Dáil Éireann debate -
Wednesday, 3 Jun 1998

Vol. 491 No. 6

Written Answers. - Local Authority Funding.

Eamon Gilmore

Question:

204 Mr. Gilmore asked the Minister for the Environment and Local Government if, in regard to the allocation of the rate support grant to local authorities in 1998, the equalisation provisions of the Local Government (Financial Provisions) Act, 1997, were used to ensure a fair allocation between all authorities; if not, the criteria or mechanism used to determine the grant for each authority; and if he will make a statement on the matter. [12756/98]

Minister for the Environment and Local Government (Mr. Dempsey)

The Local Government (Financial Provisions) Act, 1997, did not include any equalisation provisions with regard to the allocation of rate support grant equalisation funding.

The 1997 equalisation fund allocations replaced income lost from the rate support grant and domestic water and sewerage charges, together with revenue losses arising from a change in the treatment of the proceeds from the pre-1993 house sales scheme. Initial 1997 allocations to local authorities consisted of a combination of rate support grant, retained motor tax income and payments from the equalisation fund.

These allocations were calculated on the following basis:

BASIS FOR ALLOCATION

1. 1996 base Rate Support Grant increased by 2 per cent.

Plus

2. (a) 1996 Domestic Water and Sewerage Charges Warrant (including arrears but excluding waivers) increased by 2 per cent.

Multiplied by

(b) the greater of:

(i) 1996 percentage collection rate of domestic Water and Sewerage Charges Warrant

or

(ii) Average percentage Collection Rate 1993-96 inclusive

Increased by

(c) Percentage increase in combined rate of domestic water and sewerage charge for 1997 over 1996.

Plus

3. Revenue forgone as a result of changes in treatment of pre-1993 House Sales Schemes proceeds in 1996.

Given that the main purpose in 1997 in allocating funds was to replace income lost, this has been achieved as fairly as possible through using this formula.

As a result of motor tax buoyancy during 1997, an additional £8 million became available for allocation to local authorities. These additional allocations which related to 1997 were notified to authorities in March this year. After allocating an extra 1.75 per cent of initial allocations across the board to all local authorities, a model using the following five criteria was used for allocation of the balance: (1) penny produce; (2) net effective valuation, NEV,per capita; (3) non-State assisted expenditure related to NEV; (4) water and sewerage expenditure related to NEV; and, (5) size of road network related to NEV.

Local authorities have been notified that 1998 allocations are 2 per cent above the revised 1997 allocations.

My Department is sponsoring a Needs and Resources pilot study which is currently being conducted by Galway County Council. It is my intention that this will facilitate the development of an equalisation model that can be applied nationally. The needs and resources of the various local authorities need to be measured so that funding can be distributed in a fair manner. The model will need to be flexible enough to take account of factors that may apply to any authority.