonable, and was by most fair-minded members of the public, that local authorities might charge something to supplement their income, because, with the fixed level of grant emanating from the Department since domestic rates were abolished and in view of the fact that the limit which the Minister put on the rate poundage did not allow fully for the rate of inflation and for the increase in costs which took place affecting the services which local authorities were providing, a deficit appeared and there was general agreement that there was need for some measures to be introduced to deal with that ever-increasing deficit. It was suggested that a charge for services would be sufficient to allow local authorities the discretion to provide themselves with additional revenue, thus eliminating these deficits but, rather than that simple procedure, we now find it is the Minister's intention not just to provide them with money to deal with the deficit between his grant and the increase in costs locally but to replace his grant completely eventually.

This Bill supplants the existing Exchequer revenue sources with direct charges to local householders in replacement of existing Exchequer revenue funding as provided for in section 9 of the Local Government (Financial Provisions) (No. 35) Act, 1978. The Minister also proposes that all decisions in relation to the levying of charges shall be solely at the discretion of the manager. The Minister referred to that in his opening speech in which he says:

The basic responsibility for deciding on the amount to be raised by charges will fall to be exercised by the council members in the context of their decisions on the estimates.

Any normal person reading that could not but come to the conclusion that the Minister is stating that the basic responsibility for deciding on the amount of the charges will be that of the elected council members. That is what is there in black and white. But that is not what is in the Bill. That is a complete contradiction of the terms of the Bill. In a circular which the Minister issued to county managers on 10 May 1983 — it is numbered FIN 9/83, page 3, No. 10, under the heading of "Functions"— the wording used by the Minister when explaining his Bill to county managers is quite different from his explanation here. He uses much more straightforward language:

The charges functions assigned to local authorities under the Bill will as executive functions fall to be performed by the manager.

In his opening speech to the House this morning he says the basic responsibility for deciding on charges will fall to be exercised by the council members.

Mrs. A. Doyle

Read the next line.

Mr. Molloy

Let the Deputy read it. Why not stand up here and say exactly what the Government are doing? Why does the Minister not tell the elected representatives of local authorities clearly what he intends to do? Why has he not done so up to now? Why does he continue to give the impression that elected members will have this as a reserved function: the decision would be theirs to decide on the level of the charges. That is the impression he gave. In his speech here today, and I want to pinpoint the difference in the language he uses here and the language he uses outside the House when he has attended public functions. In the document he sent to the county managers he states specifically that it is their function and the members will have no power whatsoever to decide on the level of the charges or whether any charge should be introduced.

I oppose that very positively and, unless there is some indication from the Minister of a change of mind here, we shall have to vote against this when the time comes. It is quite clear that the locally elected members will have no say whatsoever as to when charges are to be introduced or the amount of such charges. We agree in principle to broadening the revenue base of local authorities and we could support the Bill if that were all that was asked for but there are fundamental aspects here to which we are opposed. One is the removal of the obligation on the Exchequer to recoup the amount of domestic charges to be at the sole discretion of the county manager. We believe the commitment to recoup domestic rates should not be reneged upon. The present arrangement should continue whereby the Minister is required under section 9 of the 1978 Act to recoup local authorities an amount equal to the revenue on domestic rates.

The existing arrangements have operated fairly satisfactorily and should continue. The limit on the rate to be struck acted as a safeguard to owners of industrial and business property which was not derated. That, of course, is now being removed by the Minister. Any charges levied should supplement existing revenue sources and whatever requirements are necessary should be introduced to facilitate this. It is well within the competence of the Minister and his Department to devise a means whereby there would be a relationship in the amount of the direct grant from the Department and the amount which previously would have been collected under the previous rating system.

Unless there is some device, whether a continuation of the existing provisions of section 9 of the 1978 Act or some other device which the Minister may come forward with in the course of the debate, then we are entering into a situation where in each succeeding year the Minister, now no longer bound to recoup local authorities the amount of the rate on domestic houses, will be able to reduce substantially the amount of the grant from his Department. He will thereby increase the amount to be collected locally through the charges. The charges he suggests this year should bring in £65 million. I would like him to indicate whether there is any possibility at this stage of the £65 million being collected in 1983. I have not the information that the Minister would have on every local authority but those about which I have information have not been levying the type of charge which the Minister was suggesting initially and a very substantially reduced charge has been introduced where one has been introduced at all. There is now a serious doubt as to whether the amount, which the Minister estimated at £65 million, will, in fact, be collected in the various local authority areas. The Minister might refer to that matter when he comes to reply.

As I mentioned, the level of rate limit fixed in the past allowed for increases, in some years 12 per cent, in some years 11 per cent and in some years 10 per cent. In 1982, the figure was 15 per cent. These fixed amounts were paid to the local authority in lieu of the domestic and agricultural rates. This year the amount recouped is in many counties substantially lower. I think there was some mistake made in the Galway allocation. At one stage the manager estimated that the amount being recouped in lieu of the rates to the local authority was 3 per cent. There was some small increase afterwards which may have brought it up some percentage points but it was not a great deal over 3 per cent. So, they had got 15 per cent last year and 10, 11 and 12 per cent in previous years. Following this change the recoupment was down nearly as low as 3 per cent but I understand that the rate that the manager in that county is proposing should be struck shows an increase of 20 per cent on commercial and industrial properties because the limit has been removed. So, the Minister's contribution is decreasing and the contribution of owners of commercial and industrial properties is being increased very substantially and, of course, in many cases these people will also be asked to pay for the services for which an individual charge is about to be imposed. It is a continuation of this Government's obsession with taxation. One wonders where it will lead.

There seems to be a deliberate attempt on the part of Government to stifle initiative and enterprise, to choke it with taxes and at the same time a refusal on the part of the Government to replace with Government funds the investment lost by their own action. So, we are in this terrible recession and the Government are making matters worse and are contributing to a substantial increase in unemployment which is the biggest single crisis facing the country now and for the years ahead. It is difficult to see how the Government's policy will succeed in creating new jobs in the years ahead because of the many punitive measures they are introducing and which act as a serious disincentive to investment in every sector of the commercial and industrial life of the country and which also affect wage earners in the levels of PAYE, PRSI, charges for services, the huge increases in VAT and the continuous flood of taxation increases. The community are becoming punch drunk from tax increases and unless there is a re-think on the Government's part the prospects for the nation are not bright. However, that is for another day's debate.

As I have said, the Bill proposes the introduction of radical new local taxation measures. It enables the Minister to require the manager to levy charges for services which will generate revenue equal to the combined poundage of the domestic and agricultural rates. That is a very serious proposition. There is evidence that the Government are obsessed with taxation. Every possible means is devised to extract contributions to the Exchequer out of the wage earner's pocket. This Bill represents a major change in taxation legislation and opens up a new era where additional penal taxes can be levied. The Exchequer obligations to fund local authorities as laid down in existing legislation are being removed in this Bill. The effect is, of course, to leave an open-ended situation where the Minister can apply the squeeze and the county manager must respond while the elected members of local authorities look on and play no useful role in the imposition of taxation other than to observe the manager's actions.

Our other major objection is to the decision to make the levying of taxation an executive function. The Ceann Comhairle will agree that this is a complete negation of local democracy. It is the opposite to everything the Minister's party and the Coalition parties have stated in this House and in policy documents over the years. It is dishonest to suggest that the proposals in this Bill represent a devolution of power to local authorities. In a democracy the power to levy taxes must always lie with the elected representatives of the people. There should be no taxation without representation. The elected representatives of this parliament will never allow the civil service to decide taxation measures. The elected members of local authorities should not be expected to allow city and county managers to decide taxation measures in their local authority areas.

I understand that the General Council of County Councils made a draft available to the Minister on their ideas of financing and the powers of local authorities. I do not know whether the Minister has made any response to the suggestion as yet. In their submissions they quote from an ESRI report on local taxation — No. 84 — the following extract:

The arguments that are advanced in favour of maintaining a significant role for local taxation as a source of finance for local expenditure seem to require that genuine accountability and answerability in fiscal matters to a local electorate exist and this in turn seems to require that the local authority at the very least controls the rate at which local taxes are levied.

I do not consider that the manager is the local authority. The legislation is drafted in such a way that the Minister can say that when he refers to the local authority he is referring to the manager but most members of the public feel when the Minister makes reference to the local authority that he is referring to the elected members. Many people do not understand the division of power that exists at local authority level between the manager and the members.

If there is one power that I and members on this side of the House consider to be essentially a matter for the members of local authorities as distinct from the manager, it must be the power to levy any form of taxation. The introduction of these new charges cannot be considered as anything other than taxation. If we are imposing new charges we are imposing new taxation and all decisions in relation to their introduction and the level at which they are imposed should be made only by the elected members. The members of Fine Gael and Labour who form the Coalition Government should realise that if they support this Bill they are destroying a long-standing principle which has applied in regard to taxation measures not just in this democracy but in most democracies throughout the world. One cannot equate the previous provisions for the charging for services, which represented a very minor amount of money, with the provisions in this Bill to levy charges which will bring in amounts equal to the rate poundage. We are talking about very heavy levels of taxation. It cannot be called anything other than taxation, penal taxation, in fact, as will be proved to be the case.

We find ourselves in the position that in general we subscribe to the principle that local authorities should have the power to charge for services but only to supplement their income, to supplement existing revenue sources. One of the principal sources of revenue has been the direct grant from the Department. In abolishing section 9 the Minister is abolishing the Exchequer obligation to continue to fund local authorities in that way. He is replacing it with a very unsatisfactory instrument which will be the cause of much dispute at local authority meetings in the years ahead. It is well known throughout the local authority service that county managers and senior officials in local authorities were opposed at the outset to the introduction of these charges. They held special meetings and insisted they would resist them. However, their resistance melted overnight. As I understand it, a meeting was held between the managers and the Minister —I am open to correction on this because I was not present — and at that meeting the Minister gave an assurance to the managers that they would have the authority to decide on the charges; in other words, it would be an executive function. Once they got that commitment from the Minister their resistance disappeared. They realised that when the Minister had got his Bill through the Dáil they would have one of the most powerful weapons county managers had got in their hands since the establishment of the county managerial system.

County managers have not said one word in opposition to the levy of these charges, whereas all last year they were very unhappy and critical of the notion that they should have to impose charges. Their opposition disappeared because they got their way with this Minister and with this Government. Under a Fianna Fáil Government they would not have got this power. Fianna Fáil would have ensured that the true principles of taxation would have applied: no taxation without representation. A county manager is not elected by anyone. Taxation should be levied only by those who have to face the electorate, who have to put their names on the ballot paper for election or rejection. They are entitled to levy taxation because they are answerable to the people. A county manager is well protected within the system, where he cannot be made answerable to any section for his actions, other than if he absconded with money or if he broke the law in some other way. However, he will now have power to levy charges on the people. I know the Minister's answer will be that the estimates have to be adopted by the council members but that is a weak response. The Minister has diluted the whole principle of the levying of taxation and I say shame on him for doing it. On this side of the House we will not support him in this matter.

Local authorities have had financial difficulties. It would have been satisfactory to allow them to bring in these charges if the existing sources of revenue were to continue so that they could overcome their financial difficulties by levying charges as was originally intended and as was originally understood before this major change took place. They would have been able to meet their full financial commitments by the levying of these charges. They would have been able to work off their overdrafts and possibly to recoup the health boards and the Office of Public Works from whom money is being withheld. The financing of local authorities is in a critical state. The Minister knows that many of them have only been able to strike a rate by refusing to pay the health boards or the Office of Public Works for drainage works carried out by that office. They have statutory obligations to pay other public bodies moneys for services in which local authorities themselves are not directly involved.

In this House it is difficult to get time to bring in reforming legislation but it is in this area that the Minister should have been concentrating his energy and his thoughts. There is a great need for new legislation, for reform of the local taxation system and the financing of local authorities. That area is full of anomalies and it is the cause of much frustration to members of local authorities that they continue to be burdened with these charges. They existed when Fianna Fáil were in office and when the former National Coalition Government were in office. These statutory obligations have been with local authorities for 30 years. I find the Minister is inclined to answer points by saying that similar situations existed when Fianna Fáil were in office. We are here to try to improve the system and if we can do that jointly everyone will thank us for it. However, nobody will thank us for dealing with small, petty political points across the floor of the House. I am anxious to make a positive contribution and to assist the Minister to improve the operations of local authorities. That is the matter we are discussing here and for which he has responsibility.

If the Minister had proceeded along the lines we intended and which were originally enunciated by the then Minister for the Environment, Deputy Peter Barry, it would have been possible to do some of these things. It would have been possible for local authorities to consider expanding existing services and the introduction of new services. They could have facilitated the implementation of new legislation. We passed legislation dealing with litter but the local authorities did not get any substantial funds to implement the main provisions in that Act. We also passed legislation with regard to water pollution but, again, very little money was given to implement it. The effectiveness of such worthwhile progressive legislation has not been seen on the ground because local authorities have not had the funds to administer properly the new legislation. We had long and useful debates in this House on these various measures but when the measures passed into law the local authorities were able to make only a token gesture towards their implementation because of their financial situation.

It was thought in view of the new charges being imposed that the extra revenue would allow local authorities to be more positive about legislation. At the moment they cannot carry out fully their responsibilities in this area. The point is that we are not getting extra revenue under this proposal. We are replacing existing revenue sources and that is the kernel of the Minister's intention. What started out as a good idea to provide local authorities with more financial freedom to undertake new services, to expand existing services, to carry out their responsibilities more fully and to meet their financial obligations in a realistic way has come to nothing. All the great hopes have been dashed.

A useful progressive measure has been transformed into an instrument that will replace the responsibility of the Exchequer to fund local authorities in lieu of domestic and agricultural rates which this House abolished. In doing so this House placed an obligation on the Exchequer to fund local authorities in respect of those amounts. In deciding that, this House proposed to change the onus from direct taxation such as rates to indirect taxation by way of funding through the Exchequer, with the Exchequer collecting the money by way of VAT and PAYE. These forms of taxation were increased substantially to fund the Exchequer in order to enable it to replace the moneys the local authorities had obtained through the rates. We have suffered the increase in taxation but now we are going to impose charges locally and relieve the Exchequer of the responsibility of funding the local authorities. At the same time, the Exchequer will not make a corresponding reduction in the increase of taxation introduced to provide that money. It is a continuation of this wave of taxation measures which the Government are hell bent on imposing on the people.

The Minister is well aware that local authorities regard the full cost of domestic rate relief as being the responsibility of the Exchequer. Any additional charge to be levied to relieve Exchequer liability can only be seen as rates introduced under a different guise. No words of the Minister can change the reality of that, the Minister is now reneging on the Exchequer responsibility and in doing so he cannot expect the support of this party unless a commitment is given in this Bill to pay a fixed amount each year in lieu of domestic and agricultural rates, otherwise the managers' charges will be used to replace the rates as the main source of local authority revenue.

In regard to the charges themselves I would like to ask the Minister some questions. Could he clarify whether he proposes that any of these charges could be imposed on a country-wide basis without regard to whether the householder has the benefits of the service for which he is being charged? Otherwise it would seem that the local authority may introduce a charge only where a person is benefiting from a service provided by the local authority. I would like the Minister to clarify that that is so and that if I have the benefit of a refuse collection and the local authority decide that they will introduce a charge for refuse collection I will be obliged to pay it. If I am in an area where there is no refuse collection will I in any way be charged for a service from which I am not benefiting? It would seem that that could not be so, but you never know with legislation. I would like to hear the Minister on that.

I would like him also to clarify whether a householder can opt out. If I decided that I do not want to pay £30 or £50 a year—or whatever the figure is; it might be £200 or £300 from the way the Minister is going—the local authority may decide that I am not a person who would qualify for a waiver. I may feel that I am not able to pay the charge but the local authority may not agree. I decide that I do not want the service because I cannot pay the charge and I put the stuff on the back of a trolley and take it off to burn it or dump it myself. In a case such as that has the householder the right to opt out? Many people are concerned about this because if a substantial number of householders in a street or an area adopt that attitude and decide to opt out it will not be economically viable for a local authority to continue to provide a refuse collection service in many of these areas and the other householders who had agreed to pay the charge would be without a service. The Minister must have given some thought to this because the question has been raised in a number of local authorities. I would like to hear what he proposes in this regard. I understand that one county manager informed his members that if a certain percentage of householders — I forget the percentage — refused to take the service in an area then no such service would be provided. He was referring to refuse collection. Does the Minister agree with that? Has he made any provision for this type of situation? How does he propose to collect these charges from people who do not want to pay them? Is it his intention to bring all of them to court as is provided somewhere in the Bill and will we arrive at a conflict situation over these charges in that way?

In regard to water supplies in urban areas there is no doubt that the reaction from large sections of the community, people who are already paying what they consider substantial rents for local authority houses, is that they are not at all enamoured of the notion that they should now have to pay up to £50 or £100 to a local authority for water which traditionally has been supplied free of charge to householders in urban areas. Will the Minister turn off the water if the householders refuses to pay the charge or, vice versa, if the householder turns off the stop tap outside his hall door will the liability to pay stop also?

What administrative arrangements are being entered into at local authority level to ensure the smooth introduction of these charges if the Minister intends to proceed with them? Who will collect the charges? Are we establishing a whole new set of employees and range of jobs at local authority level for the collection of these charges, bearing in mind that employed in every local authority are rate collectors who have very little to do following the abolition of house and agricultural rates and also in many local authorities the amount collected in rates and the cost of collecting them? I recall one local authority area where the cost of collecting the rates was £0.25 million and the amount of rates collected something like £1.2 million. Where are the economics in the system? Where is the Minister's intention to ensure efficiency and value for money, as he mentioned in his Estimate speech here some weeks ago? I have asked these questions in my contributions. Since then I have had no response.

I ask again what the Minister's intention is with regard to rate collectors. These people are employed at a very substantial salary. They have a very small workload and their job in many cases can be done in a few weeks or months of the year. Now we have the Minister's intention to impose the collection of charges on householders. Who is to collect them? Will the rate collectors be involved in this? After all, these charges are only replacing the rates and there is no point in saying that that is not so. What estimates has the Minister got of the cost of collecting these charges to enable us to see the full value to each local authority and the net income to be derived from the charges, having paid the cost of collection and the cost of office work etc. which will arise.

Also I would like the Minister to inform the House whether public bodies will have to pay these charges. Will the health boards, hospitals and old people's homes have to pay them? If so, what provision has been made in the 1983 Estimates to enable them to pay these charges to the local authority? In the Estimates which have been published has any provision been made for wage increases in this year? It seems to me an anomaly that no provision is made for wages increase and the Minister is deficit-budgeting in a big way in regard to each local authority in that respect.

What arrangements will be made exempting certain categories of beneficiaries from the charge and what arrangements will be made under section 5, the waiver of charge on the grounds of personal hardship? Will this be a reserved function? I understand that it will. I intend to put down an amendment along the lines that, as well as the power to decide whether charges will be introduced and the level of the charges being reserved functions, the making of the waiver scheme would be a reserved function. It can be administered by the manager but the scheme itself must be adopted by the elected members. Section 9 is one of the principal sections of the Bill. In this section it states that the Minister shall make to a rating authority a grant not exceeding the aggregate of the allowances made by the local authority under sections 3, 4 or 6 of the 1978 Act.

In reply to Parliamentary Question No. 662 in the Official Report, Volume 342, of 17 May 1983 the Minister said:

Fixed allocations have not been made in respect of rates support grants. In the case of the domestic rates grant, the voted provision for 1983 will be divided among local authorities on the basis of rateable valuations of the relevant domestic property in each area and, in the case of the grant in lieu of rates on land, on a basis equivalent to land valuations.

Would the Minister state what the exact mathematical formula is on which he made his decisions in regard to the grants to be made in each local authority, because there is no requirement in the Bill to divide a fixed grant in the way in which the Minister stated in reply to the parliamentary question? The Bill merely says the grant shall not be greater than the aggregate of the allowances in sections 3, 4 or 6 of the 1978 Act. Section 9 gives the Minister wide discretionary powers in determining the amount of the fixed grant each year. The parliamentary reply seems to indicate that the amount of the fixed grant is based on rateable valuations of the relavant domestic and agricultural properties but there is no such provision in the Bill and one of our major objections is the fact the this wide discretionary power is available to the Minister.

There is an obvious contradiction in what he informed me on 17 May and what is contained in the Bill. It is obvious that the Minister can reduce substantially the amount of the grant each year and then direct the manager to impose charges to make up the shortfall. That is clear from line 17 of subsection (2) which states "shall include in such manner as the Minister shall direct a provision in respect of such excess". That is a very important part of the Bill and gives the Minister power to direct the manager to introduce charges and the members have no say whatsoever. That is again in contradiction of what the Minister stated when he introduced this Bill.

In reply to Parliamentary Question No. 662 in the Official Report, Volume 342 of 17 May 1983 I was also informed that local authorities had been given a preliminary estimate for the payments they may expect to receive this year. However, when the Galway County Manager presented his estimates to the members he stated that there would be no upward adjustment of fixed State grant in respect of domestic and agricultural rates during 1983. Which statement is correct? Is the Minister right in saying the the estimates he has notified are merely preliminary estimates and that there can be an upward adjustment during the year, or is the Galway County Manager correct in the information he received from the Department that there will not be an upward adjustment of the fixed State grant?

The local authorities are expected to pay for services for which they have no direct involvement or responsibility. They provide funds for sheep dipping, which is obviously a matter for ACOT to whom that responsibility should be transferred. We would welcome legislation which would carry out major reforms in the local authority system, not this imposition of a tax to replace rates. The administration and the funding of grants for school meals and higher education are strictly matters for the Department of Education and the local authority should not be involved. Weights and measures, courthouses, coroners and inquests should all be the responsibility of the Department of Justice. The responsibility for abbatoirs, slaughterhouses, meat, milk and dairies should be transferred to health boards. The whole question of malicious injuries is obviously the responsibility of the Department of Justice and those charges should not fall on local authorities who do not have the resources or the responsibility for the levying of malicious injury claims. The question of the cost of arterial drainage is a matter for the Board of Works and I urge the Minister to transfer the costs to them. Welfare cost allowances should also be transferred to health boards.

The time has come for the Government to consider transferring from central administration to local authorities the administration of schemes with which they are directly involved, where they have an active responsibility and where they participate in administration locally. Schemes continue to be administered centrally at a huge cost to the taxpayers. I urge the Minister to consider transferring the administration of new house grants, home improvement grants and group water supply schemes to the local authorities, away from Dublin, this second layer of bureaucracy which feels it has the right to oversee all decisions in regard to the administration of grants which they are funding. It is an unnecessary cost on the taxpayers and a waste of their money. I know the Minister of State agrees with me. I hope he has convinced his Minister and the Government. He will get full support from this side of the House for any measures to transfer the administration of housing grants and other schemes of that nature to the local authority where the real knowledge in these matters exists. The Board of Works supply money for local loans for water and sewerage schemes and they are administered from Dublin. I suggest that the Department of the Environment should control the allocation of funds to local authorities and the administration of schemes, house grants, etc. should be carried out in each council area where there is established staff and administrative procedures perfectly capable of dealing with the successful administration of these schemes.

Mr. Quinn

Is the Deputy signalling a formal change in Fianna Fáil policy in this regard?

Mr. Molloy

I am saying that if the Minister of State comes forward with proposals along those lines this side of the House will support him——

Mr. Quinn

That is interesting——

Mr. Molloy

I said earlier that we are not here to score minor political points. We are here to participate with the Government to help to introduce improvements to reform existing structures, to make the system operate better to the advantage of the community who are paying for these services and whose money should not be wasted on superficial supervision of schemes.

O'Connell Bridge House should be handed back to its owner — I think it is rented by the Department of the Environment — and many of its functions transferred to local authorities. In that way you would not have to rent one extra square footage of office space and would not require many additional staff. If you did a cost analysis on that programme there would be a huge saving. I know the Minister of State has an interest in the subject but there is no use in only expressing interest, he must do something about it. We on this side of the House are powerless to do anything about these things. We are urging the Minister to get on with the job and, if he does, we will be very receptive to positive reforms.

Mr. Quinn

I am glad to hear that.

Mr. Molloy

Is the Minister satisfied that relief of domestic rates under the 1978 Act was passed on to the tenants of private rented property from 1 January 1978 as provided for in the 1978 Act?

Mr. Quinn

I am not satisfied at all.

Mr. Molloy

In examining the terms of the 1978 Act and the debate which took place here when the Bill was being introduced I see that these matters were raised. I should like to know if, with hindsight, the practical operation of that provision could be made known so that we can see, some years on, whether the intention of the House was fulfilled.

Mr. Quinn

The fears expressed in Opposition have come home to roost.

Mr. Molloy

Deputy Quinn should not talk too loudly about what he said when in Opposition. If he cares to refer to the Official Report of the Dáil of 22 November 1978, Volume 309, column 1643, he will find that he asked that all water charges be abolished. The Minister of State today is supporting a Bill which not alone proposes to introduce water charges but extends them to all local authorities. The Bill is using the water charges as a device to replace the household rate, as a method for imposing major radical new taxation proposals to apply to householders and others in local authority areas. The Minister of State should be careful before he makes another gaffe.

I find it extraordinary that the Labour Party who are in charge of all Environment legislation, with the Leader of the party as the Minister in charge and another eminent member of the party, as the Minister of State, differ on this matter. The chairman of the Labour Party, Senator Michael D. Higgins, has stated that he is opposed to the introduction of the charges. Is there unanimity in the Labour Party about the introduction of these charges? Is the Minister of State about to challenge me as to whether Senator Higgins holds that view or not?

Mr. Quinn

I believe the Deputy.

An Leas-Cheann Comhairle

The Deputy is encouraging interruption.

Mr. Molloy

In The Connacht Tribune— the only source of truth in the news down my side of the world — of May 27, after referring to the introduction of a reduced level of charges it was stated that Senator Higgins was not at the meeting of the corporation because he was voting on the constitutional issue in the Seanad. That was a reasonable excuse for not being present from his point of view but the newspaper quoted Senator Higgins as saying:

I would oppose these charges were I at the meeting in full knowledge of the consequences.

Obviously, there is some difficulty in the Minister's party and he should not be seen to be wholeheartedly in favour of the terms of the Bill presented to the House. The Bill would benefit from some worthwhile amendments and become a useful instrument in strengthening local democracy, if local members were allowed to make the decision in regard to charges and if the charges were only to be introduced as a supplement to existing revenue sources. There is no point in abolishing one major source of existing revenue and then introducing the charges to replace it. That is not the way forward; it is not progressive.

The last Coalition Government decided to allow local authorities to increase their rate poundages by 15 per cent for 1982 and to provide £138 million as a grant in relief of rates. That provision was £12 million short of the amount necessary to fully recoup local authorities for the rate reliefs they were required to give. That Coalition Government were the first to leave local authorities short of the full amount of the rate reliefs. There was no legislative authority enabling them to do that at the time. The Bill under discussion is retrospectively legislating for that move. The Coalition Government lost a vote on the budget providing for that and in the following election Fianna Fáil were successful on a policy that they would make some major changes in a small number of the items in the budget which were causing difficulty. However, we had to carry on with the rest of the Coalition Estimate and that is why we implemented the matter concerning local authorities. As a result local authorities were left short and had to run up overdrafts. Their finances here have been getting into a tangle and that is why we should be together on this and supporting the introduction of charges to enable local authorities to work their way out of their financial difficulties by allowing them this increased revenue. However, these charges are not an increase in revenue; they are simply a replacement.

The position of my party is that we agree in principle that local authorities should have the power to charge for any services they provide, provided the revenue from such charges is used to supplement the existing revenue source of local authorities and provided the decisions to impose charges is a reserved function, a members' function. We also require that the adoption of a charges waiver scheme be a reserved function. Therefore, we will oppose section 9, unless it is suitably amended and we will introduce our own amendment making the introduction and levying of charges a reserved function. We will also introduce an amendment making the adoption of a waiver scheme a reserved function.

Mrs. A. Doyle

I am pleased to have an opportunity to speak on this Bill. In 1978, with the passing of the Local Government (Financial Provisions) Act it would appear to have been acknowledged by the House that county councillors could not be trusted. All parties in the House agreed with the main aims of the Bill in 1978 but under section 9, the section it is now proposed to amend, a long argument on various points of principle on the future of local democracy and the curtailment of powers of local councillors ensued. At the time we were in Opposition and many members of my party, and Labour Party colleagues, argued violently against certain sections of that Bill. I am disappointed that we now appear to have taken up where Fianna Fáil left off in 1978 and are going down the road we argued against at that time.

There is a lot of merit in the Bill before us, but one area that worries me is the principle of undermining the powers and functions of democratically elected members of local authorities. We have 1,500 councillors and we have taken yet again another step to turn them into rubber stamping robots. We have cries from all sectors to cut back on public expenditure and the man in the street points all the time to the various layers of bureaucracy, to red tape and the difficulty in getting answers or his rights. If we do this to our locally elected county councillors, if we curtail their basic right to raise their own revenue and decide how that revenue should be raised, how can we justify keeping them or justify the continued existence of local authorities as we know them?

I am extremely worried. I know why the Minister is doing this; he has to be sure these charges will accrue to the local authorities. It would appear he cannot trust the locally elected members to implement these charges and decide their various levels. In 1978 during the debate on this Bill the present Ceann Comhairle was one of the strongest opponents of the Bill and deplored the shackles imposed on the elected members in the exercise of their most important and basic function: fixing the level of local taxation. That is still the most important basic function of elected members of local authorities.

Section 9 of that Bill obliges the Minister to recoup local authorities the full amount lost to them by the derating of domestic dwellings. Nobody disagrees with the derating of domestic dwellings. Deputy Molloy suggested that we are reneging on our commitment to recoup domestic rates and suggested that this should not be done. We are not reneging on that commitment. Unfortunately, that commitment was not implemented in last year's Book of Estimates left to this Government by the Fianna Fáil Government of the day. Wexford County Council were left £134,000 short last year under the domestic rates relief grant. If it were law, how come all the local authorities were left short? We are putting on record what has been happening all along.

I object strongly to the general principle of the Bill which makes the raising of these local charges an executive function of managers and not a reserved function of elected members. The whole principle of local government appears to be at stake. The Bill appears to be largely a matter of convenience to ensure the collection of these charges. It does not accord with any general principle. It reserves to the manager exclusively the right to impose such charges as well as the amount to be paid in any one year. As these charges are not designed or intended to be a tax, there will be many problems. Can people decline to pay for them and refuse to use the council service? Consider garbage collection and the problems that could arise if this were so. Even if a garbage service is available in an area, can people opt not to pay for that service and dump their garbage anywhere they like? That is a horrific possibility. On the other hand, legally it would appear that a householder could not be obliged to pay for a service if he does not use it. If he must pay regardless of use, he is being taxed; but the tax will not be imposed by the councillors.

The phrase "taxation with representation" was mentioned. It is the basic premise of all taxation in this country. there should be no taxation of any kind, particularly in local government, if it is not directly controlled and mandated by the locally elected members.

Mr. Quinn

Disenfranchise a lot of farmers—

Mrs. A. Doyle

I take the point.

Mr. Quinn

This is particularly relevant to Wexford where they are nearly bankrupt.

Mrs. A. Doyle

Very true, but that has yet to be decided by the Supreme Court. I am extremely worried because there is no recourse by the councillors to the managers. I know there is great co-operation between managers and councillors in most, if not all, local authorities; but the principle is wrong. There is not even recourse to a section 4 in this case because we are talking about the general, not the specific. I am not a great believer in section 4 because I believe most problems which necessitate section 4 can be solved before they reach that stage if there are proper lines of communication. I have been a member of a local authority in County Wexford for ten years and I have only seen section 4 used twice. I would not like to see that power strengthened, but if councillors do not agree with the type of charges they have no recourse to a higher court.

I see these local levies as contractual charges but they are so related to the Estimates that they are really part of taxation. The councillors agree to strike a rate with built-in charges, yet we are going to let managers decide all the charges. The Minister is afraid that members would strike a rate but not approve of charges — with one eye on the ballot box this year — so he is taking this line. In my view we are opting out. We are encouraging a lack of responsibility and a lack of accountability. This is a short-sighted view. A continuous erosion of the power of local government will leave us with 1,500 rubber stamping robots soon to be deemed dispensible.

We will have a very difficult job justifying the existence of the local authority structure as we know it. We have a broken down British system of local government, without the legal framework of our European colleagues or the autonomy of the British system. I believe we should all be looking to our Constitution for the preservation of the autonomy of local government. The Belgians were the first to enshrine autonomy of local government in their Constitution. The new Spanish Constitution does likewise. It includes very strong clauses, but none of the older European Constitutions enshrines the autonomy of local government. We should get to work immediately and see what we can do before it is too late and this system of local government is deemed to be dispensible.

We must preserve and strengthen local government. It is the basis of democracy. I support the view that local government is the building stone of natural democracy, of our political party system. A strong healthy system of local democracy is the best answer to many of the problems which beset us today. If people had a forum to air their grievances, a forum where their views are represented and where there is direct accountability on a one-to-one basis between the local councillor and the constituents, we would not have so many people on our streets today shouting and usurping the normal democratic process. We must preserve local domacracy for the future of this country.

I support the view that local government is an expression of democratic natural rights. People have the right to say how they shall be governed. Nationally this right is bound to be of limited application, but local government multiplies the opportunities of participation and converts a notional right into something of a reality.

The United Nations Declaration of Human Rights, Article 21 says: "Everybody has the right to take part in the government of his country directly or through freely chosen elected representatives". A resolution of the Council of Europe, May 1969, says that the autonomy of a local community is the right of that community to manage under its own responsibility its own affairs with a freely elected assembly. The principle of direction is what we need in Ireland today.

I do not believe what the Minister is proposing will make much difference in practice. The way I would like to see it work is that the manager would recommend the rates of charges necessary to balance the local budget but the final decision should be left to the councillors. What the Minister mentions will not affect that in practice in most cases — I accept that argument — but the principle is wrong when it undermines the strength of local government and the functions and powers of the local councillor.

Local government, unfortunately, is neither local nor government. It is not uncommon when something costing a lot of money needs to be done in an area for the first thought to be to send a deputation to the relevant Minister for a grant. In this House the time of Members is spent increasingly solving local matters, whether by way of parliamentary question or other system. Why so? Because local authorities are becoming increasingly irrelevant — a great tragedy for democracy. The local budgetary process is the most important function reserved under the Management Act for exercise by elected members of local authorities, and we erode it at our peril. As Deputy Molloy has said, the basic premise of no taxation without representation still holds true and is very dear.

Firstly, I urge the Minister to consider the principle involved in this Bill of not leaving the discreation of levying these charges as a function of the councillors and to alter that part of the Bill. It is the essence of proper management of local government. If he cannot do so now, would he consider a two-year life span for this Bill? There would be less hurt if it were felt that it was not going to go on forever and be the path along which local government directed.

I know that a review of local government is about to be undertaken and that the Government are considering the matter seriously. I am confident that, at the end of the day, we will have a strengthended and more relevant system of local government. While that review is going on and before we Members of the House have the benefit of what might be in that review, would the Minister consider limiting the life of the Bill to, say, two years? The idea of these charges would have been accepted in areas where there is difficulty in accepting them now. Then we could hand over the function of striking and determining these charges back to where they should always be, in my book — with the locally elected members. We should not legislate for the irresponsible, for the council that do not want to take the responsibility of saying what charges should be levied locally and how they should be spent. Some councils are having difficulty in accepting this idea at the moment.

It is time that we accepted the premise of paying for services. We have always accepted the idea of paying for goods. There is here the peculiar notion that every service is free when it does not directly come out of our pockets. The much beleaguered taxpayer has always had to pay for these services through his or her tax contribution. We are now asking that the general tax and the general Exchequer be relieved somewhat and that anyone benefiting from these services be asked to pay a contribution towards them. That principle is very correct and all parties of this House stand over it.

I ask the Minister to reconsider his decision to make the striking of these charges an executive function of the county manager and not a reserved function of the councillors, as it should be. I consider section 9 of the Local Government (Financial Provisions) Act, 1978, which today we have before us to amend, an insult to councillors. Let us not add insult to injury. Let us see that the future of local government is in sound hands. Apart from this Bill, I await eagerly the outcome of the general reform and restructuring of local government.

Mr. Fitzsimons

I support my colleague, Deputy Molloy and Deputy Doyle gives some credence to what Deputy Molloy said earlier. The main purpose of the Bill is to confer a general discretion on local authorities to make charges for services which they provide to persons or in respect of premises. Two matters stick out a mile in this Bill. One is that the executive function being given to the county manager will make the county concillors, as Deputy Doyle has said, rubber stamps. The second thing is that this is clearly rates in by the back door once again. The Minister this morning declared that that is not so. He said:

While I am on the question of rates, I would like to refer to the various suggestions that the introduction of a wider range of charges for services is, in effect, a reintroduction of rates by the back door.

Clearly, that is what it is. We already have planning charges and Members on this side of the House know that they are justified to some extent. We are now bringing in water charges, sewerage charges, refuse collection charges, charges for chimney fires, for use of swimming pools and many other smaller charges. How are these charges to be collected? For instance, will the householder receive one bill annually for all these charges or a separate demand note for each charge annually? The administration will eat up any revenue which accrues.

In County Meath on a number of occasions last year there was no water in places like Ashbourne, Ratoath, Clonee — one could say from Clonee to the sea. All these areas depend on what is known as the East Meath regional water supply. Unfortunately, this happened on bank holiday weekends such as Whit and Easter. This lack of water resulted from the failure of the East Meath scheme. People may not mind paying for something they are getting but if they must pay for something they are not getting, that is altogether a different kettle of fish. Also, some people do not want their refuse collected. They prefer to bury it in their gardens or fields or use the public dump. If their refuse is not being collected, why should they be asked to pay for this service? At the moment, the only people in the rural areas who are rateable are the commercial people, small shopkeepers and industrialists. All these categories are going through a traumatic time endeavouring to survive. Yet, the Government propose to impose these extra charges on them at a time when they can ill afford them. These sectors are carrying the can as regards the raising of finance for local authorities. There is no doubt that they are being crucified.

This year, the Minister gave to the local authorities the power of putting no limit on the extent of the increase in local authority rates, whereas in recent years the Ministers have been endeavouring to control the rate, for example, last year by a ceiling of 15 per cent. Many county managers, as a result of this measure, have suggested to their councillors that the rate should be substantially increased from 15 per cent to whatever they could get. In Meath County Council, the county manager was looking for an increase of 17 per cent. The councillors knew that the people who were rateable, the small shopkeepers and other commercial and industrial people, were in extreme financial difficulties. We knew that to agree with the manager and increase the rate to such an extent would do harm to those people. We rejected the manager's suggestion and adopted the same increase as last year, which was 15 per cent. I do not know what will happen when people get bills for these services. They will not be popular with people who are already carrying the can.

The whole scheme will require extra administration. How will the local authorities get extra staff while there is an embargo on taking on extra staff in the public service? That has not been considered. Local authorities have been looking for permission from the Department of the Public Service to employ extra staff in some sectors, and especially in the area of planning. It has been very difficult to get agreement on that. The local authorities will need extra staff to administer this Bill when it is enacted. Central Government will say they will not allow more people to be employed in the public service. That problem will arise and will have to be dealt with.

As Deputy Molloy said, a fixed percentage of the national cake should be given to the local authorities. This would cut out a great deal of administration. Block grants should be given to the local authorities to enable them to provide services. Executive functions are being given to the managers. A circular sent to the local authorities was quoted by Deputy Molloy. It says that charges and functions assigned to local authorities under the Bill, as executive functions, will fall to be performed by the manager. The next sentence says that, in practice, the amount of revenue to be raised by charges will be determined by the estimates adopted by the elected members, and it will then fall to the manager to levy charges accordingly. There seems to me to be a contradiction there. On the one hand it states that the manager has the executive power, and on the other hand the councillors will still be responsible.

Mr. Quinn

There is no contradiction. The local authorities decide the total amount of money to be collected and the manager comes back with the details of the way in which that money will be collected.

Mr. Fitzsimons

It depends on the way you read it, and it depends on the way individual managers read it.

Mr. Quinn

That is the law.

Mr. Fitzsimons

We will see how it operates.

Mr. Quinn

If the Deputy had agreed to a 17 per cent increase in the commercial rate, the amount of money his manager would have had to raise would be less and, therefore, the individual charges would be less proportionately.

Mr. Fitzsimons

Possibly. We will see how it operates when it comes into action. As Deputy Doyle said, once again councillors are to be used as rubber stamps. They are being given the dirty jobs to do, for example, the selection of an area as a refuse dump. Everybody wants the refuse collected but nobody wants a dump beside him. The county councillors will have to decide where the refuse is to be dumped. They will have to make the nasty decisions. We were duped last week in the Finance Bill. Now we are being duped and "duked" and dumped once again. Councillors will react to this because they will not like it.

There are many matters for which local authorities should not be responsible. For instance, courthouses should be the responsibility of the Department of Justice. On the Boyne drainage, Meath County Council saved the Office of Public Works a considerable amount of money. That should not have fallen to be met by Meath County Council. Deputy Molloy mentioned various other matters. These should not be the problems of the local authorities. They should be the problems of the relevant Departments. I said this before on the Estimate for the Department of the Environment. Nothing seems to be done about it. Everybody agrees it is not fair that the local authorities should be responsible for problems which should be dealt with by the relevant Departments.

The Minister, Deputy Molloy and I are on the one wavelength about local authorities handling grants. New house grants, house improvements grants and group water scheme grants should be handled by the local authorities. Without being uncomplimentary to the people in O'Connell Bridge House — it has been extremely difficult for them to cope with all the new schemes and grants in recent years — may I say that time and again Deputies have complained about files being lost, and so on. This was raised at Question Time. Meath was used as a pilot scheme by the former Minister for Local Government, Mr. Tully.

Mr. Quinn

In more enlightened days.

Mr. Fitzsimons

The electorate did not say that at the next election, and they are the people who decide. Meath was used as a pilot scheme and it was working out quite well. Then the Department decided that the £1,000 new house grant would have to be handled by central Government. We would support the Minister in a decentralisation plan so that this type of grant and scheme would be dealt with by the local authorities, where the local engineer or inspector on the job, in contact with the local councillors, could deal with them more efficiently and at less cost. At the moment an inspector from the Department of the Environment could be living in Wicklow and have to travel to Meath to carry out inspections and back again. The whole thing is absolutely crazy. We agree on that and I am pleased about it.

Road tax is collected by the local authorities and sent in to the Exchequer. Would the Minister for Finance and the Minister for the Environment consider allowing the local authorities to retain the road tax collected? They could use the money and there would be no further administrative costs. This would cut out the problem of having to send the money to the Exchequer and having it sent back out again for the roads every year. It is worth looking at. The county councils, the association of municipal authorities and county managers' associations got very palsy-walsy in recent years about retaining their autonomy. I am aware, as Deputy Molloy said, that the county managers' associations and the Minister have met very frequently, more so than they ever did before. The Minister seems to have said to them: "I will give it all to you. You collect all the money down there". There is a new relationship between the county managers' associations and the Minister. They have been given this power and are delighted with it.

Deputy Molloy covered so much in his contribution that there is very little left for me to say. If the Minister makes a special charge of, say, £60 for water rates, how will the money be spent? In the UK, local authorities have been given powers in relation to law enforcement. The London Borough Council are responsible for looking after the London metropolitan police. That would be a big change if it was introduced here. We must look to other countries to see what powers local authorities have been given.

It was suggested some years ago that we abolish local authorities. It was suggested that urban councils should not function at all because they had little or no responsibility. As Deputy Molloy said, there are sections in the Bill we cannot support. We will be putting down amendments and I hope the Minister and the Minister of State will see the points we have raised and be prepared to concede our amendments.

Mr. R. Bruton

I welcome this Bill. It is a Bill which is capable of becoming a cornerstone in the revival of local democracy. It is an opportunity and a challenge for local politicians. For many years politicians from all parties have been supportive of the idea of charges as part of our system of controlling, managing and financing local services. We all agreed on the idea of charges for three reasons and my comments on the Bill are set in that context.

The first reason is that there is a clear awareness that the benefits of many of the services provided by the councils are privately enjoyed and do not have the social virtue of involving the people who enjoy them in having to pay for them directly, in other words the taxpayer's purse finances them. Any subsidies or waivers of the charges in relation to these services should be under the scrutiny of the local authority and decided on their merits and not be automatically there for users. The second attraction is that charges can give a new element of local autonomy in deciding priorities in different areas of spending. Local authorities should be able to raise extra money for specific services and so improve them. That is a very important element of local autonomy. The third reason is that charges must be seen as part of the decentralisation of control. They are an important tool in the efficient management of services.

It is well known that where services are entirely free there is a very high demand for them regardless of whether the value people derive from them justifies the cost involved for the council. I can see that charges could be a very efficient way of managing scarce resources. The prime attraction of charges is not the sole one of raising extra revenue. It is unfortunate that this side of these charges is getting undue attention from public comment. That is not their most important function. Having said that, anyone who is realistic about local finances since the demise of domestic and agricultural rates must recognise that the Minister has to put some form of limitation on Exchequer subventions that would be forthcoming.

In this Bill we see a reasonable response by the Government to the question of limiting central subventions and at the same time giving local autonomy. The Minister will give a block grant to local authorities, namely the domestic and agricultural rate grant. That will be available to them to spend as they choose. They will be in a position to do one of three things. The local authority can supplement their income from charges; they can supplement their income from increasing rates on commercial property or they can cut back on certain areas of spending. This kind of local discretion is important for local authorities. Since domestic rates were removed there was a restriction on the rating ability of local authorities. They were permitted only a certain percentage and it was not decided locally. They found they were unable to supplement their income from any source and were in the invidious position of having only the option of cutting back on services. That reduced real local autonomy and democracy.

This Bill is welcome in that it restores a much wider range of options for local authorities. While welcoming the restoration of discretion to local authorities, I cannot help but sound a very severe warning on the revenue-raising attitude that seems to pervade the Bill.

I note that the block grant to be provided is to be decided on the basis of central Government finances on a year by year basis. This year a certain percentage of the previous domestic rate and the previous agricultural rate product is being provided by central Government. In future when money is scarce central Government might find they must cut back. Essentially, the context in which these charges are coming in is very much by way of a shortfall to be made up by charges or by rates. Many local authorities are likely to regard this as being a recipe on the part of central Government for strangling their services by asking them to take up an increasing share of what was there previously and utilised at their discretion. Local authorities will fear that central Government will take the opportunity to shove down the line responsibility for cutbacks. I do not accept that view but I can see that there are certain elements in this Bill that will encourage such a view. I should like to see those elements changed.

The block grant should not be a simple flat amount to local authorities on the basis of their domestic and agricultural rates. Anyone who has discussed the idea of block grants in other countries has encouraged always that there be an element of matching in any system of block granting and that, if a local authority are willing to make a greater tax effort or a greater effort in raising charges, there should be some element of compensation to them by way of getting more money from the State. That would do a lot to turn around the criticism that I can visualise being levelled at this Bill. A matching element can allay the fears of local authorities in this regard and can give much more constructive ability to them to use their revenue-raising powers in a positive way.

The second point I should like to make is by way of a word of warning. While I welcome the fact that discretion is to be given back to local authorities on the question of charges and rating and deciding on expenditure priorities, this is partly being frustrated by the fact that the decision on charges will be an executive function. Not only will this take the charges out of the realm of democratic control—and that is disappointing—but it will reinforce the revenue-raising approach to the charges. Many managers will see the charges solely as a way of filling the gap between what resources they have and their existing gross outlays. If these charges are looked on solely in that way the potential for using them as an efficient way of managing resources in local authorities will be lost.

On the question of democratic control, the Minister of State has said that councillors will have the ultimate control in deciding on what is the aggregate to be raised in charges and that the manager will be the one to decide the structure of the charges to bring in the amount of revenue necessary. However, my experience from estimates meetings of the one council that I served on does not support the idea that this gives democratic control to the councillors. Time and again managers come in with estimates that would include an aggregate of so much revenue to be raised from charges. The councillors are put in the very difficult position of saying either they cut back on the level of charges in question or that they cut back on spending. There is no opportunity for the councillors to discuss the specific area at great length. It is always on a time-scale basis and the threat that if changes are made in the manager's estimates spending must be cut back has meant that time and again estimates meetings have not afforded councillors real democratic control. Perhaps this is their own fault in not having opted for special committees to discuss the estimates but we must take into account that this is the situation in many councils.

Mr. Fitzsimons

The county manager and the Deputy always agreed very much on those estimates.

Mr. R. Bruton

That was my experience on Meath County Council, though I strove to have some element of discussion on the estimates before we reached the gun-to-the-head situation. However, I never really succeeded in that.

I am very concerned also about what is happening in local authority chambers. Time and again they have become talk shops with the result that attention is devoted to all sorts of topics that are not germane to the authority of the councillors. If we are to rely solely on the estimates meetings we are encouraging a form of abdication of responsibility on the part of councillors.

In the setting of the structure of charges local representatives have an expertise that is second to none in deciding on what is the most appropriate structure. It is not acceptable that that decision be handed over to the manager once the councillors have decided an overall level. For example, questions relating to the benefit being derived from commercial users and of what the market will bear are ones that the councillors know more about than the manager. Again, the question of what is a fair charge and also of who should be exempt from charges is one better left to the councillors rather than to the managers.

Experience would suggest, too, that the councillors are the ones who will know the best way of setting charges that are efficient in using resources. In the area of refuse collection, for instance, a flat rate per house would not make for the most efficient use of resources. Councillors would recognise that a better system perhaps would be a charge per bag because there is no doubt that in many councils, particularly those encompassing built-up areas, the problem of the disposal of refuse is becoming increasingly difficult. Time and again councillors are faced with the unpopular decision as to where refuse is to be dumped. It would be a worthwhile development to have built into the charging system a clear incentive for people to cut down on the amount of refuse they leave out for collection. Councillors will be the ones who put forward imaginative-type charges, charges that produce the more efficient use of resources. The council chamber is the place for discussion of these issues.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.