Dáil Éireann debate -
Wednesday, 30 Apr 1997

Vol. 478 No. 5

Private Members' Business. - Local Government (Financial Provisions) Bill, 1997: Second Stage.

Minister for the Environment (Mr. Howlin)

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

One of my top priorities since appointment as Minister for the Environment in December 1994 has been the reform of local government. My background is in local government. I believe in local government and I know its potential. I see it as an important focus of local inspiration and development. I believe that local authorities are best positioned to identify and respond to local needs and priorities and to deliver local services to the community.

This Government also recognises the fundamental role which the local government sector has to play in aiding economic growth and in promoting social well-being and cohesion in society. As public representatives, we are all aware of the extent to which local government touches the day-to-day life of so many people. It is a fact that the local government sector has expanded significantly in recent years. It is now big business, having annual expenditure of £2 billion pounds and a staff of 30,000. But is it operating as efficiently and effectively as possible? Is it meeting the demands of its consumers?

While I believe in the strength and potential of the local government sector, I am equally aware of the problems and challenges which that sector has faced over the years. If effective action is not taken immediately to tackle the difficulties facing local authorities, the problems will continue and, in fact, multiply, resulting in serious consequences for the future of the local government system.

Before dealing with the specifics of the Bill, I take this opportunity to acknowledge the significant strides which the local government sector has already taken to make itself more efficient and customer oriented. Local government councillors, management and staff are working extremely hard to provide the public with the services they expect. However, we now need to build upon this hard work if local government is to meet the challenges of the next millennium. As I see it, local government has not been empowered in the past to develop to its full potential. However, this is now being tackled once and for all.

Last December, the Government launched a major new programme entitled Better Local Government — A Programme for Change. This document sets down a series of policy decisions for the reform of local government. It is the single most important local government reform measure in a long time. Its objective is to build a new local government which is stronger, sharper, more powerful and independent.

Central to this strategy is the provision of a proper system of funding for local authorities. If local authorities do not have the financial resources to meet the needs of their consumers, then all other reform initiatives, such as the enhancement of local democracy and the widening of participation, would be no more than a meaningless with list. Local government will not have any real meaning unless there is a direct financial relationship between a local authority and its electorate. An effective local government, capable of meeting the needs of its customers into the next century, must be provided with the financial wherewithal to do the job we set it. This is exactly what the Local Government (Financial Provisions) Bill, 1997 will achieve and I am proud to present it to the House.

The financial difficulties which local authorities have been facing in recent years are clearly evident.The level and quality of services provided by the authorities have been pared back to the bone and, in some cases, services have had to be discontinued. The decline in the authorities' fortunes is the result of a number of factors. First, their funding base has become too narrow, particularly since the abolition of domestic rates in 1978. As a result, there is a little buoyancy. This problem has been compounded by the fact that the authorities have been continually conferred with new functions, by successive Governments, without sufficient allowance being made for the additional pressure such functions place on their financial resources. Local authorities were also overly dependent on decisions of central Government for financial resources, never being sure exactly how much rate support grant they would receive from year to year. This could not be allowed to continue.

The Government recognised that immediate and direct action was required. In the programme, A Government of Renewal, we gave a commitment to commission a professional study on local government funding to see how we could introduce "a fair, equitable and reasonable system of funding". I engaged KPMG Management Consulting in 1995 to carry out this work, the focus of which was to set the agenda for change. The study involved extensive consultation with officials of my Department, the Department of Finance and representatives of local authorities. The consultants carried out an in-depth analysis of local authorities' existing and future funding requirements. They evaluated the capacity of the existing system to meet these requirements. A wide range of funding options was examined by the consultants, including a local property tax, a local income tax, a local sales tax, a poll tax, a system based on government grants, a system based on charges for services and a system based on assigning some existing taxation to local authorities.

All of the options examined contained certain advantages and disadvantages. The conclusion was drawn that there is no obviously correct way to fund local government. As Minister for the Environment, I was responsible for weighing up the pros and cons of the various options presented and, having regard to existing and future requirements, recommending the most suitable one to Government.

I am satisfied that the new arrangements announced in Better Local Government and spelt out in the legislation before the House will provide local authorities with their own viable source of finance to enable them to effectively carry out the range of functions demanded by consumers in a 21st century society. The Local Government (Financial Provisions) Bill, 1997, provides for a new system of funding for local authorities under which the power to levy domestic water and sewerage charges is being abolished, the rate support grant is being terminated and the income from these two sources is being replaced by assigning the proceeds of motor tax to local authorities, which will yield a more buoyant and larger amount of finance than the two abolished incomes.

In addition, the Bill provides for the introduction of important initiatives to ensure that the best possible use is made of the resources provided to local authorities and that a greater priority will be assigned to efficiency, effectiveness and economy.

Only a visitor from another planet could escape knowing how contentious the issue of service charges has been during the past decade. It has bedevilled all efforts to reform local government. With this Bill I am tackling this problem, once and for all. Section 12 will remove the power of local authorities to levy charges for the supply of water for domestic purposes and for the disposal of domestic sewage, with retrospective effect from 1 January 1997. In this context, a domestic supply of water means a supply for ordinary household purposes to a dwelling house or to a group water scheme. It does not mean a supply for commercial, agricultural, industrial or other purposes. However, lodgings or "digs" will continue to be regarded as domestic.

I wish to place on record my belief that the concept of charging for services is essentially a good thing. Charges can encourage efficient use of resources, promote conservation and be linked to environmental policy. However, a problem arises where the charge has no relation whatsoever to the amount of the service used. This has been the case in respect of charges for domestic water and sewerage services. The amount paid for a service should depend on the amount of the service actually used. This happens with other public utilities such as gas, telephones, etc. Charges for domestic water and sewerage facilities, on the other hand, were predominantly flat rate charges unrelated to usage. This flat charge practice created serious inequities in the system. For example, it is simply not fair that an individual living in a small one, or two-bedroomed house should have to pay the same amount as a family or a number of people living in a large five or six-bedroomed house. As charges for domestic water and sewerage services are therefore, in effect, taxes, it was the Government's view that they should be consolidated into general taxation. Under the new arrangements, no household, urban or rural, connected to a public water supply may be levied with a charge for a domestic water supply, with effect from 1 January last. Any charges levied before that date remain valid and, in fairness to all those who have already paid, I expect local authorities to pursue outstanding amounts with vigour and deal with all outstanding accounts due. This represents income that is legally collectable.

Charges will remain for commercial water and sewerage services as users can be charged according to the amount of the service which they actually use. Refuse charges will also remain as they can be readily related to usage. A number of local authorities operate a tag system under which a charge per bag is levied. Refuse charges are also an important tool in upholding the "polluter pays" principle which is an integral part of our waste management policy.

The rate support grant which my Department pays to local authorities is also being terminated with effect from 1 January this year. However, as an interim arrangement, this grant will continue to be paid until the Bill is enacted. The income from the rate support grant and domestic water and sewerage charges is being replaced by the assignment, under section 3, of the full proceeds of motor tax revenue to local authorities. This will give the authorities full and sole ownership of the entire proceeds of a single tax. It is a unique development which will ring fence a buoyant source of income for the benefit of local government.As a result, a direct financial relationship is being established between the authorities and their electorate. I wish to make one point perfectly clear. These proposals do not involve any new taxation but a change of arrangements in relation to an existing tax which, instead of being transferred to the Department of Finance, will be collected by local authorities.

There are a number of basic reasons for using motor tax to fund local government. Motor tax is an extremely buoyant source of income. KPMG identified a lack of buoyancy as one of the main weaknesses of the existing system. However, the proof is that between 1991 and 1995 the vehicle fleet increased by 14 per cent. In addition, 1996 was a bumper year for car sales and early indications are that 1997 will be just as good. This is simply an effect of Ireland's buoyant economy.

Miss Quill

It has been the case for the past 40 years.

Mr. Howlin

Those who lived through the dismal years when the Progressive Democrats were in Government would not agree that the economy was buoyant during their term of office. However, the economy is now buoyant and the proof is in the pudding.

Miss Quill

That is because we did the right thing.

Mr. Howlin

In the period that the Progressive Democrats exercised control over the finances of the State unemployment, the national debt and the tax burden increased. The Deputy cannot escape that simple fact.

Miss Quill

The Minister should stop reading Grimm's Fairy Tales.

Mr. Howlin

I will return to the measure before the House. Based on the 1996 Estimates, the income from motor tax for that year exceeded the combined income from domestic water and sewerage charges and the rate support grant by approximately £12 million. I am sure Deputies will agree it is only fair that local authorities should be able to share in the current economic boom, given that it is they who provide vehicle owners with essential road and traffic services.

The second reason for using motor tax income for this purpose is that it is a practical proposal, relatively simple to operate and another criterion set out in the KPMG report. Local authorities are already collecting the tax on behalf of the Exchequer, providing them not only with their own buoyant and locally-collected source of income but one which will be independent and fully protected by legislation, giving them great confidence and ability to plan and develop their services with the kind of financial stability they have sought for years.

One of the central and most innovative aspects of the new funding arrangements is the establishment of an equalisation system. Over the past 20 years local authorities were allocated an annual rate support grant on the basis of across-the-board incremental increases on their previous year's allocation irrespective of the relative needs and resources of each authority, something with which I am sure all parties in the House agree, irrespective of the efficiency and effectiveness of the local authority concerned. While in general all local authorities share the same pool of functions, each has a different pool of resources and a different range of expenditure requirements.

The amount of motor tax collected by different local authorities will vary from the income levels generated by the existing funding system of domestic water and sewerage charges and the rate support grant. In some cases, the differences in amounts may be quite significant, as some authorities have more vehicles registered and licensed with them than others, and not all local authorities collect motor tax. All these factors make it clear that a mechanism must be put in place to provide for a transfer of resources so that each and every local authority will benefit from the changes.

Section 4 provides for the establishment of a fund, to be known as the equalisation fund, which will be used to effect a transfer of resources. Section 5 specifies the manner in which the equalisation fund will be financed. Local authorities will be required to pay into the fund 20 per cent of the amount of tax collected on cars and motorcycles in addition to all other motor taxes, driver licences fees and other miscellaneous fees and duties. The retention rate of 80 per cent of motor tax income from cars and motorcycles was the optimum proportion to follow the guiding principle that local authorities should retain the maximum amounts possible of motor tax income collected by them. At the same time, I had to be conscious of the need to make sufficient resources available to the equalisation fund to make good the rate support grant and income from domestic water and sewerage charges fore-gone by all local authorities and to share equally the buoyancy built into this new system.

Section 6 sets out the purposes for which moneys may be paid out of the equalisation fund. These purposes may include contributions towards the expenditure of local authorities in performing their functions generally, payments in respect of any expenses incurred in promoting the delivery of quality and efficient local authority services and in respect of expenses incurred in connection with the collection of motor tax. In 1997 the resources of the fund will be disbursed among local authorities, in the first instance, to replace the income lost through the abolition of service charges and the rate support grant, the balance to be allocated as equitably as possible having regard to the needs and resources of each local authority. I reiterate that no local authority will lose out under the new system; in fact all local authorities will benefit. The size of the motor tax pool and its inbuilt buoyancy will be the guarantor of that. Section 6 also provides for the establishment of a committee, which may include local authority officials, to advise the Minister on payments to local authorities from the fund.

Initially the fund will be managed and controlled by the Minister for the Environment. As I indicated in replying to parliamentary questions, I see this as a short-term measure. In effect motor tax is now local authority money and, as such, local authorities should have a major say in how it is disbursed. To achieve this objective, section 7 provides for the establishment, by order, of a council, to be known as the Local Government (Equalisation) Council to manage the fund and decide allocation of payments from it, in addition to any other functions which may be allocated to this new council. It is my intention that the proposed Equalisation Council be established some time next year. This year we will allocate the money simply on the basis of ensuring that everybody is a winner but, in future, I want a mechanism, separate from the Departments of the Environment and Finance, whereby local authority officials, representatives of the General Council of County Councils and municipal authorities and management, make decisions about payments from the equalisation fund in accordance with need and merit and fund good initiatives within the overall local government system.

It is important for both the concept and practice of local democracy that local authorities should have a measure of discretion over their funding system to enable them to apply the income generated directly to the improvement of local facilities, such as the roads system. The ability to vary the rate of local tax, therefore, is essential if local authorities are to be empowered to respond to local circumstances, if they are to have real power to govern locally and, ultimately, be judged by the electorate on their stewardship. As a result, while the national rates of motor tax will continue to be set centrally, section 9 provides motor tax authorities with the power, from next year, to increase the national rates of taxation on cars and motorcycles by up to 6 per cent, subject to a maximum of 3 per cent next year. This 6 per cent is the limit to the increase above the national rate. In essence, it will be possible for local authorities to increase the rate by 3 per cent next year and the following year but, thereafter, no more unless the base national rate is moved by central government. This section also provides for consultation between county councils and urban district councils and between individual local authorities, where one collects on behalf of another on foot of an agreement, in relation to the extent of any variation in rates. The addition of a local variation element strikes a balance between the need to give a measure of autonomy to local authorities and the requirement not to impose any significant new forms of taxation.

Because motor tax authorities operate at county or city level only, there is a need to ensure that all local authorities enjoy the benefits of the new funding system and that the tax retained by the motor tax authorities — that is, tax not paid into the equalisation fund — is shared on an equitable basis among the boroughs, urban district councils and towns in their functional areas. Similarly, arrangements need to be put in place to ensure an equitable sharing where one county or city authority collects on behalf of another. These requirements are met in section 10 which provides for sharing retained motor tax between all authorities and empowers the Minister for the Environment, or as the case may be, the equalisation council, when established, to give directions to the motor tax authorities on how the tax should be shared. Thus, all authorities will have a legal right to their fair share of the proceeds. There will be a legal onus on motor tax authorities to apportion the income as lawfully directed.

Under section 11 local authorities will be permitted to deduct, in accordance with a relevant direction, the expenses incurred by them in collecting motor tax before paying residual sums into the equalisation fund and sharing the moneys collected among other local authorities.

The issue of local government funding is but one of a number of reform measures contained in "Better Local Government". Part of this strategy involves encouraging local authorities to improve the manner in which they operate. In particular, I want local authorities to have greater regard to the important principles of efficiency, effectiveness and economy, each and every day, in all their activities.

While it is essential that local government is provided with the resources it needs to do its job properly, it must also be seen to make the best use of those resources on a sound, business-like basis. Therefore, this Bill has a second major objective, which is putting in place a series of measures designed to ensure that local government realises the best return from this proposed new funding system.

In recent years there has been a whole new emphasis on effective use of resources; in particular, the value-for-money unit established in my Department in 1993 has undertaken a number of studies. Section 14 formally establishes the unit within my Department on a legal basis and provides for its role and functions. In keeping with the spirit of openness inherent in "Better Local Government", the unit will be required to publish full details of the results of its work. Section 15 provides that, in addition to the normal regulatory audits, from now on local authorities will be subject to value-for-money audits similar to those currently being carried out by the Comptroller and Auditor General.

The unit will undertake more comprehensive and in-depth analyses of a wider range of local authority activities than heretofore which will assist local authorities in using resources optimally in the delivery of their services and improving the manner in which they are managed generally.

Section 17 aims to address a serious anomaly in existing legislation which has continued since 1993 and which, in spite of an amendment in 1995 and action in the courts, has not been successfully rectified. I refer to section 20 of the Finance (No. 2) Act, 1992, under which liability for licensing and payment of motor tax arises from the date of registration of a vehicle in the State. A number of clear anomalous cases have arisen, where the vehicle was never on the road, yet the individual concerned, through no fault of theirs, paid arrears in addition to the cost of a tax disc. The amendment proposed in this Bill will ensure that motor tax is payable only when the vehicle is first used in a public place provided the individual, on or before the application for a road disc, produces evidence that the vehicle was not so used.

This Bill is an important one, well-thought out and comprehensive in its impact and intent. It will provide local authorities with a proper source of finance to enable them to properly undertake the range of functions for which they are responsible, and it will require them to make the best use possible of the new resource being made available to them. Resources and accountability go hand in hand if the taxpayer is to be confident the best return is being obtained from taxes. As a result of these measures, local authorities are being provided with a solid financial basis to enable them realise their true potential and meet the requirements of their customers as we approach the new millennium.

I commend the Bill to the House.

Mr. Dempsey

With regard to a question I raised on the Order of Business on 22 October 1996, regarding the classification of the film Michael Collins it has recently been brought to my attention that the question I asked might be construed as casting aspersions on the professional integrity of the film censor, Mr. Sheamus Smith and his office. I did not intend to cast any such aspersion.

The Minister has gone to great lengths to explain the significance and importance of this Bill. It is significant, not for the reasons the Minister has outlined, but because it represents a new low in policymaking and politics and because it is not underlined by any basic ideological or philosophical outlook. It is merely to enable the taxpayer to underwrite the cost of one Labour seat in Dublin in the next general election. At £60 million it is an expensive seat. For mere mortals like ourselves it is not just expensive, the price is astronomical. However, for the Labour Party no price is too high for the privilege of having one more Labour Deputy in the House following the next general election.

Mr. Howlin

That is unlikely.

Mr. Dempsey

What we have before us is another example of the Labour Party's penchant for the politics of perception, the political sleight of hand or the con job. Last December the Minister had a rush of blood to his head and decided to abolish water charges in urban areas. Subsequently, as events unfolded we see how little thought was given to that decision.

Mr. Howlin

I thought the Deputy supported that.

Mr. Dempsey

I never support half baked ideas.

Mr. Howlin

Will the Deputy reverse it?

Mr. Dempsey

Within weeks, members of group water schemes let the Minister know exactly how they felt about this matter. At the end of January he made a second attempt to resolve the problem with group water schemes but failed. On the third more recent attempt he managed to placate the members of group water schemes. While the federation of group water schemes has accepted the latest offer, it is clear what the Minister did and the way he approached the problem left a sour taste in the mouths of people in rural Ireland and one they will not easily forget.

In playing to a specific electorate the Government showed how completely out of touch it is with the ordinary people and the contempt in which it holds certain sections of the population. The silver lining in this cloud showed the electorate the danger of allowing left dominated Governments remain in place for a full five year period. It showed also the danger of allowing two parties, who represent a minority of the electorate, into a position where they control and dominate the Government.

In the past Fianna Fáil has been pejoratively described as a catch-all party. It is a broad based party which draws its support from right across the community, from all creeds and classes and all social strata. It would not have put itself or allowed anybody else to put it in a position where, by pandering to one section of the community, it deliberately treated another section unjustly. That is what happened in this case and the people know it.

The Minister tried to convey the impression that this package was carefully thought out but nothing could be further from the truth. I have already outlined the debacle he caused with group water schemes in rural areas which shows this proposal was not fully thought out. When I asked the Minister a month after he made his initial announcement, the basis on which he decided on the 80 per cent retention of motor taxation in each local authority area, he could not answer me. There was no carefully thought out reason for an 80 per cent to 20 per cent divide. When I asked a question about the basis on which the equalisation money would be distributed there was no definitive answer.

Mr. Howlin

That is not true.

Mr. Dempsey

There are still no definitive answers. It is clear from the Bill, as drafted, the Minister does not even know the questions yet. Section 2 (3) purports to give the Minister extraordinary powers to allow him make it up as he goes along. I am well used to seeing sections in Bills which allow the Minister to make regulations for the implementation of specific provisions in a Bill, but this is the first time in my experience a Minister has come into a House and sought carte blanche to introduce regulations for matters that are not specifically referred to in the Bill or for difficulties the Minister has not foreseen.

Mr. Howlin

It is in virtually every Bill, for example the Waste Act.

Mr. Dempsey

Imagine a section in a Bill which states:

If in any respect any difficulty arises in bringing any provision of this Act into operation or in relation to the operation of any such provision, the Minister may by regulations do anything which appears to him or her to be necessary or expedient for the purposes of removing that difficulty, for bringing that provision into operation, or for securing or facilitating its operation, and any such regulations may modify any provision of this Act or any other enactment so far as may be necessary or expedient for the purposes aforesaid but no regulations may be made under this subsection.

Is the Minister serious? Does he expect the House to give him carte blanche to change not only this Bill but other Acts of the Oireachtas because he has not thought out his proposals?

Mr. Howlin

I cited the three Bills introduced by Fianna Fáil Ministers with similar provisions.

Mr. Dempsey

It is unlawful and unconstitutional.

Mr. Howlin

That is appalling ignorance. What about section 52 (3) of the Local Government Act, 1991?

An Ceann Comhairle

We should hear the Deputy in possession without interruption.

Mr. Dempsey

The Minister requests us to give him a period of two years during which he can get this right. He must be joking. The people will not give him two years and we will not support that section of the Bill on Committee Stage.

The Bill and the Minister's announcement before Christmas will be costly. Motorists are already paying for his action by meeting the extra costs imposed on diesel and petrol in the budget. Motorists will pay £40 million extra to the Exchequer this year. Next year, if the Minister is still in office, motorists will undoubtedly pay at least another £8 million in road tax and even more in petrol and diesel increases. There is no escaping the fact that the Government in their half baked approach to this issue and in the solution put forward by the Minister to the problem he created will leave the taxpayer open to a potential liability of over £300 million in subvention payments and grants over the next decade.

The Minister put forward his proposal to use motor taxation as the source of funding for local authorities as a radical and innovative step which he claimed would put local government on a sound financial footing and allow for buoyancy of revenue. I do not agree. We have a basic objection to the principle which the Minister is trying to enshrine in legislation. It is wrong in principle to ask any sector of the public to finance the provision of general local government services for the entire community. Local government should not be towed behind the family car as proposed.

The proposal will be a major cause of dissension in years to come. Motorists paying road tax will demand and expect decent roads on which to travel. If they do not get them, they will use the road tax to vent their anger. It is clear this method of raising revenue to fund local authorities is discriminatory and inequitable. For instance, a family of five with no car utilising many local authority services will contribute nothing to local government under this method of funding. A couple living in the country who need two cars but utilise fewer services will pay a substantial amount of money to local authorities. Is it fair that car owners should subsidise non car owners?

In addition, the Bill will allow the Minister to vary the amounts of money paid into the equalisation fund. He or she, therefore, retains control of the amounts of money available to local authorities under section 5. Despite declarations of freedom and buoyancy, the central Government stranglehold continues. The proposals contained in the Bill will not resolve the crisis in local government. They do not address the basic weakness in local government financing which is the complete lack of discretion for local authorities in deciding on their spending priorities. That goes to the heart of the malaise in local government. It means that there is no incentive for members to ensure value for money is obtained by and for the taxpayer. Local people cannot decide on their spending priorities and local government, which should address local needs and aspirations, very often is seen as unresponsive and uncaring.

What is proposed is simply a handy shift of an administrative nature — the rates support grant and water charges are replaced by motor taxation.The Minister referred to the financial benefit for local authorities this year because of the increase in the number of cars on the road. If the Minister is using the figures set out in the 1996 Estimates, it appears that they will benefit substantially.

Mr. Howlin

This year will be even better.

Mr. Dempsey

However, if the figures for output at the end of 1996 or the estimates drawn up by local authorities to provide basic services for the beginning of 1997 are examined, they will not. The evidence so far indicates that they are suffering serious financial difficulties. A number of local authorities have suffered an income loss of up to 50 per cent in the first three or four months of this year because the Minister's grant has not compensated them.

I pointed out to the Minister during Question Time that most local authorities collected up to 65 per cent of their water charges in the first three or four months of the year by means of incentives.They are now being penalised. Recently, he sent out a questionnaire to them inquiring about their financial position at the end of the first quarter. I have seen the questionnaire and it is a classic example of "if you ask the right questions, you will get the right answers". I am sure he will be able to tell me how wonderfully well the local authorities are doing.

Mr. Howlin

I am sure I will.

Mr. Dempsey

The cash flow of a number of local authorities has dried up. They are operating on overdraft or are dipping into capital moneys to stave off financial disaster. This was not addressed in the questionnaire. We are cooperating with the passage of the Bill because of this problem which has been created for local government. Local authorities should not suffer because of the folly of the Government and if the Bill is not enacted, though it is badly flawed, they will suffer.

The greatest con job is addressed in the explanatory memorandum, not in the Bill. The Minister announced in December that he proposes to allow local authorities to levy charges for projects not funded under existing funding arrangements. The reason this proposal is not contained in the Bill is that we are too close to a general election. This is a fancy way of telling us that he intends to allow local authorities to resume levying charges following a general election or early in 1998.

Mr. Howlin

Has the Deputy not read the Lacey Commission report? This is awful stuff.

Mr. Dempsey

It is difficult for the Minister to accept that some of us can see through the con job he is trying to perpetrate.

Mr. Howlin

That is unworthy of the Deputy, I expect more from him. The Lacey Commission was established by a Fianna Fáil colleague.

Mr. Dempsey

The Minister is trying to pull the wool——

Mr. Howlin

The Deputy will support the Bill in a minute, he cannot have it each way.

Mr. Dempsey

I am saying that the Minister was afraid to include this proposal in the Bill but that it is his intention, if returned to office, to come into the House in January 1998 with a Local Government (Financial Provisions) Bill to allow local authorities to once more levy charges.

Mr. Howlin

For joint projects, it is explained in detail in our document.

Mr. Dempsey

Taken in conjunction with sections 3 and 9 of the Bill which give the Minister power to control the amounts of motor taxation retained, it is clear what will happen in years to come. In future when a Minister needs money he or she will reduce the amounts of motor taxation retained and tell local authorities to raise finance by way of local charges. No one should be under any illusions, this proposal allows for their reintroduction. In 1983, when Minister for Local Government, the Tánaiste, Deputy Spring, amended the Act introduced by Fianna Fáil in 1978 which allowed for the introduction of a rate support grant and placed an onus on local authorities to raise finance by way of local charges. That is what the Minister proposes to do.

Mr. Howlin

I thought the Deputy said the proposal was not contained in the Bill.

Mr. Dempsey

There are a number of important differences. Charges will not be levied on those availing of water and sewerage services only but on all households, perhaps on each person in a household. From the way it is described in the explanatory memorandum, it sounds very much like a community charge. It is known in the United Kingdom as a poll tax. I warn the electorate that that is at the back of the proposed changes. That is the depth of his commitment to abolishing charges.

Mr. Howlin

This is painful.

Mr. Dempsey

Another aspect of local authority financing which must be addressed and is totally ignored in the Bill is the abuse of local government by central Government Departments.This takes the form of imposing legal obligations on local government through laws or regulations without providing the necessary finance to enable local authorities to carry out particular functions. The biggest offenders are the Departments of Agriculture, Food and Forestry; Justice; Social Welfare and Education.

Local Government should be seen and used occasionally as an arm of central Government. It should not be used, however, as a means of avoiding the full costs of the policies of central Government.All services provided by local government for central Government on an agency basis should be fully paid for by the relevant Departments promptly. Reductions in rent and other charges granted on grounds of social hardship by local authorities should be reimbursed fully by the Department of Social Welfare or the Department of Health.

The one aspect of the Bill which I welcome unreservedly is the introduction of value for money audits. I hope the Minister intends to ensure they are published and made available to the public. It is vital this is done as the public has a right to know how well or badly its money is spent in comparison to other local authorities. There is nothing wrong with the principle of publishing a league table showing how efficient various local authorities are. It is only when this is done that we will begin to get value for money. I hope audits will be conducted independently and provide all the facts and figures.

On local government reform about which the Minister has spoken much during the past few years, the document Better Local Government — the purple book as the Minister refers to it — is useful as a basis for significantly advancing the cause of local government. The Bill should give a clear indication that central Government is at last relinquishing its stranglehold on local government.Sadly, it fails to do so. Local Government and local democracy are not advanced one whit by the Bill. It is a wasted opportunity. Local government and local democracy will benefit significantly, however, within a few months following the return of Fianna Fáil to Government.

Miss Quill

The history of the funding of local authorities has been a sad one riven by political cynicism. We have before us, on the eve of the 1997 general election, badly thought out legislation.It is a blatant example of "vote now, pay later" politics.

I support the principle that taxes paid locally should be retained locally. That principle gives the Bill some merit. My party and I have long advocated that motor taxation should be retained locally and spent at local level. It was always our intention, however, that a proportion of these moneys would go directly towards improving road quality and road safety. We felt that was the least that should be done to ensure an element of fair play for motorists.

Irish motorists are the most highly taxed and poorly served motorists in Europe. They pay in excess of £2 billion annually for the privilege of driving on some of Europe's worst roads. I refer in particular to county roads. Bord Fáilte's research shows that poor road surfaces and sign-posting are key areas when holiday makers express dissatisfaction with their holiday in Ireland. American tourists, many of whom choose not to revisit Ireland, make a point of highlighting their dissatisfaction with the poor quality of our roads, directional signs and road safety signs. If these are bad for tourists they are equally bad for us.

More than 450 people are killed on the roads every year. This ought to be a cause of serious national concern, yet the Government has taken no effective action to tackle the problem. It has been established that the upgrading of road safety mechanisms and the effective enforcement of speed limits bring about a major reduction in the death toll on roads. For example, it has been demonstrated in Britain that a significant upgrading of road markings and signs results in a dramatic reduction in the number of road accidents and deaths.

My party has argued for some time that a percentage of the money collected by way of road tax ought to be spent on the rigorous enforcement of speed limits and the upgrading of road safety measures. A reduction in the number of accidents would lead to a consequent reduction in insurance costs for motorists. The most important aspect in all this is the human cost in terms of lives lost and the grief suffered by families as a result of the slaughter on roads. While one cannot quantify this, it cannot be ignored.

I read in one of today's newspapers that the NRA estimates that outstanding and unpaid road tax amounts to £7.4 million. It would pay the Government to deploy a full time Garda squad on the enforcement of speed limits, the promotion of road safety and the apprehension of motorists who have not paid their tax. This is the least we should do. A percentage of the funding collected by way of road tax ought to be used for this very good and essential purpose. The Minister referred to the cost of services. If a percentage of the money collected by way of road tax was used to improve road safety and road surfaces this would support the principle enunciated by the Minister but which he does not seem to want to put into practice.

The consequences of the legislation for motorists are very real. The cost of road tax is set to increase by 3 per cent next year and by 6 per cent thereafter. However, the consequences for the environment could be much more serious. The Minister referred to buoyancy in the coming years. Clearly his plan is for more cars, more traffic, more congestion, more gridlock and more pollution. This is a reckless position for a politician charged with responsibility for environmental protection. Last week the Minister published a fine document on sustainable development. However, the gap between the proposals in that report and the action proposed in the Bill is very wide.

Mr. Howlin

There is life outside the cities.

Miss Quill

Yes, but there is much life within cities. Enlightened city management would seek to encourage the public to switch from the use of private cars to public transport.

Mr. Howlin

There is also a world outside the cities.

Miss Quill

Is the Minister saying that cities and their environment are of no concern to him?

Mr. Howlin

All areas cannot have a public transport service. We have a dispersed rural population.

An Leas-Cheann Comhairle

Deputy Quill without interruption, please.

Mr. Howlin

Is the Deputy proposing that we should deprive people of cars?

Miss Quill

The Minister for the Environment is hanging himself with his own words.

Mr. Howlin

The Deputy hanged herself on the issue of water charges.

Miss Quill

The Minister is clearly not concerned about the increased level of pollution which will result if his aspirations for this buoyancy——

Mr. Howlin

Is the Deputy's solution to ban cars?

Miss Quill

I said that all right minded——

Mr. Howlin

The Progressive Democrats Party is capable of anything. Nothing would surprise me.

An Leas-Cheann Comhairle

The Deputy in possession without further interruption.

Miss Quill

The Minister can seek to interrupt me and misinterpret what I say but he will not prevent me from telling him some home truths.

Mr. Howlin

I would not dream of it.

Miss Quill

He has proven himself to be a phoney Minister for the Environment.

Mr. Howlin

I would mind my seat if I were the Deputy.

Miss Quill

The Minister has marked himself out as a man of fine words and foul deeds.

Mr. Howlin

The Deputy has sunk her canoe in the water.

Miss Quill

The Minister should not provoke me into telling him any more home truths. He is clearly hoping there will be more buoyancy, more pollution, more gridlock and more congestion.

Mr. Howlin

Will we install meters?

Miss Quill

If the Minister wants to discuss the issue of water I will do so.

Mr. Howlin

The Deputy is already in hot water.

Miss Quill

The Minister will find himself in very hot water when emissaries arrive from the Commission next week. I am fully aware of what is being planned.

Mr. Howlin

If I were in Cork North-Central I would be concerned.

Miss Quill

I have won a seat in Cork North-Central in three consecutive elections and it is my aim to retain my seat in the forthcoming election. I take this business seriously and I ask the Minister to listen to the remainder of my contribution.

An Leas-Cheann Comhairle

That will be the case, Deputy.

Miss Quill

The decision to give all households treated water in unlimited quantities free of charge for all time is an act of gross environmental vandalism. Water is an expensive and priceless resource which needs to be valued, protected and conserved into the next generation. It costs large sums of money to abstract raw water, treat it, pipe it and deliver it to all households. It also costs money to treat the waste water which exists from households after use. These costs are set to increase substantially in the coming years.

EU directives are already compelling us to clean up our act. We cannot continue to run raw sewage into our rivers, lakes, bays and harbours. We will be required by Europe to put in place a number of expensive waste water treatment plants. These plants cost much money. The energy and expert labour costs are high and the chemicals are expensive. Ireland needs substantial EU funding in the coming years to enable it to meet these costs.

The Minister's action on water charges has put further EU funding at grave risk. The entire thrust of European environmental policy for water management is clear. The EU favours charges for water in order to conserve supplies. The decision by the Irish Government last December to abolish water charges sets Ireland on a totally different course from the rest of the EU and puts us in direct conflict with the thrust of European policy in this area.

Water is a scarce resource. The conservation of water ought to be the cornerstone of Government policy, particularly the policy as enunciated by the Department of the Environment.

Mr. Howlin

As it is.

Miss Quill

Economic growth and industrial expansion mean the demand for water will grow rapidly in the years immediately ahead. In the greater Dublin area, there is a real danger that demand could outstrip supply unless conservation measures are taken. The water problem in Dublin is now very serious. Forty per cent of Dublin's supply is lost before it reaches the taps due to leaking pipes. Supply problems mean that householders in Dublin county and Kildare are now experiencing severe loss of pressure in their water supplies. Could anybody argue that in such circumstances water should be made available free of charge in unlimited quantities to every household?

The Government's decision to abolish water charges is an act of gross irresponsibility in both environmental and economic terms. The expert advice available to the Minister for the Environment is that water cannot be supplied free. The decision to abolish water charges will be a costly exercise for taxpayers in the years ahead. Statements by the Minister for the Environment indicate that over the next ten years the cost will be approximately £1 billion. This includes the special measures for those on rural water schemes.

Mr. Howlin

Bobby's people. Remember the £23 million?

An Leas-Cheann Comhairle

No interruptions, please.

Miss Quill

There are also infrastructural costs to be taken into account. It is estimated we will need to spend more than £1 billion on upgrading water and sewerage infrastructure in the next ten years. A costless water policy in this country will inevitably see Ireland losing millions of EU funds for water and sewage treatment projects.

The current system of water charges, introduced by the leader of the Minister's party, Deputy Spring——

Mr. Howlin

The Tánaiste.

Miss Quill

——the Tánaiste, did not command public support because it was unfair on several grounds and aroused widespread public resentment.The charges were not related to the amount of water consumed, so they had no conservation or environmental effect. The level of charge differed greatly from one county to another. Families living on different sides of the same road paid a different rate. Some local authorities decided not to levy any charge, specifically Dublin. The system put in place by another Labour Minister was grossly unfair, badly thought out and in need of radical reform.

The correct course of action for this Minister would have been to replace the outgoing charges with a system that was fair and based on conservation principles. The idea of paying for water out of car tax is totally unsustainable. European Union environmental policy will push this country inevitably towards the introduction of water metering over the next ten years. Accordingly, instead of abolishing water charges, this Minister should have begun to prepare this country for a new system to enable it to implement an EU directive on water policy between the years 2001 and 2010.

The Progressive Democrats favour metered usage, with each home fitted with water meters; making a basic water allowance for each household which would be free of charge; a rate of tariff on usage above that basic allowance; and a waiver system for those not in a position to pay. This kind of charging system would be designed to encourage conservation and discourage wasteful usage. It would also have to be made transparently clear that moneys raised from water charges should be used exclusively to fund the running costs of the system and to pay for improvements in quality and customer service. The Progressive Democrats do not favour a reintroduction of the old, discredited service charge system.

Mr. Howlin

Fair play. That is mark 5 position.

Miss Quill

Meters are already installed in houses that are 100 per cent funded by the Minister's Department in public estates in Bray, Longford town and elsewhere. A programme of metering local authority houses is well under way under the direction of this rainbow coalition Government.That cannot be denied.

The cost of installing a water meter in a new house is approximately £50. We estimate that the overall cost of metering all households connected to the main supply, approximately 750,000, could cost approximately £75 million over ten years.

Mr. Howlin

The Deputy knows better than KPNG. Has she studied it professionally?

Miss Quill

I want to refer to water quality. Expert evidence is now available which confirms that the quality of Ireland's drinking water is deteriorating. Last summer, the public water supply in Roundstone was found to be contaminated and had to be taken out of commission for a number of weeks. Roundstone is a key tourist resort. At the same time, the town of Nenagh had its water supply disrupted due to industrial pollution.The most recent study carried out by the Environmental Protection Agency indicated that almost 30 per cent of Irish rivers are either slightly or moderately polluted. Approximately 50 miles of waterway is seriously polluted and this is only the thin end of the wedge. Matters are set to worsen unless Ireland decides to adopt the EU draft directive on water policy. Signing up to that directive could mean we will continue to qualify for further significant allocations of EU funding to enable us to finance improvements in our water quality and in our water and sewerage infrastructure in the next ten years. It must be recognised that it is in Ireland's interest, in environmental and economic terms, to adopt the terms of the EU draft directive on water policy.

The Progressive Democrats are committed to a systematic policy of water management and conservation.We owe it to the next generation to pass on clean water for drinking, recreational and amenity purposes and history will condemn us if we are too politically cowardly to take the necessary steps now to ensure that happens.

There are a number of elements in this Bill that my party and I will seek to amend significantly on Committee Stage. However, there is a section to which I can give my total support. That is the one that requires local authorities to institute a value-for-money audit system. Local authorities have been allowed to run down for many years. The net result has been that the public estimation of local authorities and the standard and quality of the services they give is not always high. It is important, in the context of even this feeble attempt to put some funding in place for local authorities, that we should seek to put in place value-for-money audits which would be independently verified. We have a critical public, and they need to be reassured they are getting value for money. As well as being critical, the public are fair-minded and are prepared to pay if it can be demonstrated that they get value in return for the money they have paid.

The quality of local government services has gone down in recent times. In my city the quality of the footpaths of the city streets, has gone down. The level of cleansing and sweeping is not as good as it ought to be, and there is no money to properly service existing litter bins or to provide new ones. This has put local authorities in the position where they do not stand high in the public estimation. It is important, therefore, to put a number of fundamental changes in place as quickly as possible.

One of the first things local authorities have to do is to change their culture in regard to customer services. Central Government Departments are often more accessible than some departments in local authorities and that should not be the case. Local government should be close to its people, responsive to their needs and its service should be customer friendly. Every local authority should be required to adopt some kind of quality make or an ISO 9002 in respect of all its operations.Wexford County Council has adopted that practice in respect of one element of its operations, and that is to its credit. If it can be done in Wexford, it can be done elsewhere. If that were done the general public would be willing to pay more for local services, particularly if the charge was related to the cost and value of the service. The quality of the local services we get very much determine our quality of life. If our streets are clean and fresh, if our parks are well tended, if our library shelves are stocked, if there is a good public lighting system and the footpaths we walk on are safe and in good repair, we live in a good environment and the quality of our life is good. If the situation happens to be the opposite, as it so often is, we are living in a poor environment and are sour about paying because we see no great return for what we pay. I support the section of the Bill wherein it is sought to address these matters. It is a step in the right direction.

I support the principle of taxes raised locally being spent locally. I also support the principle of putting in place a dedicated sum, clearly defined and ring-fenced, to enable local authorities to fund their functions. However, there are a number of elements of this Bill that I find fundamentally unacceptable and which I will seek to change by way of amendment on Committee Stage.

Dr. O'Hanlon

I agree with my colleague, Deputy Dempsey, about the political expediency of the manner in which the Minister dealt with the abolition of water charges. As Deputy Dempsey said, this was an effort by the Labour Party to try to reduce the number of seats they will lose in the next election. It is fair to ask whether water charges would have been abolished if there had not been a by-election in Dublin West. The answer is very definitely "no". On 19 December, in a knee-jerk reaction and without prior consultation with the European Commission, the Minister made a very badly thought out decision. It surprised me to be told in answer to a question that neither the Minister nor his officials had consulted the European Commission before he took this decision.

Mr. Howlin

That is right. We are a sovereign State.

Dr. O'Hanlon

In a statement regarding a major overhaul of local government and its financing, the Minister announced the abolition of water charges and did not refer to the 150,000 households that depend on group water schemes for their supply. The only desirable effect of the decision and the manner in which the Minister made it was that it created the National Federation on Group Water Schemes. This is advantageous because the Minister and the two left-wing parties in Government do not appreciate the contribution of rural communities in providing water for themselves and in making a major contribution to the economic and social life of rural Ireland. In future the federation, in partnership with the Government and the local authorities will have a worthwhile contribution to make in upgrading group water schemes and improving the quality of water and bringing it up to European Union standard.

The Minister met the federation but, although on two occasions he tried to dig himself out of the hole he had created for himself, he still did not satisfy the federation on at least one point. That was in relation to the question of leaving the responsibility for administering group water schemes with the Department of the Environment in Ballina. There is no more user friendly section in any Department than the small water and sewerage schemes section of the Department in Ballina. Although I favour devolution to local authorities, I agree with the federation that the administration of this service should be left in Ballina. The four officials who administer the scheme there do an excellent job. My information from my constituents who are involved in group water schemes is that they are extremely happy with the service provided. On the question of giving that responsibility to the local authorities I would ask the Minister to consult the local authorities to find out whether they want that task? Has he provided funding for the local authorities to carry it out? The Minister may mention the £10 million being provided, but he should know that £15 million would not solve the problem of either of the two counties in my constituency, not to mention the rest of the country.

Mr. Howlin

It is four times what the Deputy gave when he was Minister.

Dr. O'Hanlon

That may be so, but it was the Minister who introduced these changes. Not alone do the local authorities not have funding, they will not have the staff. How are they to staff this operation?

The National Federation of Group Water Schemes has two legitimate concerns about the administration of its schemes being handed over to the local authorities. One is that local authorities will be in a position to charge farmers whatever they like for a supply of water. Farmers who receive their water supply through group water schemes could have their rates doubled, trebled or quadrupled to provide funding for local authorities for other purposes. The Minister introduced controls in respect of car tax, but failed to introduce any in respect of what local authorities may charge farmers in a group water scheme for the supply of water. The leader of the other left wing party dominating this Government, the Minister for Social Welfare, Deputy De Rossa, has made it known on many occasions that he does not like the farmers. He suggested on one occasion that they wanted a free water supply, when nothing could be further from the truth. On another occasion he suggested on national radio that farmers were "rolling in it". He does not care what local authorities charge farmers for water.

Those involved in group water schemes are concerned that local authorities will be in a position to limit the amount of water used. We spoke on many occasions about the serious consequences of the Minister's decision. He made two attempts to get out of the difficulty, but the rural community is still not satisfied. In keeping with the left wing philosophy, the Tánaiste spoke for an hour recently on national television without referring to agriculture and even though people in rural areas were not pleased, they were not surprised.

Deputy Dempsey referred to section 2 and I am pleased he read it into the record. That section gives the Minister power to drive a coach and four through the legislation. While I do not agree with its inclusion in the Bill, I compliment those who decided it should be included. I do not know if it was a colleague in Cabinet or an official who noted the way the Minister handled his decision to abolish water charges and decided he would need the power of such a section to correct the errors he would make.

Mr. Howlin

The rural community is happy.

Dr. O'Hanlon

The use of car tax by local authorities to subsidise water and sewerage charges is like a three card trick. The Minister stated that local government will not have real meaning unless there is a direct financial relationship between a local authority and its electorate. He went on to state the financial difficulties local authorities have faced in recent years are evident. What has the Minister done to improve the financial position of local authorities?

Mr. Howlin

They will receive approximately £30 million.

Dr. O'Hanlon

They have not been allocated one extra penny extra as a result of the decision to transfer car tax to them, and the Minister will keep a tight rein on that money under the equalisation fund he proposes to establish. If he had said that for too long road tax has been paid into the Exchequer and should now be used by local authorities to improve county roads, I would have complimented him.

Mr. Howlin

We are giving them money for county roads.

Dr. O'Hanlon

The Minister should come down to my constituency and examine the roads. As a car is a necessity for motorists in rural areas, it is unacceptable that they should have to fund the abolition of water charges in towns as well as pay for their own water supply.

While the Minister may have clarified the position in regard to the power local authorities will have to raise the motor tax rate, there was a great deal of ambiguity in his statement of 19 December. He stated that in 1997 domestic water and service charges would be abolished, motor tax would be assigned to local authorities, with no increase in motor tax rates, and the rate support grant would be phased out. He also stated that in 1998 local authorities will have discretion to vary the national motor tax rate by not more than 3 per cent and in 1999 and subsequent years they will have discretion to vary it by not more than 6 per cent. Many people perceived that to mean——

Mr. Howlin

I explained what it meant.

Dr. O'Hanlon

——that in 1999 and subsequent years local authorities will have discretion to vary the national rate each year by up to 6 per cent. The Minister saw the error of his ways and made a U-turn.

Mr. Howlin

I explained the matter at the time, but it did not suit the Deputy to listen.

Dr. O'Hanlon

The Minister referred to the buoyancy in the economy, but forgot to mention it is the result of tough decisions taken by the Government in 1987 and subsequent years and the Programme for National Recovery agreed between the Government and the social partners.

Mr. Howlin

We try not to remember the misery period.

Dr. O'Hanlon

At that time tough decisions were taken in the national interest and the Minister and his colleagues in Government are now reaping the rewards when there is buoyancy in the economy.

In reply to Deputy Quill's remarks, the Minister talked about the tax burden when Fianna Fáil and the Progressive Democrats were in Government.From 1989 to 1992 the high rate of income tax decreased from 52p to 48p and the lower rate decreased from 35p to 28p. In the three budgets the Minister's colleague introduced on behalf of a Government dominated by two left wing parties, the lower rate of income tax was reduced by one penny. The Minister should compare the two three year periods. There were reductions of 4p and 7p in the higher and lower rates, respectively, in a three year period when we were in Government compared with a reduction of one penny in the three years the Government has been in power. The Minister failed to mention that the tax burden has increased during this Government's term in office.

The Minister might elaborate on the section of the Bill which gives discretion to local authorities to raise a local development contribution. Will he state if that will be a reserve function of councillors or whether, as a Labour predecessor of his did, he will give the authority to a county manager overriding the power of local authority members? Who will have the discretion in that regard? Will he elaborate on where he considers this local authority funding will be raised?

Mr. N. Ahern

It is appropriate this Government is abolishing water rates when a Fine Gael-Labour Government introduced them in 1982 or 1983.

Mr. Howlin

The Deputy's party promised to abolish them for 15 years.

Mr. N. Ahern

I will come to that in a minute. It is appropriate that the Government is abolishing them, although it does not seem to know what it is doing, given that this is the second Bill it introduced on this matter in the past two and a half years. All the talk of a cohesive Government that knows what it is doing does not seem to hold true in this case. This decision was prompted by the Dublin West by-election. Labour Party people seemed to be terrified by Councillor Joe Higgins. I have not attended Labour Party back room meetings, but when I talked to any of the Minister's colleagues I found them to be irrational about that man. It is obviously worth the £60 million, which Deputy Dempsey said this measure will cost, for the Minister not to see the ghost of that man lurking around this House.

I am a member of Dublin Corporation which abolished water charges in 1986 when Deputy Bertie Ahern was our group leader. Water charges have not been in place in that local authority area for 11 years and this measure will not make Government Deputies, who are members of Dublin Corporation, popular. My constituents in Dublin North West will have to pay an additional amount in car tax next year which they have not had to pay for the past 11 years. I am sure in a few weeks' time when we will be knocking on doors the people will be thanking Deputies Shortall and Flaherty and the Minister, Deputy De Rossa for the new charge the Minister has imposed to save himself from the ghost of Councillor Higgins.

Mr. Howlin

It is a matter for local authorities to decide if there will be an increase.

Mr. N. Ahern

I accept that, but local authorities have to survive and if they cannot get money from one source they must get it from another. In my area the main problem is water pressure, not water charges. People would not mind paying a few bob for good water pressure. People may be spoiled in Dublin, but they like to have water in the tap. A global 3 per cent or 5 per cent cut in water pressure does not mean a 5 per cent cut in pressure for everyone, a person living on the top of a hill may not have any water. That has been the main problem down through the years.

The Minister will not be thanked for introducing this legislation in Dublin city because people will have to pay extra money for it. The Minister referred to the figure of 3 per cent, but I wonder if he is living in a dream world and if, in a few years, that figure will be considerably increased. The Minister said that local authorities will not lose out and that each one will benefit from this measure. He should explain that to his party colleagues who are members of Dublin local authorities and to their officials. They perceive this measure represents an anti-Dublin bias. In Dublin that bias is located in the Department of the Environment and has been there for some time. That has not changed under this Government. The perception is that the Minister has fiddled again.

Mr. Howlin

Deputy O'Hanlon said I was anti-rural and pro-Dublin.

Mr. N. Ahern

I do not always agree with him.

Miss Quill

The Minister is anti-environment.

Mr. N. Ahern

According to figures discussed at local authority level this measure will involve a loss of £8 million.

Mr. Howlin

That is wrong.

Mr. N. Ahern

I am sure the Minister saw the document. It was not prepared by a member of Fianna Fáil, but by management who have gone through it with a fine comb. The Minister's officials should talk to those people.

Mr. Howlin

I am arranging that.

Mr. N. Ahern

Their understanding and interpretation is that the local authorities in Dublin will lose £8 million.

Mr. Howlin

That is not true.

Mr. N. Ahern

In those circumstances the only source from which they can secure additional finance is through motor tax for which they can thank Deputy Shortall, who represents the conscience of the world, and her company.

Mr. Howlin

It is a matter of simple sums.

Mr. N. Ahern

People are not reading it like that. I hope that problem can be resolved before this legislation is passed because there is some doubt that local authorities will be at a loss.

I am glad the Minister included section 17 in the Bill. I dealt with the Minister's Department and the Department of Finance a few years ago in regard to a case which was brought to court because it could not be dealt with by the Departments.It is unfortunate when politicians are unable to deal with a problem through legislation. The court bailed us out on that occasion. I am glad the Minister has taken the opportunity to put that matter right.

Mr. M. Brennan

The Minister had great courage to do what he did, but he has made a complete and utter mess of all group water schemes.

Mr. Howlin

Has the Deputy talked to some of their members?

Mr. M. Brennan

The Minister should not try to say he did not make a mess of them. I was an organiser of a group water scheme and I know he made a mess of them.

Mr. Howlin

The Deputy should talk to some of their members.

Mr. M. Brennan

The Minister can talk to me if he wants to. I will talk to him. He should talk to people in County Sligo or in the west who are members of group water schemes.

Mr. Howlin

The Deputy should talk to some of their members.

An Leas-Cheann Comhairle

I am tiring of these interruptions. Let us hear Deputy Brennan without interruption.

Mr. M. Brennan

The Minister has been interrupting all night.

An Leas-Cheann Comhairle

That will not happen now. The Deputy should continue and address his remarks through the Chair.

Mr. M. Brennan

The Minister will probably have to employ ten times as many people in each county as are there are at present to organise group water schemes. Surely the people who organised them for the past number of years will not continue to do so. Members of group water schemes have got permission from landowners to run schemes through a number of fields. I know of a group water scheme where the forestry is growing on top of the pipes. This measure is probably welcome to a number of people, but we had a fair waiver scheme for people who could not afford to pay for water or service charges. Since the Minister's leader introduced water charges local authorities in Sligo were not afraid to introduce them because they were short of funding.

My local authority imposes refuse collection and sewerage charges. I cannot see why any person should be given an unlimited free supply of water. Our party supports the Minister, but coming from rural Ireland I can remember the day I went to the well for a bucket of water before we had electricity. While I was happy to bring water from the well I was delighted when we got tap water through a group water scheme.

A former Member of this House, the late Neil Blaney, was the first Minister for the Environment to introduce group water schemes. He did an excellent job for everybody and I pay tribute to him. Running water in any part of the country is of great benefit. The Minister will now increase motor taxation to pay for this. I listened with interest to other speakers, particularly to Deputy Quill, who made an excellent contribution——

Mr. Molloy

Hear, hear.

Mr. Howlin

The Deputy will be heard soon.

Mr. Molloy

She is my colleague.

Mr. M. Brennan

——and our spokesperson, Deputy Dempsey. Deputy Quill spoke about the roads and employing gardaí to try to reduce the number of road deaths, currently running at over 400 per year. In County Sligo we do not have enough money to cut the bushes along our county roads. We are writing to farmers asking them to cut the bushes themselves. That is the way the county's finances are. Income from motor taxation in our county will not pay for the roads because it has not a very large population. My neighbouring county is Leitrim, which has the smallest number of registered vehicles in the country. How will that county be subsidised?

Mr. Howlin

The equalisation fund.

Mr. M. Brennan

I hope it comes for them. One must compare the number of cars in Dublin and the number in County Sligo with the amount of taxation the Minister is taking in. Heretofore motor taxation receipts went towards the upkeep of national primary roads. When Deputy Connaughton was a junior Minister in a Government that doubled the national debt we had to get our Minister, Deputy MacSharry, with the support of Deputy Dukes for a minority Fianna Fáil Government, to put this country right.

Mr. Connaughton

What has that got to do with the roads?

Mr. M. Brennan

It is about the roads. That is why the country is booming at the moment, but what did Deputy Spring and Deputy Howlin do? They voted against every single thing. That was the interest they had in putting the country right. The Minister has no interest whatsoever in this country or in the environment, given what he has done.

Mr. Howlin

That is very unkind.

Mr. M. Brennan

It is not unfair.

Mr. Howlin

It is unlike the Deputy.

Mr. M. Brennan

The Minister has no interest in rural Ireland. He has done away completely with the group water schemes and it will cost an enormous amount of money to employ people to run these schemes.

Mr. Howlin

We have empowered them all over the country. They are delighted with me.

Mr. M. Brennan

It will certainly cost an enormous amount of money. I do not want to hog the debate. I welcome the fact that people in towns and cities will not have to pay for water, but the Minister has made an utter mess of the group water schemes.

Mr. Howlin

But the Deputy will support us. I want to thank all the contributors for a very stimulating evening during which they raised various perspectives. Having heard the contributions, it is no surprise that I am the first Minister to have done something positive about this issue for over 20 years, since there was very little agreement among consecutive speakers in relation to this.

Mr. Molloy

What is the Minister doing something about?

Mr. Howlin

I was attacked by the Deputies opposite for being both anti-rural and anti-urban.

Mr. Dempsey

It proves that the Minister was able to get it all wrong.

Mr. Howlin

I was attacked for being too centralist and for being too——

Mr. Molloy

What is it that the Minister is doing something about? Will the Minister give way?

Mr. Howlin

No, I will not.

An Leas-Cheann Comhairle

It is too early in the Minister's speech to ask him to do that. The Deputy may ask the Minister to give way later.

Mr. Molloy

Is the Minister now abandoning Labour Party legislation? That is what he said — 20 years.

(Interruptions).

Mr. Harte

It is getting too late for some Deputies.

An Leas-Cheann Comhairle

Precisely. The Minister should continue his speech without interruption from any side.

(Interruptions).

Mr. Howlin

I enjoy banter in the House, it enlivens the debate. Deputy Molloy has comfortably hidden from this subject since his outing on the £23 million, only to be slapped down by his party leader and denounced immediately afterwards.It has taken five variations in policy——

Mr. Connor

Not to mention somersaults.

Mr. Howlin

——to get to the position announced tonight by their spokesman, which is their fifth position.

Mr. Molloy

It is a fair position.

Mr. Howlin

They wanted to totally fund all and sundry with their first position — £23 million and more if required.

Mr. Connor

A 365 degree turn.

Mr. Howlin

That horrified people at head office so the second position was that they would restore charges. That, however, did not quite suit either, so the third position was taken by Deputy McDowell, even though they were running out of Deputies at this stage. Deputy McDowell suggested a different mechanism. Then they went on to metering but discovered that would cost £200 million and would take ten years. The PD strategy now is that they will have a position in the year 2012.

Mr. Molloy

Keep digging. It is all going on the record.

Mr. Howlin

I presume that is when they next expect to be in office, which is probably accurate. I would like to deal with some of the specific points made by Deputies. In general, I welcome the broad support.

Mr. Molloy

Deputy Howlin is known in Galway as the U-turn Minister. He asked us to support him and he changed his mind over Mutton Island.

Mr. Howlin

The Deputy is a bit fatigued. In relation to some of the specific points that were made, Deputy Dempsey has criticised——

Mr. Molloy

What about Mutton Island?

An Leas-Cheann Comhairle

I ask the Deputy to desist.

Mr. Howlin

Has Deputy Quill no control over her colleague?

Mr. Molloy

The Minister does not know where he stands.

Mr. Howlin

If the Deputy is in a hole he should stop digging. He made a bags of lots of things in his time.

Mr. Molloy

The Labour Party introduced this measure.

Mr. Howlin

Twenty years after Deputy Molloy vacated the Custom House, we are finally putting paid to Molloy's sub-standard houses which are blotting the landscape everywhere. He had a go and he made a bags of it.

Deputy Dempsey criticised section 2 (3) of the Bill which enables the Minister to make regulations.He described it as something unique, fundamentally flawed and possibly unconstitutional. I will give some examples of very similar provisions which have been enacted. They are to be found in section 52 (3) of the Local Government Act, 1991 — I wonder who the Minister for Local Government was in 1991? — section 3 (7) of the Local Government (Dublin) Act, 1993 and section 66 of the Local Government Act, 1994. It is a standard provision in most local government Acts. There is nothing sinister, unconstitutional, shaky or doubtful about it.

Mr. Dempsey

It does not make it right.

Mr. Howlin

It was not put in because, as Deputy O'Hanlon claimed, other ministerial colleagues were looking over my shoulder or because of advice from anybody else. It is a standard provision.

Mr. Dempsey

Was it ever challenged?

Mr. Howlin

Deputy Dempsey also complained about the use of motor tax to fund local government.He said it was the wrong way to finance local government. Is it not a suitable mechanism? It is a fund that is collected by local government locally so that local people — paying a tax that has not increased in any shape or form, and that can be increased next year by 3 per cent at the exclusive discretion of the local authority — can have access to that money immediately, 80 per cent for their own purposes and 20 per cent to go into an equalisation fund.

Mr. Molloy

The Minister's party has a history of raiding the road fund.

Mr. Howlin

——so that every local authority will benefit.

Mr. Dempsey

The Minister should not interrupt the rest of us who have been working all night.

Mr. Howlin

I cannot take total credit for inventing it because it has been put forward at fora throughout the country by councillors and practitioners. The most heartening thing about the entire package is the positive feeling it has engendered in local authority members and officials.

Mr. Molloy

The Minister is getting carried away with public relations.

Mr. Howlin

I am heartened by the Fianna Fáil policy document which mirrors the path I mapped out for local government on a range of issues. That is valuable because it shows political consensus. We differ on the funding mechanism and on breaking up the Department of the Environment.European experience shows that establishing a Department of Environmental Protection without a budget is not the correct way to proceed. I urge Deputy Dempsey to rethink his proposal.

Deputy Quill made valuable points about road safety. It is depressing to see the number of road deaths each week. Last weekend alone six people, including three young people, lost their lives. We have introduced a range of measures to tackle this problem. The new regime of on-the-spot fines and unmarked Garda speed cars is having a big impact, although it takes time to change practices. I am deeply concerned about the carnage on our roads.

As regards investing money in roads, no Government in the history of the State has recognised the need to address substandard non-national roads more than this Government. This year we will spend £173 million of taxpayers' money on roads. That will be matched by local authorities which will provide £70 million. For those who think I do not support rural Ireland, a staggering £0.25 billion will be spent on non-national roads — an unthinkable sum a few years ago. Some 10,000 miles of non-national roads will be resurfaced this year. Last year I asked local authorities to draw up a five year programme. Not only will we complete the entire 1997 road programme with the money I have allocated this year, but we will also do 40 per cent of next year's allocated road resurfacing before the end of the year. We are bringing the roads of rural Ireland up to the standard the people demand and deserve.

My record and that of the Government is second to none in terms of supporting rural communities, improving rural roads and establishing group water schemes. I more than doubled the rate available to Deputy Matt Brennan's group water scheme and every other group water scheme and more than tripled the rate of support to group sewerage schemes in acknowledgement of the needs of rural Ireland. I represent a rural constituency.

Mr. M. Brennan

I am still waiting for news on three group sewerage schemes.

Mr. Howlin

The Deputy will wait a shorter time with this Government in office than he would with any other alternative.

Mr. M. Brennan

These schemes would have been in place if my party was in power.

Mr. Howlin

It is difficult to listen to Deputy O'Hanlon who said there is no money for group water schemes when we are providing four times the amount of money this year for such schemes.

Mr. Molloy

I want to ask the Minister a question.

An Leas-Cheann Comhairle

Does the Minister wish to give way to Deputy Molloy?

Mr. Howlin

It is only fair that I respond to the Deputies who have contributed for the past two hours rather than listening to someone who came in at the end of the debate.

Mr. Molloy

I only wanted to ask about Mutton Island.

An Leas-Cheann Comhairle

You may not ask about it. The Minister has declined to give way as is his right.

Mr. Molloy

Why is Galway Bay polluted?

An Leas-Cheann Comhairle

I ask the Deputy to resume his seat.

Mr. Howlin

I am sure the Deputy is chivalrous enough to allow me to respond to Deputy Quill's valuable points.

Mr. Molloy

Why did the Minister change his mind about Mutton Island?

Mr. Howlin

We will have to send for Deputy Harney who will slap the Deputy again.

Mr. Molloy

The Minister is a fraud. He is carried away by his spin doctors.

An Leas-Cheann Comhairle

The Minister without interruption.

Mr. Howlin

It is rich for the Progressive Democrats to raise the issue of water when they managed to sink themselves on it. Their position was exposed in the House tonight. A comprehensive series of proposals have been put in place. Rural communities and Deputies applauded today's announcement of a new grant of £1,600 for those who want to provide their own water supply. The grant for sinking wells was abolished when the glorious "Mac the Knife's" regime, to which Deputy O'Hanlon referred, came to power in 1987.

Mr. M. Brennan

That is why the Minister is doing well today.

Mr. Howlin

It abandoned rural Ireland and it did not matter if people did not have a water supply.

Mr. M. Brennan

The Minister voted against everything.

Mr. Howlin

A grant of 75 per cent of the cost up to a maximum of £1,600 will be available to the forgotten people of rural Ireland thanks to this Minister and Government.

Mr. M. Brennan

The Minister forgot about them.

Mr. Dempsey

That will cost £300 million of taxpayers' money.

Mr. Howlin

I am sure the people will be delighted to know that if Fianna Fáil gets back into Government it will abolish that grant as well. Some 100 calls a day are made to the Department by people who were abandoned and forgotten but who will now receive a grant which Fianna Fáil abolished in 1987.

Mr. Dempsey

Since when has the Minister received 100 calls a day?

An Leas-Cheann Comhairle

There is too much interruption.

Mr. Howlin

Deputy O'Hanlon said we would not have abolished water charges but for the by-election in Dublin West.

Mr. M. Brennan

That is true.

Mr. Howlin

Deputy Matt Brennan is in favour of reintroducing them and his party's front bench is in favour of abolishing them. Fianna Fáil members should talk to each other.

Mr. Connaughton

The Deputy should tell that to his constituents in Sligo.

Mr. M. Brennan

Galway is in a mess.

Mr. Howlin

When Fianna Fáil finds a common position, it might have the makings of a Government in the next decade.

We have worked for well over a year on a comprehensive strategy to reform local Government.

The document, Better Local Government — A Programme for Change, has been acknowledged as a comprehensive one by every county. Deputy O'Hanlon also mentioned the Federation of Group Water Schemes, which I met twice. At our most recent meeting two weeks ago, it expressed satisfaction with the package of measures this Government had agreed and it told its annual general meeting the following Sunday that it would support the proposals.

Mr. Dempsey

The Minister should not stretch the truth too far.

Mr. Molloy

The Minister knows that is not correct.

Mr. Howlin

We did not have full agreement on the issue of the take-over of group water schemes. From the beginning I made it clear there was no question of a compulsory take-over of any scheme.

Mr. Molloy

We are now hearing the truth.

An Leas-Cheann Comhairle

Deputy Molloy should restrain himself.

Mr. Howlin

That is about 20 years too late. I have expressed the view publicly that it would be good for group water schemes to be taken over. It is done in many counties. In some counties, such as Tipperary South Riding County Council, it is the norm, but where group water schemes want to remain autonomous and independent they will preserve the absolute right to do so and they will have access to all the grants, and the substantially increased funding which this Government has provided. These are available through my Department for that sector which was forgotten for many years.

Mr. N. Ahern

Forgotten by whom?

Mr. Molloy

By 5,500 of them.

Mr. Howlin

They are now properly resourced and the money is available to bring deficient schemes up to standard.

Mr. Molloy

This is terrible drivel.

Mr. Howlin

Virtually every rural Deputy on this side of the House has spoken to me about the degree of support which exists for the package of measures we have put in place.

Mr. Dempsey

They are telling him what he wants to hear.

Mr. Howlin

We have done a remarkable day's work for rural Ireland which will be acknowledged when people there are asked to endorse and re-elect this good Government. Deputy Dempsey raised the question of the community development contribution. I want to pick up on that before it develops another life of its own because it took me four occasions to explain the mechanism of increase, that is, 3 per cent on a base, to Deputy O'Hanlon. He is a very intelligent man and I think he grasped it at the beginning but it did not suit him to admit it. The community charge is a proposal which came from the Lacey Commission which was endorsed at many of the regional meetings. It means if a local authority wanted to provide a facility outside its normal remit, a new facility for children, for instance a sports facility or running track, for which it would not have the normal wherewithal to provide, perhaps in conjunction with either a commercial development or a community group which might have access to funding, it would — after a plebiscite — be able to levy a charge for that purpose alone on a community. As I said explicitly in the programme Better Local Government—A Programme for Change, that good idea will be fleshed out in the new comprehensive legislation which will be enacted to coincide with the centenary of local government next year.

Deputy Matt Brennan said simply that he was against the abolition of water charges.

Mr. M. Brennan

I did not say that.

Mr. Howlin

It is a fair point and it was expressed by a good number of Deputies opposite, but it is one with which this Government does not agree. We believe it was a tax——

Mr. M. Brennan

I did not say that and the record will show it.

Mr. Howlin

If the Deputy wants to correct it, I have no difficulty with that.

Mr. M. Brennan

I said I was against the way in which the Minister interfered with group water schemes.

Mr. Howlin

No. He said he was against the abolition. If I am misrepresenting the Deputy, I am sure he will correct me. In reality, I know the Deputies opposite who believe in principle that we should not have abolished water charges. This Government made a decision which is supported by the great bulk of people——

Mr. N. Ahern

He says that.

Mr. Howlin

——that the existing system was unfair and did not relate to the volume of water consumed or the cost of providing it. Therefore, in essence, it was a tax.

Mr. Molloy

Why was that not said 16 years ago when Deputy Spring introduced it?

Mr. Howlin

All the Deputies opposite were in Government in the intervening years. They did nothing about it but this Government has done something about it. That is a simple fact.

An Ceann Comhairle

Let us hear the Minister out.

Mr. Howlin

This is a historic——

Mr. Molloy

U-turn.

Mr. Howlin

——occasion. Local government will have its own designated, buoyant, ring-fenced source of funding for the first time in its history. This will enable local government to plan and develop. It will strengthen the role of the councillor and the community, in tandem with the range of measures outlined in Better Local Government—A Programme for Change, to make the system more democratic, open and inclusive. It will strengthen the management regime and facilitate training. In tandem with all those propositions which will be enacted in the next local government Bill, this funding mechanism will ensure that local government will thrive into the new millennium and be the engine for local development.

Mr. Dempsey

And pigs will fly.

Miss Quill

Comic opera at its best.

Question put and agreed to.

An Ceann Comhairle

When is it proposed to take Committee Stage?

Mr. Howlin

On Wednesday, 7 May 1997, with the agreement of the Whips.

Committee Stage ordered for Wednesday, 7 May 1997.