I ask Deputy Gould to reflect on his political history because my party did not bail out the banks. He should get his facts right before commencing this debate.
I thank the Deputies for giving me the opportunity to speak on the importance of local authority funding and on the ongoing impact of Covid-19 on local authorities, and in particular their finances. The challenges are common across the local government sector, notwithstanding the differences between urban and rural authorities in scale and sources of funding. I addressed some of these issues in the House as recently as last night, and while there have been no significant developments overnight, I welcome the chance to hear Deputies directly on the financial issues.
I want to reassure the House that my Department and I are continuing to make the case for the local government sector in the context of budget. In this regard, the Department is engaging intensively with the Department of Public Expenditure and Reform on the financial challenges facing local authorities as a direct consequence of the pandemic, both in terms of additional costs incurred as part of the strong local government response, and declines in local authority income streams. These matters are under active discussion.
My Department is also working closely with the local government sector on these financial issues to secure additional support for local authorities and to ensure that any additional resources that may be available are appropriately targeted where they are most needed. It is my intention, as part of this process, to ensure that local authorities, particularly those that suffered the impacts of the previous economic downturn most acutely, can recover as quickly as possible in order to drive local economic activity, and avoid significant deficits and additional debt as a consequence of the Covid-19 pandemic.
In this regard, it is also important to recognise the role of elected members in the financial affairs of local authorities. The adoption of a balanced budget is probably the single most important duty that elected members are called upon to carry out each year. I fully recognise that this process is likely to require tough decisions by elected councils in the coming weeks. While the Government is keen to support the local government sector and is working towards that end in the context of the forthcoming budget, it is important to reflect on the role of elected local authority members, who are best placed to determine the spending priorities in their respective counties.
This is also a reserved function and local authorities must balance those priorities against available resources. To achieve that balance, the elected members must make informed and necessary choices to balance the level of service provision with the available income. In advance of budget 2021, I note that 22 of the local authorities throughout the country have opted to vary their local property tax, LPT, upwards while only three have opted to vary it downwards. Arising from these variation decisions, the local authority sector will gain an additional €11.5 million from LPT next year compared with 2020. The elected members will now have to make decisions on how to balance the expenditure element of budget 2021 in line with the increase in LPT income. Some authorities have already indicated to me that, in the event of the pandemic remaining a national issue in the medium term, it will be extremely difficult to present members with a balanced budget given the negative impact on certain services and income streams and also the increased expenditure required across an array of different services. Notwithstanding that, the adoption of a balanced budget remains a requirement and I am confident that elected councils throughout the country will rise to the challenge and meet the requirements over the course of November.