I move: "That the Bill be now read a Second Time."
This Bill provides for the most fundamental overhaul of the local government sector in 100 years, bringing the Irish local government system into the 21st century so that it is more representative of and more responsive to the needs of our citizens and communities.
This Government was elected with a mandate to reform the economy, the banking sector and the political system and today is yet another step towards fulfilling that mandate. We remain committed to ensuring that citizens are at the heart of decision-making in this country and as part of this, we are rebuilding local government as the primary vehicle of governance and public service at local level. For many people, local government is their main interaction with the State and I am personally committed to ensuring that this reform programme delivers better engagement with and service to our communities.
The Bill gives legislative effect to many of the reforms to local government that were decided by Government and set out in Putting People First - Action Programme for Effective Local Government, published last year, which provided a roadmap for the far reaching reform of structures, functions, funding, operational arrangements and governance within local government.
Our communities deserve a local government system that meets their needs in a way that is efficient, flexible and, most importantly, accountable. Their voices need to be heard in terms of how services are provided at local level and this Bill strengthens our local democracy so that our citizens are well-represented and well-served by their local councils.
The action programme recognises that it is not enough to change the institutions of local government and that we need to create a system that is more locally focused and engaged with communities, while also eliminating duplication, outmoded arrangements and inefficient practices.
This Bill does just that by providing for a major reorganisation of the structure of local government particularly at sub-county level. It will reduce the layers of administrative duplication, address unbalanced representation and remove other long-standing anomalies through dissolving 80 town councils and replacing them with municipal districts. Under this new system of municipal districts, councillors will work more directly for the interests of their communities across the country rather than working as dependent agents of central government.
The Bill also provides the basis for completing the mergers of Limerick City and County Councils, North and South Tipperary County Councils and Waterford City and County Councils on which I am pleased to say much of the heavy lifting at an administrative level has already been completed. It provides for the overhaul of existing regional structures, again removing duplication through new consolidated regional assemblies. We are doing this to strengthen our system of governance and public administration at local and regional levels to make it more rational, effective and responsive to the needs of our citizens.
While structural reform is much-needed, it is equally important that we strengthen the powers and functions of local government and refocus its role more towards activities that promote the quality of life of citizens and communities.
For the first time, the complete set of functions reserved to the elected members are set out in one place, providing clarity to underpin elected members fully discharging their roles and ensuring there is no hiding place for those members that might prefer to avoid the hard decisions they need to make from time to time. Most reserved functions of a local nature will be discharged by the municipal district members. The more strategic and county-wide decisions will be made at county level.
The Bill also introduces some 20 new reserved functions at both county and municipal district levels - a figure which will probably increase as we go through Committee Stage when I intend to bring forward additional provisions, including in regard to annual service delivery plans and local economic plans. I will discuss the significant power of elected members to vary the local property tax. In addition to that, this Bill will provide new powers to approve local and community plans, to establish a local community development committee or adopt an implementation plan following a national oversight and audit commission, NOAC, recommendation, all of which will significantly enhance the role of the elected council in determining policy, directing its implementation and overseeing service provision by the local authority.
There are also new reserved functions for municipal district members which again will bring local government closer to the people. These functions relate particularly to the devolution of responsibility for the preparation of municipal district budgets and schedules of works within the wider local authority budget process as well as the making of charges on amenities, facilities or services provided by the local authority within the district.
As part of our overall commitment to support local and community development and to create a strong synergy with local government, the Bill offers new mechanisms for co-ordinated and coherent action through the establishment of local community development committees. In future, local government will be centre stage in the local and community development effort, bringing its resources and democratic mandate to bear while retaining and building on the existing strengths of local initiative and commitment.
All of this is supported by major reforms to the governance and oversight of local government - both the elected councils and the executive - provided for in this landmark Bill. At national level, we will establish a national oversight and audit commission which will ensure local authority performance is monitored and assessed in a meaningful way. Coupled with this, at local level, we are providing for the elected councils to have a greater oversight role in the development and implementation of policy, in furthering economic development and enterprise support as well as facilitating the devolution of more functions from central level to local government.
There will be cost-efficiencies to be gained, particularly in regard to the dissolution of the 80 town councils and the reduction in the number of councillors from more than 1,600 to 949. However, that is not the primary objective of, or rationale for, this important legislation. Rather, this Bill is centrally connected to our overarching vision of building a better, more responsive and more accountable system of local government where the voices of all citizens are heard and the needs of our communities are addressed. In that regard, Deputies will also be interested to know that I have recently established a working group, chaired by Fr. Sean Healy, to report to me with recommendations on how we can provide for more extensive and properly structured input by citizens into the decision-making process in local government. Local government cannot operate on a stand-alone basis - it must be informed by the communities that it serves.
We need to mobilise communities to more active, positive engagement with local government. In so far as people have a relationship with the local authority, it can often be in a negative context - a complaint about, or a payment for, a service - or it can be a dependency-based one. I will look to the working group to recommend mechanisms by which individuals and groups and leaders of communities who are interested in promoting the quality of life of their areas can work with the local authority towards that goal.
Before commenting more specifically on the contents of the Bill, I would like to comment briefly on some important measures that, although outside the scope of this legislation, will improve the engagement between citizens and local government. The first of these is the local property tax. As I have said many times, the local property tax is essential to renewing the relationship between local authorities and the citizens they serve. Its introduction offers a real opportunity for meaningful local government. As citizens will be directly investing in their communities, councillors will be much more accountable for the spending and tax decisions they will make. This financial measure reconnects the citizen with local services for the first time since 1977.
Councillors have rightly complained that without fiscal power, local government would continue to be ineffective. Under the new regime, elected members will have an important role in determining the appropriate level of the tax, with discretion to increase or decrease the rate by up to 15%. This is a very real power for elected councils to exercise according to local circumstances, whether it is to increase the rate to provide for worthy projects in their area or to decide on a lower tax regime as they see fit. Above all, they will be accountable for these decisions, which is the essence of local democracy. In many ways, I consider this to be the most important reform that we have introduced in local government - one that can change our system from one of local administration to real local government.
Complementary to the provisions around local and community development in the Bill and given the importance of a robust network of economic and enterprise supports, my colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, has brought forward important complementary legislation to the Bill before us. The Minister's Bill provides for the dissolution of the city and county enterprise boards as those functions are now to be integrated with the business support units of individual local authorities. The local enterprise offices which each local authority will establish will expand the footprint of the CEBs in terms of the support services they currently offer, combining them with the services and supports provided by the local authorities to provide a much-needed and more effective one-stop-shop for small businesses. Entrepreneurs in the current climate need every encouragement they can get to set up, develop and expand in business and these local enterprise offices will be designed to meet their needs directly rather than through disparate set of service providers.
The changes in regard to enterprise and local development are major departures in local government functions, reversing the tide of marginalising local government over the past few decades. I have no doubt that this momentum will be built on and with the more streamlined structures, stronger funding base and more effective governance arrangements of the reform programme, we will see local government progressively taking on a wider role, further enhancing its relevance to the citizens it serves. To facilitate this widening of the role of local government in the future, the Bill extends the existing provision for the devolution of functions of Departments to include the functions of State bodies more generally.
I will now to go through the main provisions of the Bill in detail. This substantial Bill is set out in 10 Parts made up of 65 sections, with five associated Schedules. Part 1 contains standard provisions dealing with title, collective citations, construction and commencement. It also provides for interpretation of key terms, regulations, orders and directions, repeals, revocations and amendments to the Local Government Act 2001, which remains the core local government statute, and a number of other codes, as well as other technical provisions such as legal savers and provision for expenses.
Part 2 contains the major provisions relating to the reform of local government structures at county and city levels.
Specifically, it provides for the dissolution of the existing city and county councils in Limerick, Tipperary and Waterford and the establishment of new amalgamated authorities as their successors, as well as other consequential amendments to the definition of local government areas and local authorities in the Local Government Act 2001. The implementation work on the merger processes, which has been progressing on an administrative basis in all three areas, is well advanced. These provisions will provide the necessary legal basis for the completion of this work, with the full merger of the authorities to take place after the local elections in mid-2014. This part also provides for a ministerial order to decide on an establishment day when these new arrangements will come into force. This day, which I envisage being 1 June 2014, will also apply to the replacement of the town councils, dealt with in Part 3 of the Bill.
Part 2 also provides for the revised membership levels of local authorities following on from the local electoral area boundary committee report, which was published in May of this year. The revised council membership numbers, as set out in section 15, will ensure more equitable representation and better proportionality in the number of electors per member. These provisions are essential to address disparities in the ratio of councillors to population between different counties. In some areas, the current numbers of councillors no longer relate to the populations they represent following major changes in population. For example, the ratio is Leitrim is 1:1,445, whereas in County Cork it is 1: 9,329. In three of the Dublin local authority areas, there are more than 10,000 people per councillor.
Part 3 provides for the introduction of the new system of sub-county governance in all areas of the country except for the four Dublin authorities and Cork and Galway cities. This configuration of municipal districts, which will replace the existing 80 town councils, in effect, will be based on the recommendations of the local electoral area boundary committee report. The districts will consist of one or more local electoral areas, which will be determined by order under section 23 of the 2001 Act. As I have said, this will give effect to the recommendations of the boundary committee's report. Following the 2014 local elections, elected members for county councils and for city and county councils will also be members of their municipal districts. In effect, this will do away with the current inefficient and inequitable duplicate representation which town councils created. The municipal districts will be established as components of the county councils. Elected members for each district will perform functions of the local authority on a devolved basis for the district. Contrary to what some ill-informed comments have suggested, we are not centralising powers at county level. Instead, we are devolving important elements of the statutory functions of county councils to district level. Therefore, we are increasing subsidiarity and making local government much closer and more responsive to the day-to-day needs of communities and much more representative of their priorities in setting policies and making decisions.
Schedule 3 sets out the reserved functions that may be performed by elected members at municipal district level, at either municipal or county level, or at county level only. These reforms will bring much needed clarity and visibility to the powers of elected members and will eliminate the current duplication of work between town and county councils. Councillors will have a clear understanding of their powers and their responsibilities to the communities they represent. The Bill will create a stronger local government, where elected members are empowered to effect real change in their communities. Elected members at municipal district or county level will have the power and responsibility to make sure services are provided in line with needs and resources. Their capacity to do this will be greatly strengthened by the unified structures being put in place. They will work under a single organisation and combined resources instead of, for example, 12 separate authorities in Cork and nine authorities in Tipperary. Leaving aside any nostalgia about town councils, the logic is self-evident. We must strengthen our resolve if we are to build a system of citizen-focused local government that is rational and effective.
Part 4, together with Schedule 4, sets out a range of consequential provisions to ensure the dissolution of the city and county councils in Limerick, Tipperary and Waterford and the town councils will involve a seamless transition from the existing structures to the new arrangements.
Part 5 deals with a range of financial issues following the dissolution of the current city and county councils in Limerick, Tipperary and Waterford and the town councils. Specifically, it provides for the establishment of a single rating authority for each county and a process for the harmonisation of commercial rates between towns and counties. As we have sought to avoid any shocks in the move to harmonised rates, this transition to a single rate will take place over a maximum of ten years, beginning in January 2015. This will give the elected members the discretion to link the adjustments, where possible, to savings as they arise from implementation of the reforms and, where practicable, to pass these or other savings on in the form of reduced costs to local businesses.
Part 5 also includes provisions for the standardisation of rates refunds on vacant premises across the country and for the amalgamation of valuation lists. On the rates refunds on vacant premises, a separate refund regime entitling commercial property owners to a 50% refund of their annual commercial rates liability in the event that a property is unoccupied is currently operating in Dublin city, Cork city and Limerick city. Elsewhere in the country, refunds are 100% of rates liability. The Bill standardises the level of refund at 50% nationally. I recognise that these are difficult economic times for many businesses, including property owners. There are numerous factors to be considered when proposing an amendment to rates legislation, including its effect on business sentiment and its impact on local government finance. There may be a perception that this standardisation provision is a further cost on business, but my intentions are wholly the opposite. I am considering further how this provision will work in practice to ensure consequences other than those I intend are not realised. I will revert to this matter again as the Bill makes its way through the Houses.
Part 6 contains provisions relating to the much-needed alignment of the local and community development sector with local government. Our communities deserve a co-ordinated and coherent approach to the social, economic and physical development of their areas. I consider the provisions of this Bill to be an important step in achieving that objective. Specifically, provision is made in this part for the establishment of local community development committees in each local authority area, with a mandate to bring greater coherence and strategic co-ordination across the range of local and community development interventions. As these committees of the local authority are established, the county and city development boards will be wound down. The Bill provides for their formal dissolution. For the purposes of ensuring a coherent and co-ordinated approach to local and community development programming at local level, the Bill makes provision for co-operation by public authorities and other publicly funded bodies in the work of the committees.
Section 35 provides for the Minister to make regulations for the establishment of the committees, the performance of their functions and the development of a local and community plan, as well as procedures applying to the decisions of the committees, among others. The committees will have a lead role in local and community development. They will have particular responsibility for the preparation and adoption of a five-year plan for the local and community development of the area. Provision is also made in that context for the approval of the plan by the elected council of the relevant local authority. To ensure these new committees are effective, their membership needs to be as broad as possible. The Bill provides that they will include members and officials of the local authority, representatives of local statutory bodies and representatives of local development interests, including publicly funded local development bodies and community representatives.
Part 7 sets out some of the most significant reforms of how our local government system is governed and managed. I have already highlighted the new reserved functions at both county and district levels, which are set out in Schedule 3. In particular, Part 7 provides for an enhanced policy making role for elected members, including with regard to economic development and enterprise support, particularly through the establishment of dedicated strategic policy committees. As I mentioned earlier, the separate passage of the County Enterprise Boards (Dissolution) Bill 2013, which is being led by my colleague, the Minister, Deputy Bruton, will pave the way for the delivery of microenterprise supports by local enterprise offices in local authorities, enhancing the role of local government in implementing economic development and enterprise support measures.
Fundamental changes are being made to the role of the manager within the system of local governance and the balance of powers between the executive and the elected council, through a range of new provisions in this part of the Bill. The Bill provides for the replacement of the traditional city and county manager position by a new post of "chief executive". The change from manager to chief executive, which reflects modern terminology, is an important aspect of clarifying the appropriate roles of the executive in implementing policy of the council as, in effect, the board of directors of the authority. In that context, elected members will have the power of decision over the appointment of the individual recommended by the Public Appointments Service for the chief executive post in their authority, while retaining the independence of the selection procedures of the Public Appointments Service. More importantly, the change to a chief executive post is accompanied by a range of significant provisions to give substance to the rebalancing of roles. For example, there are increased obligations on the chief executive to provide additional advice and assistance to elected members in the discharge of their roles at council and municipal district levels and in various committees. Chief executives will be obliged to have regard to the views of elected members while policy options are still in formation and will have to assist elected members in the development of new policies at an early stage of the policy development process. Chief executives will also have to prepare monthly management reports for the elected members, which will be placed on the council agenda for follow-up as the members consider appropriate.
The powers of the elected members in overseeing the implementation of policy by the chief executive are also being strengthened, including specific provision for oversight and superintendence of action taken pursuant to directions of the elected council. Where members are not satisfied with the chief executive's approach to implementation of their policy, they may request a report in which the chief executive must indicate what new or different actions may be pursued or other possible adjustment to the policy.
Section 140 may no longer be used to direct the chief executive in relation to planning functions, following a recommendation of the Mahon tribunal, and this also applies to decisions involving financial or other benefit to individuals or specific organisations. Exclusion of section 140 from these types of functions allows for the procedural requirements related to the use of section 140 to be relaxed, with a shorter timeframe for notice in the context of modern communications, and fewer members needed to propose a resolution under the section. As last year's action programme indicated, these changes reflect the appropriate assignment of roles between the executive and political elements, strengthening the checks and balances and minimising possible conflicts of interest.
Part 7 also contains provisions relating to the devolution of functions to local authorities. While provisions are already in place under section 72 of the Local Government Act 2001 to devolve departmental functions to local government, this Bill now extends the provisions to cover functions of State bodies, thereby underpinning a core objective of the action programme to expand the role of local government in Ireland to maximise the benefits of local decision-making on services that are local in nature, and the utilisation of what is a country-wide network of public service. I also intend to work with my colleagues in government to ensure that all of the Government's decisions on the provision of services at local level will require formal consideration of the potential for the services to be delivered through the local government system, as a further safeguard against any future bypassing of local government or establishment of new bodies or agencies at local level, something which would unravel the very significant progress that this Government has made in terms of agency rationalisation.
The action programme signalled some major enhancements of local authority functions in the areas of local development, economic development and local enterprise support. However, I see this as just the first phase in the expansion of the role of local government which I envisage progressing on a more far-reaching basis as the other reforms to structures, funding, governance and operational arrangements are seen to increase the effectiveness and credibility of local government over time.
Part 7 also introduces more transparency in relation to the payment of expenses to elected members, including disclosure and publication of expenses arising from their membership of other bodies by virtue of their membership of a local authority. I am also separating out expenses for attendance at conferences from attendance at training events, to allow for a significant reduction in the funding made available for attendance at conferences, and a presumption against conferences organised by commercial interests. New provisions are included regarding attendance at training, to allow for a more structured approach to training for elected members and their continuing professional development, and for training to be provided at a more local level. Persistent non-attendance by elected members at training specially being provided for them can, in future, lead to financial penalties.
Part 8 consists of two chapters. The first contains provisions for the financial relationship between county and district levels, the funding arrangements in respect of district level functions, as well as amendments to the Local Government Act 2001 to reflect the financial arrangements needed following the dissolution of town councils. A regulation-making power is provided for in section 53 whereby the Minister may set out the budgetary format and the process to be followed in developing a draft local authority budget. It also makes provision for budgetary procedures at municipal district level, which will underpin the financial discretion of these new sub-county structures.
Members at the municipal district level may, by reserved function, make amendments to the relevant local authority budgetary plan and provision is also made in that section to ensure that the chief executive takes account of the budgetary plan adopted by the elected members of the relevant municipal districts in the preparation of a draft local authority budget. Other provisions relate to the timing of budgets, which, under EU provisions, will in future have to be adopted by 31 December. A key provision in this context is the power for the elected members at municipal district level to determine priorities in the various programmes of works within the district. While members are normally consulted on such matters at present, this will represent a significant departure in giving the elected members a statutory role in deciding the detail of programmes within their districts.
Chapter 1 of Part 8 also introduces new provisions in relation to audit procedures and regulations bringing greater oversight and accountability into the local government process. Following the enactment of the Bill, local authorities will be required to establish an audit committee within three months of taking office. The functions of the committee are also set out in this chapter, as well as provision for the Minister to make regulations regarding matters such as membership, meetings and reports. Various existing provisions relating to attendance by the auditor at a meeting of the audit committee or the local authority are being restated, and provision is also made for qualified legal privilege for an auditor attending a meeting under these provisions, which strengthens the position of the auditor in reporting objectively and rigorously on the financial affairs of the local authority. The Bill, in Schedule 1, Part 2, also repeals now archaic legal provisions for surcharge or charge which reflected nineteenth century circumstances. Similar quasi-judicial powers have long been repealed in the audit provisions for central government. The modern financial control and governance framework in local government means that these specific powers are now also redundant in local government.
At national level, chapter 2 of Part 8 provides for the establishment of a national oversight and audit commission, NOAC, for local government. This is a very significant development in public accountability. The NOAC will provide an independent scrutiny of local government performance in fulfilling national, regional and local mandates, bringing accountability and coherence to the forefront of consideration of local government performance. In addition to its oversight and audit functions at local level, the commission will have a specific oversight function to ensure value for money is achieved where State funds are being channelled through local government. It will have an independent chair and will comprise members with relevant expertise in a range of areas.
The NOAC will report to the Minister for the Environment, Community and Local Government; to other Ministers in respect of services performed within their overall policy responsibility; to the relevant regional assembly or assemblies; to the relevant local authorities; to the Oireachtas Joint Committee on the Environment, Culture and the Gaeltacht; and, as appropriate, to other Oireachtas committees with oversight responsibilities for the relevant policy areas. The NOAC will not give rise to additional resource requirements as it will be staffed from within my Department, but with a facility to request a regional assembly to prepare a specific report, or to engage with other bodies for the same purpose, or to carry out other research or tasks for the commission.
Part 9 provides for the revision of regional structures and functions. This will be undertaken primarily through the replacement of the eight regional authorities and two assemblies by a single set of regional assemblies, to be established by ministerial order, subject to the agreement of the Minister for Public Expenditure and Reform. The main functions of the regional assemblies, which will be further elaborated in the Establishment Order, will be the formulation of regional spatial and economic strategies and management of the EU structural funding programmes.
The Bill will not directly alter local government structures in Dublin. The action programme for effective local government indicated that it was not feasible to carry out a review of local government arrangements in the capital in time to implement significant changes for the 2014 local elections. Instead, Part 10 provides for a forum of elected members from the four Dublin local authorities to consider local governance arrangements for the Dublin metropolitan area, including options for the introduction of a directly elected mayor to be put for decision through a plebiscite in 2014. This forum has already been convened at my request and in advance of the legislation, it is progressing its work, including a recent public invitation for views.
A plebiscite will be held in the four Dublin authorities at the same time as the local elections, if a resolution to that effect is adopted by each Dublin local authority. The plebiscite will decide whether an office of directly elected mayor should be established for the Dublin metropolitan area. Part 10 sets out the detail around the holding of the plebiscite, including voting entitlements, costs, reports to the Houses of the Oireachtas, etc. It will be a matter in the first instance for the four elected authorities to form a consensus view on the type and function of directly elected mayor they consider most suitable for the metropolitan area, and the resulting adjustments to existing governance arrangements they deem appropriate. Then it will be for the electorate in Dublin to decide whether or not they support such a mayoral arrangement, in light of all the implications of the proposals.
I can see possible merits in such a mayoral office in terms of metropolitan roles and promotion of Dublin, but, unlike the previous Government's proposals, this procedure will ensure that an additional office-without real powers-is not simply grafted on to the existing local government system. If such an office is to be created, and that will be for decision by the electorate in Dublin in light of all the implications including cost, this will happen only on the basis of having substantive functions and with any necessary adjustments to existing governance arrangements which would inevitably involve local authorities and indeed central government agencies ceding functions to the office of directly elected mayor.
There are five Schedules to the Bill which provide for consequential amendments to the Local Government Act 2001 and other enactments within the local Government Acts 1925 to 2013; consequential amendments to other Acts including the Housing Acts 1966 to 2013, the Planning and Development Act 2000 and to the electoral law, including provisions for revised spending limits at local elections, involving an average reduction of 13%, following the significant changes to the local electoral areas arising from the report of the Local Electoral Area Boundary Committee in May and the dissolution of the town councils.
I have referred to Schedules 3 and 4 in my previous comments on the associated parts of the Bill. Schedule 5 provides a list of the relevant public authorities and other publicly funded bodies that will have a statutory duty to co-operate with the work of the new local community development committees.
Finally, I would like to signal to the House that I will, as I mentioned earlier, be bringing forward several amendments on Committee Stage, which I hope will be taken early next month. Chief among these will be amendments related to the development of regional spatial and economic strategies, the preparation of local economic development plans and the linkage between these and the regional strategies. Other Committee Stage provisions will include local authority annual service delivery plans, performance standards and performance indicators as an element of the service delivery plans and shared services as well as a range of consequential amendments arising from linkages with other Acts.
I am happy to be in a position that I can put on record that this legislation and the various non-legislative measures that are being implemented add up to the most comprehensive programme of local government reform ever undertaken in the history of this State. They also give substance to the vision set out at the start of last year's action programme document that local government will in future be the primary vehicle of governance and public service at local level answering more effectively to the needs of our citizens and communities. This will be achieved not only by virtue of the measures that are now being provided but through the potential that is being created for the further development of local government as a vibrant force in restoring and advancing our country based on stable resources, efficient structures and operations, active community engagement and strong and responsible local governance, leadership and accountability. I commend the Bill to the House.