asked the Minister for the Environment the guidance he has given, if any, to local authorities regarding alternative viable methods of funding to maintain essential services; the proposals, if any, he has to prohibit service charges; and the plans, if any, he has for the reintroduction of domestic rates on property tax.
Ceisteanna—Questions. Oral Answers. - Local Authority Services.
46.
The adoption of an annual estimate of expenses in respect of a local authority is the responsibility of the elected members of that authority. Accordingly, I have not given, nor do I see any need to provide, guidance along the lines specified.
An in-depth review of local government finances is being carried out by my Department in order to identify appropriate means of reforming the present financing system. The question of local service charges and other sources of finance for local authorities is being considered in the context of that review, but pending its conclusion and my consideration of the outcome, I have no proposals on these matters.
Does the Minister not recollect that prior to the last general election his party gave an undertaking to put in place an alternative and viable method of funding of local authorities? In that context will he explain why now — in the context of taking approximately £100 million out of the local authority funding area for next year — no guidance whatsoever has been given to local authorities as to how they should cope with that problem?
The Minister well remembers the undertakings given by the Fianna Fáil Party in that regard. On more than one occasion I stated that in the review that is taking place in so far as dealing with the funding of local authorities nationally is concerned that will be central to my consideration. At that time the necessary steps will be taken to comply with the commitments given by my party——
The Minister indicated to the House some minutes ago that he expected——
The Minister to reply.
It is also wrong for the Deputy to persist in talking about figures that are not accurate. The situation is that there is a reduction of 14 per cent in the rates support grant this year. That grant will be £225 million. That in effect is less than 3 per cent of the total revenue for local authorities, since the rate support grant represents about 20 per cent of their total. We are talking about less than 3 per cent of the total available to local authorities.
The cumulative effect of the reductions will be to take £100 million out of funding for local authorities, both current and capital, next year. How are local authorities to adopt estimates for next year by 16 November, as the Minister suggested, in the absence of any guidance from him and in the context of an ongoing review?
While I do not wish to be cross about the previous Minister's remarks, we believe that we have dealt with this matter in the best way this year by giving advance notice to the local authorities of the reductions in their support well in advance of their estimates meeting. They have the time to consider fully all the implications in consultation with their finance officers and the members of the local authorities can decide the level of services to be provided. It also gives them the opportunity to get full advantage of their own funding arrangements. This is a little different from the practice followed heretofore. Deputy Boland left office having made a reduction of 8 per cent in the rate support grant but he had not thought it worthwhile to advise the local authorities about the proposed cut. That is not the practice of this Minister or this Government. We have taken the initiative and that is the way to have the matter dealt with.
It is highly debatable so far as local authority members are concerned as to whether it is preferable to get a long term execution notice. The Minister might give some guidance even to members of his own party in the local authorities in relation to the Government's proposals on service charges. The bulk of local authorities, including those controlled by the Minister's party, have been operating service charges in violation of his party's undertaking in the local election campaign two years ago and his Government's undertaking in the general election campaign this year. Is it the Minister's intention that those councillors should adopt estimates which include service charges for 1988?
I would have thought it was abundantly clear that the Local Government (Financial Provisions) Act, 1983, No. 2 is in place and will continue in place. It is a reserved function and a matter for local authorities to decide whether to utilise it. They do not have to do so if they find they have sufficient funds to provide the level of service they regard as adequate for their communities. The whole question of the funding of local authorities is under review. When that is finalised the matter of service charges will be considered in toto.
In other words there will be service charges next year.
I want to deal with the last remaining question in Deputy Boland's name before proceeding to the Order of Business. I am sure the Deputy will facilitate me in that matter. Question No. 47.