Local Authority Financing: Motion (Resumed).

The following motion was moved by Senator M. O'Toole on Wednesday, 14 March 1984:

That Seanad Éireann deplores the inadequate financing of local authorities for the financial year 1984 with the derisory increase for rates support grants of 0.8 per cent over 1983 which will lead to further unemployment and a deterioration in services, and calls on the Government to take immediate action to rectify their position.

Debate resumed on amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"notes the level of Government support for local authority finances as reflected in the increase of 10.3 per cent in the aggregate of grants and subsidies being provided for 1984 and the fact that almost two-thirds of all local authority spending on current account is provided, or recouped, from the Exchequer; and that taking account of these facts and of the extended powers which have been conferred on local authorities to raise revenue from local sources, any adverse effects of the current economic difficulties on local authority services and employment in 1984 will be minimised".

—(Senator O'Leary).

Mr. Kiely

I wish to speak in favour of the motion. Local Government is an essential element in a democratic state and is also the machinery by which important services are provided. A local government system permits more direct contact with local people in the process and responsibilities of government. Conditions, needs, opinions, resources and aspirations of local significance differ and therefore it is essential that there should be means of converting national policies in relation to such matters as housing, roads, water, sewerage services and other amenity services into action programmes suited to the circumstances of different areas.

Local authorities are responsible for providing many services. They are responsible for the upkeep and safety of our roads. They are expected to provide houses and also expected to provide water and sewerage services for our community, along with several other needs so essential for the development and preservation of the environment generally. In order that local authorities can provide these services adequately they need finance. There is no need to state that local authorities are not properly financed. The present disastrous state of finances has reached a crisis point, and something more than talking is necessary.

The first urgent requirement is that national Government should admit inadequacies in the present system of financing. As the Government they have control and they are to blame. It must also be admitted that most of the functions being carried out by local authorities are costing a fraction of what it would cost to administer the same services nationally. The proper thing to do would be for the Government to give as many administrative responsibilities as possible to local authorities and provide sufficient finances for them so that they could effectively administer these responsibilities by levying a special level of national taxation for local government services.

If one were to compare administrative costs of semi-State or State operations to local authority administrative costs, it would be obvious that it is tantamount to economic madness not to use local authorities more. For instance, there are a number of agencies employed by the State for youth development, training schemes and industrial development, apart from bodies like the Office of Public Works who carry out the maintenance of public buildings and drainage schemes. By comparison similar types of work carried out by local authorities have been found to be more economically and effectively organised and much more amenable to local and public participation, co-operation and satisfaction.

The Government are spending a sum of £6,500 annually per unemployed person. This money would be more usefully employed if the Government examined the use of local authorities as providers of jobs. If local authorities had sums of money available to them, not alone would they reduce the unemployment figures but they would carry out improvement works in drainage, tourist facilities and development of national resources which are necessary and in turn would be of economic and social benefit and lift the depression which in recent years has beset our people.

Local authorities should be empowered to develop training programmes for a variety of schemes which would provide much needed training for young people who are denied training opportunities at present. Development of a new training programme could be organised and operated better at county level under the existing county development teams in co-operation with the vocational educational committees, the county councils, ACOT committees and IDA. If present legislation makes that impracticable, it should be amended immediately to make it workable. It costs 12½ per cent to administer schemes at local authority level; it costs three and four times that amount to administer the same schemes at national level. Local authorities need much more finance from the Exchequer than ever before. Inadequate distribution of replacement charges must be replaced urgently with an alternative simple system.

It would not be fair to ask local authorities to increase charges or introduce more charges for services, as the public are taxed to the hilt already. In 1983 water charges were estimated to bring in an income of £22 million if collected, whereas £23 million was left uncollected in motor tax evasion. There seems to be something drastically wrong here. Twelve million pounds was paid towards supplementary welfare in 1983 for a scheme in which the councils had no involvement except to pay. The sum of £15 million was paid in malicious injury claims, £1½ million was paid in courthouse maintenance and £9.792 million was spent by authorities in contributions to drainage.

I am glad to note from the Minister's speech that the National Economic and Social Council are carrying out a limited review of local authority finance. I hope that when carrying out this review they will get submissions from members of local authorities and that when the Minister receives the report he will act on it expeditiously.

Senator O'Toole when ably introducing this motion referred to statutory demands. If councils were to shed responsibility for supplementary welfare, malicious injuries, courthouse maintenance, arterial drainage and if the State forwarded advances of money, £31.6 million would be saved, water charges would not be required and the councils would be able to provide the services that are expected from them. Alternatively, if even 1 per cent of income tax and VAT were paid to councils it would mean an alternative income of £28 million. Senator O'Toole was right when in moving the motion he demanded the removal of statutory demands from local authorities. These demands are hindering local authorities in fulfilling the work of providing the necessary services that are expected from them, and unless the Government make some finances available to the councils to meet these statutory demands, the councils will not be in a position to meet their obligations.

It is obvious from the major road schemes undertaken and planned by local authorities that the staff are highly effective and efficient in carrying out such schemes. The Nass by-pass is one great example of such, and it reminds me of signs that people regularly pass announcing that a project is being grant aided by the European Regional Fund. I understand that before such a sign appears the particular county council will have been waiting a long time for the Minister for the Environment, with the permission of the Minister for Finance, to sanction this new road scheme or bridge for which the regional development moneys have been earmarked. This is another example of the frustration of local authorities in not having direct access to the European Regional Fund. The Minister and the Government should examine this.

When the Department of the Environment are allocating funds for youth employment schemes in the future, regulations concerning such schemes should be as simple as possible so that local authorities can implement really meaningful training schemes for the purpose that they see fit. The regulations should be simple and drawn up so as to ensure that meaningful training schemes for the youth can be undertaken in the summer time. Local authorities should be responsible for the provision of recreational and amenity facilities and such schemes, would be undertaken by them to great advantage.

It is frightening to think about local government planning for 1984 in view of the fact that local authorities are already carrying a debt of over £60 million into the current financial year and are expected to find an additional 10 per cent to maintain services at last year's level because of increased costs and no corresponding budgetary increase. How can local authorities even maintain services at last year's level, never mind provide additional services, with an increase of a mere 0.8 per cent? Many councils are frustrated because of such a derisory increase in the rates support grant from the Government.

As the Minister well knows, the councils are demanding that he meet deputations to discuss the grave financial problems. I understand that the Minister of State met a deputation today. He has been meeting deputations for the past week. The only publicity about these deputations is that the Minister is refusing to meet some elected members who form part of these delegations. I know that a group from one county met the Minister last week and a member of the council could not be part of the deputation, but when the Coalition partners in that county saw fit to deprive Fianna Fáil of the chairmanship of that authority they did not tell him that he should not vote but used him to ensure that Fianna Fáil would not get the chairmanship. I am referring to Frank Glynn who was not allowed into this House last week. He was not good enough to meet the Minister in a deputation but definitely found sufficient to be Chairman of Galway County Council because it would ensure that Fianna Fáil could not get the chair.

There will also be a need for a local government system run by people with local experience and intimate knowledge of local conditions. Elected members are fundamental to the survival of local government. It is they who must interpret public feeling and enliven it with leadership. If there were no elected members to interpret the wishes of local people and to give effect to policy decisions, then democracy would be in jeopardy. In this instance reform is badly needed. The local government elections were postponed this year because local government reform was being implemented. I think that local government reform was only used as a disguise, an excuse to postpone elections, because the Coalition partners, Fine Gael and Labour, were afraid to meet the electorate, knowing that if they did so they would have far less local authority membership than at present. Our county councillors who had to face the people to get elected are doing a great job.

I was disappointed some time ago when a Government backbencher, a member of the Fine Gael Party in the other House, passed some remarks which castigated the work of public representatives. I decry these remarks and would always hold these county councillors in high esteem.

Mr. O'Leary

Could we have the reference to the backbencher in the other House?

Mr. Kiely

It is on record. I am sure Senator O'Leary knows well who I am referring to.

Mr. O'Leary

Genuinely I do not.

Mr. Kiely

I will supply the reference later. It is on record. Their work should be appreciated, because they have no remuneration for the work which they do and only get expenses for attending meetings, while their work is on much broader terms than attending meetings. You could say that they are full-time public representatives. The Minister recently recognised their work by increasing the travelling allowances for councillors, but I do not think he went all the way. I feel councillors need and deserve more, and I am sure it is not beyond the capacity of local government to provide stationery, postage or telephone facilities for its members. I mean it could be provided on some limited basis. Such people may not continue to present themselves for election if their work is not recognised and especially unless they feel the system gives them scope to make an effective contribution to local government. It behoves us all to have the necessary financial and other reforms carried out by central authority so that the local government system in the future will elect suitable public representatives and officials to serve in it.

Mr. Ferris

I compliment Senator Kiely on the earlier part of his contribution as being the first effort of reform that I have heard coming from that side of the House for some time. I welcome that, because that is the kind of dialogue that we will have to set up. The Minister would welcome it in his review of local authority financing, which is a major challenge to all of us at both sides if we are to ensure that local democracy survives as we know it and want it to survive. I could not agree with him more in his compliments to the voluntary work that members of local authorities put in on a regular basis, at considerable expense to themselves and to their businesses, to represent their constituents and to try to ensure that the best possible level of service is given at local level.

I appended my name to an amendment to the original motion. I agree that an increase of 0.8 per cent in the rates support grant would not on its own be sufficient to do a lot of work necessary at local authority level. It would not be in keeping with my principles in this House just to vote against the motion and I thought it appropriate to put down an amendment which actually states the case correctly and reflects other areas of increases from the Government. They face financial constraints for which they must put some of the blame on their colleagues on the other side. They left the situation pretty tricky and there is not a great amount of money left in the kitty. In view of that, a reasonable effort has been made by the Government to ensure that local authorities are properly financed until their workings are reviewed properly and correctly and the members come to grips with their responsibilities in a whole lot of areas. I have mentioned them before in this kind of debate. Until that happens the level of increase of 10.3 per cent in the aggregate of grants and subsidies being provided in 1984 is a pretty good gesture in the light of the problems that we have to contend with. The fact that it is almost two-thirds of the level of local authority funding is indicative of the Government's concern that local authorities should continue to function in a constructive manner pending this full review.

We are faced with this dilemma in local authorities and it is one for which we can blame ourselves. Rates on domestic properties were abolished partly by one Government and totally by another Government. Water charges and other charges which were still remaining at county level were not being applied at urban or corporation level. This was an anomaly. As a county councillor I feel that the people I represent at rural level should have the same crack of the whip as people living in cities and other urban areas. There should be an across the board regulation empowering all authorities to implement the same charges.

The levels of charges were matters for councillors. How they implemented the charges and on whom they implemented them were matters for councillors but unfortunately councillors ran away from the problem and gave the power to the managers. Some of my own colleagues were also guilty of not being able to face up the responsibility of devising a scheme which would be fair on the consumers of the sanitary services. They had the power to have three or four different categories of charges for water in towns, from the poorer dwellings, the local authority housing schemes to the very wealthy mansions — of whoever lives in them — with four or five bathrooms. One finds the anomaly now because the councillors did not accept that challenge; they handed that power to the managers. Administratively the managers decided on a flat water charge for most of them, with the exemptions that we agreed in this House the day the order was made, for certain pensioners and others. Councillors to a large degree ran away from their responsibility and I do not hold with that. Either you are responsible and do your job or you are not. In many counties councillors just ran away from it and then blamed the managers and blamed the Minister for giving the manager the power. If they read the regulations they would find that the opposite was the case. I had it checked out and got it confirmed from the Tánaiste of the day. I had reservations as to why people were not implementing the proper schemes.

The Opposition also were faced with the same problem. I do not have to quote from The Way Forward because I think they have scrapped it now. Page 96 of The Way Forward stated that the matter was being examined in the context of legislation to empower local authorities to charge for services generally. I am glad they are not in power because the charges under that section apparently would have been about twice as high as they were when we tackled the problem. They also left a deficit in local authority funding when they went out of office in 1983. We were forced to put in another £31½ million to try to hold the thing together. Literally all it did was to hold it together. We did that consciously. We knew there was no way in which local authorities could have survived with the kind of restriction imposed on them.

I remember — and my colleagues across the House will remember — many a year when a limit was placed on the powers of local authorities to strike a rate. Often the limit placed on them by previous Ministers was something like 10 per cent. Inflation at that time was rampant. We have 20 per cent inflation and we had a governmental limitation of 10 per cent on the amount of rates that could be struck. That was to try to avoid local authorities making unnecessary demands at central Government level. It rebounded because, due to our inability to strike correct rates, the demands on central Government became greater under other headings.

That is why this year I was pleased to see in the budget a genuine effort being made, particularly in regard to roads, through the sum of £98 million being made available directly to councils. The problem about money coming from central Government is that we have no ability at local level to determine how and where we spend it. We are told how to spend it and where to spend it. We are unable to use it on many of the minor roads and the county roads which are now totally dependent on the dwindling number of ratepayers who are still left under the tottering system. People in small businesses, shops and factories are the only people left paying a rate. They have to carry the can for all the other services we hope to give in our counties. That is why we are faced with the dilemma of trying to get some income from some of the services that we give to people. When there was a threat of their being cut off under a previous administration because we were unable to maintain them, there was an outcry from everybody: "We are all prepared to pay for them. Could we please have them? Could we have an extension of the refuse collection into the country and we will pay so much a week?" I heard it all. When it actually came to striking a rate or making a decision along those lines, the members handed all their powers to the manager to devise a scheme because they thought politically that was a suitable thing to do.

I have reservations too about the level of block grants. The block grant system is one that we have operated for a long number of years. There are discrepancies in block grants to various councils. If they were distributed fairly around the country I would be happy. Some counties seem to do better than others. It is in the area of block grants that there is some degree of flexibility for the councillors, in consultation with their engineers. They can get useful work done within an area that is not otherwise identified specifically, like the main road grants which are 100 per cent recoupable and other primary urban roads which are 50 per cent recoupable. Those are confined to specific areas.

Senator Kiely made a further important comment regarding the inability of councils to make submissions directly to the European Parliament through the Regional and Social Funds for moneys that they could usefully employ for the development of infrastructure, particularly in rural Ireland where there is a total neglect now, because of the rating system, of the county roads that weekly we all traverse meeting our constituents and over which most of our constituents have to travel. We are neglecting those roads now because we do not have sufficient funds to maintain them. Therefore, the reform of local authority is a matter of urgency. The Minister and his predecessor in that Department have done a lot of work already, but I should like to be assured that consultation will go on with the elected members through the various bodies of county councils, municipal authorities, local authority members, county managers, county secretaries and so on. Discussion should be going on now with all of these so that we can make the correct decisions and enact legislation that will provide for the kind of responsibility that local authority members would like to have and which one would hope, they would live up to.

I am concerned also about the area of statutory demands. There is no doubt that this is an area over which we have relatively little control as local authority members. Even those of us who are on the sub-committees or other statutory bodies which are appointed by the county councils and even those involved in the compilation of statutory demands have little control but this does not take away from the anomaly that the funding authority have no power to decide what the other statutory authority can demand of them. That involves ACOT, the health boards, the vocational educational committees and in some counties the Board of Works and other agencies like that. They can put in demands which the council can find quite difficult to meet depending on rateable valuations and the system which they adopted in the past under these headings. There are anomalies, but an effort has been made in the level of increases in all the grants. Regarding the grant mentioned in the motion itself — admittedly not the kind of figure I would have liked to have seen there — I recognise that in other areas there are increases. In some areas there are some spectacular increases. In other areas there are minuses. In a budgetary situation we cannot hope to get all the money we would like at local authority level. In all our consultations with trade unions and so on in my county council reservations have been expressed about the possible risk to employment, and after having long discussions with them and with the county manager I am confident that we will be able to maintain the level of employment. If councils were progressive in the past in this area there is no doubt that they could maintain employment and can use it fruitfully in areas in which the most manpower possible should be used, and not just by the use of machinery.

The movers of the motion could accept the amendment in the spirit in which it is put forward on the basis that there is an increase. We recognise the financial difficulties local authorities are in. We hope that the review will be swift and decisive and that the necessary power to maintain local democracy will be given to the members of councils and that we will have the courage to follow that through because it would mean some form of taxation on property, whether on private houses, land or whatever in terms of benefitting from local authority services. All properties benefitting from local authority services in some way should be expected to contribute. If they are dependent on the central fund, the PAYE payer and the taxpayer in general are the people who will have to pay for all the services. We can never put enough money into the central fund to be able to satisfy the demands of all the county councils throughout the country.

I respectfully suggest that the amendment is a reasonable one. It sets the record straight, and I hope that the movers of the motion will accept it in that spirit.

Mr. Mullooly

I support the motion:

Almost every local authority are in a disastrous financial state. However, there are rumours, and I gathered from what Senator Ferris said that he is aware of those rumours, that a few local authorities have received more favourable financial allocations than others. If this is true I can only guess at the identity of these local authorities and the reason for the special treatment they have received. I am sure the Minister is aware that these rumours have caused widespread dissatisfaction among local authority members in the less-favoured areas. It appears — and Senator Ferris seems to bear this out — that there is a certain amount or may be a good deal of truth in what is being said. I would be interested to know, for example, what the percentage increase was on last year's allocation for the Minister for the Environment's own local authority.

Mr. Ferris

Would the Senator not do the same himself?

Mr. Mullooly

As the proposer of the motion stated, the Local Government (Financial Provisions) (No. 2) Act, 1983 is the major cause of the financial problem now being experienced by local authorities. Prior to the passing of that Act local authorities were compensated in full for the relief from rates granted on domestic dwellings and agricultural land. Admittedly in the 1978 Act the Minister was given the power to limit the amount to be provided in the rate poundage, but the agricultural rates relief grant and the domestic rates relief grant which were paid by the Department each year to local authorities were based on the rate in the £ and consequently they increased each year by the same percentage as the rate poundage.

The new arrangements brought in by the 1983 Act mean that there is no longer an obligation on the Minister to recoup to local authorities a specific amount in lieu of domestic rates or agricultural rates. The Minister now has discretion in regard to the amounts to be paid to local authorities. The domestic rates relief grant and the agricultural grant paid to local authorities are no longer determined by reference to the rate in the £ but are decided by the Minister. In my own county of Roscommon, if the grants this year were based on a rate in the £ of £21.67, which was the rate recommended to the county council by the county manager and which showed an increase of 10 per cent over the 1983 figure of £19.70 in the £, the total of both grants would be £7.384 million in the current year whereas on the basis of an increase of 0.8 per cent on last year's figure these grants will amount to only £6.199 million. The shortfall is £1,185,000. In a predominantly agricultural and rural county like Roscommon it is impossible to make up that shortfall from other sources of revenue.

The 1983 Local Government (Financial Provisions) Act conferred on local authorities a general power to charge for the services they provided. We were told at the time that this power would enable local authorities to raise additional revenue, and this was presented in such a way as to convey the impression that as a result of these service charges local authorities would have more money to spend. I pointed out at the time that the service charges were being introduced to bridge the gap between the grants that the Minister would provide and the amounts which should be provided and which were heretofore being provided in lieu of rates. What has happened since has proved that my analysis of the situation was correct except that in the case of the majority of local authorities the revenue raised by the service charges is not sufficient to go anywhere near bridging the shortfall which arises from this year's allocation. It was made quite clear from this side of the House during the debate on the introduction of the service charges that we had no objection to the principle of such charges provided they increased the revenue of local authorities and enabled the services being provided by local authorities to be improved and expanded

Senator Ferris tried to give the impression that we were opposed to the introduction of service charges. We were in favour of the introduction of service charges provided those service charges supplemented the income of local authorities.

Mr. Ferris

Did the Opposition not vote against them throughout the country?

Mr. Mullooly

We pointed out then, and this has been borne out by what happened subsequently, that the revenue which was raised from these service charges was used to relieve central government of its obligation to provide full recoupment to local authorities for the relief of rates on domestic dwellings and on agricultural land. Since that is what has happened and since that is what we anticipated would happen I think it was quite fair, honest and accurate to describe the imposition of these charges as the introduction of rates under another guise. Most local authorities are heavily dependent for the funding of their operations on the amounts received by way of the agricultural grant and the domestic rates relief grant. This is particularly true of local authorities in counties which are predominantly rural. The scope for the introduction of service charges in such counties is limited and the amount of revenue which can be raised by way of service charges in such counties is limited.

In the case of such counties, to describe the increase of 0.8 per cent in the agricultural land domestic rates relief grant as derisory is not an exaggeration. When this increase of 0.8 per cent is considered in the context of an inflation rate of approximately 10 per cent last year and a projected or anticipated inflation rate in the region of 8 per cent in the current year, derisory is the mildest word one could use to describe the increase. Consequently, the vast majority of local authorities find themselves with no option but to cut back drastically on services. In many cases employment will suffer and will suffer seriously. The circular dated 22 December 1983 and issued by the Department of the Environment to local authorities notifying them of the 0.8 per cent increase went on to state:

The public service estimates for 1984 reflect the tight financial constraints within which public agencies must operate in consequence of the serious economic conditions. It is essential that local authorities subject their expenditure programmes to the tightest possible scrutiny so as to eliminate waste, promote cost effectiveness at all levels and ensure that the available resources are deployed to the best possible advantage.

Every public representative and every local authority member is conscious of the current economic conditions. I also believe that many Government Departments could learn a lesson from local authorities as regards the way in which they subject their expenditure programmes to the tightest possible scrutiny so as to eliminate waste, promote cost effectiveness and ensure that the available resources are deployed to the best possible advantage. Yet the Government have allowed an 8 per cent increase in current Estimates for Government Departments as against the 0.8 per cent increase allowed to local authorities. It is no wonder that the Government shied away from holding the local elections which were due to be held in the current year.

Many speakers, including the last speaker, have referred to the burden placed on local authorities by the many statutory demands which they have to meet on an annual basis and which in many cases have increased substantially in recent years. I was pleased that the Minister stated in his address that it is his intention to have these statutory demands examined urgently in the context of the review of local government. There is a limit on the demands which can be made on local authorities by committees of agriculture and vocational educational committees but it is impossible for any local authority to know where they stand in relation to the statutory demands from the health boards for supplementary welfare allowances. Here again local authorities are unfairly treated by the Government, since decisions to grant increases in supplementary welfare allowances or increases in the free fuel scheme are Government decisions but the increases have to be partly funded by the local authorities. This arrangement means that each year local authorities are presented with revised demands towards the end of the year which they have no choice but to meet. This is a most unfair and unjust arrangement, and it needs to be changed as a matter of urgency.

Down through the years local authorities have made a major contribution to the development of this country. They have provided essential services and infrastructure. They have created employment for large numbers of workers. If local authorities are to continue to serve the needs of the country and of the local community as well in the future as they have done in the past, the Government will have to face up immediately to the serious financial difficulties with which these bodies are now confronted. In due course they will have to come up with realistic proposals for local government reform. These proposals will have to be implemented as a matter of urgency.

Mr. Belton

I am sure the Opposition in tabling this motion did not do so in the hope of presenting the Government in any favourable light but rather hoping that the Government would be embarrassed or shown to be shying away from their responsibility with regard to the financing of local government. If this was their purpose in tabling this motion I would suggest they are in for a rude awakening. Far from the Government being embarrassed in any way or making any effort to shy away from or shun their responsibilities in this matter, the Minister expressed his gratification and his delight that this motion enabled him to examine the position and to explain in detail exactly what the position was. I know that the Opposition will try to belittle the efforts of the Government in this regard. However, the Government themselves feel that there was much more that they would wish to do if they were in a position to do so but due to the present recession and the present economic position in the country generally, it is only fair to say that they have gone as far as they could in trying to remedy the position with regard to local government finances and to put them on a proper basis. This year they took sufficient steps to try to ensure the continuation of services at the existing level and at the same time to maintain employment at the same level. They have been reasonably successful in this. It is entirely wrong to say that the Government are not fully aware of the need for the restructuring of local government finances. Indeed we do not need to say it, though Senator Mullooly would try to attribute other reasons to the Government for postponing the local elections: their reason was the recognition of the necessity not alone to restructure the finances but for the complete restructuring of local government. For example, in the Dublin area we have the town of Tallaght which in the not too distant past was a mere hamlet. I read only last week that several people remember when it had a total population of 352 people. The population is now 60,000 and it is envisaged that in the near future it will rise to 90,000. This shows the remarkable change which is occurring in Dublin and the need for regular and periodic revision of the total structure of local government.

The Government are fully aware of their reliance on all local authorities with regard to the matter of giving effect to housing, road development, provision of infrastructure and in dealing with planning matters and services generally. They are also aware of how much the local communities look to those local authorities and rely on them. It is sufficient to say that we can gauge the importance of those local authorities from the fact that in 1983 the Government provided £1.4 billion in capital and provided employment for 35,000 people.

In very difficult times, such as the present, when everyone knows the need for curtailment and saving in all matters, there is a very serious problem with regard to local authorities due to the fact that rates have been abolished in the fairly recent past. We heard that all parties agreed to the abolition of rates, particularly the two main parties, and that therefore this cannot in any way be regarded as contributing towards the present position with regard to local government finances. Our party were the first party to advocate the abolition of rates. As far back as 1963 our Ard-Fheis passed a resolution to remove the health charges, as a start, from the rates. Indeed, we all know how long it took the party on the opposite side to realise that domestic rates could be abolished. In 1972, the then Government, now the Opposition, issued a White Paper saying that rates must remain as the basic method of providing finance for the local authorities.

This was their attitude then but in the 1973 general election when Fine Gael advocated the partial abolition of rates the then Government said it could not be done. It was only by way of a very hasty decision on their part in the midst of the election that the late George Colley made the announcement that not alone were they going to give partial relief of rates but they were going to give total abolition. So great was the conversion that it could be compared to the conversion of St. Paul on the road to Damascus. Their own supporters were taken completely unaware. I am sure country Senators will appreciate that it is necessary to send in advertisements early in the week for inclusion in the provincial papers on the Saturday. In one rural constituency there had been sent in to the paper on behalf of Fianna Fáil a notice saying that it was all nonsense and all propaganda on behalf of Fine Gael to say that rates could in any way be eased out and urging the electorate not to be taken in by this, but in the mid-week Fianna Fáil announced that they would abolish rates. On the following Saturday the notice appeared in the paper concerned saying that it was nonsense to think anything could be done at all. That will give an idea of the haste and the ill-conceived way in which they dealt with it so while it is true to say that both parties advocated the abolition of rates there was an entirely different approach in both cases. On the one hand, our party only advocated the gradual abolition of rates and the replacement by an alternative method. It was all fully considered and thought out, whereas the Government of the day just rushed in in an effort to salvage something when they felt they were in danger of defeat.

The Coalition Government of 1973 had given a guarantee that during their term of office they would gradually abolish rates in various stages and in fulfilment of that policy they had granted a 25 per cent removal of rates by the time the 1977 election came about. Fianna Fáil, when they came back to power, were forced to honour their commitment so in 1978 rates were abolished without there being any effort to work out a reasonable, fair and workable alternative. It is true to say that to a certain degree the ill-conceived and hasty method of the removal of rates contributed in some part to present conditions.

Since then the Government have been committed to the recoupment of rates which would normally be levied on local residents. However, year after year the amount fell short of the sum required and we had the position where the Government decided how much they would give and that was far short of the amount required. The local authorities were powerless to decide how to solve the discrepancy that was created. In 1982 the discrepancy between what the Government gave and what was required had amounted to £10.7 million.

In 1982 the Government of the day had prepared the Estimates for 1983 and they showed absolutely no increase in the amount available from Government sources. However, after the change of government the Coalition Government felt that, despite the stringent circumstances prevailing, and despite the recession, something had to be done about this, and they provided £31.5 million. While Senators on the opposite side of the House may lament the lack of funds at present, it is easy for them to envisage what the position might have been had this £31.5 million not been provided — which was their policy. The Government may be, and indeed have been, criticised for the removal of the commitment to recoup the full amount of rates. The Minister no longer has responsibility to give full recoupment. This has long been the case. In theory it was supposed to be given, but in actual practice for a long time it fell far short. Senator O'Toole told us that the increase was 58 per cent while inflation accounted for 74.4 per cent.

While this Government are fully aware of the fact that they have not done everything they would wish to do, they are also fully conscious of the need for total reform. Dublin City Council caters for 11 areas, each of them the size of a normal Dáil constituency. Therefore, the need for reform in the Dublin area is great, as I am sure it is in other parts of the country. It behoves members of the Opposition, some of whom say they are entirely opposed to local charges and others that they agree with local charges but not the present local charges, to offer an alternative. Instead of complaining about the shortcomings of the Government, they should realise that in present circumstances the Government have done all they could and are fully conscious of the need to do much more in this line. They should offer constructive suggestions for the complete reform of the system of local government.

I know he is slightly antagonistic towards me. It is not personal, but he probably knows that I have a different view as regards the future of local authorities. The powers given to county managers at the moment are excessive. Local authority members are nothing more than rubber stamps in the provision and running of county services. Last year when the Minister introduced the Bill in this House and in the other House allowing the imposition of charges, he gave power to the managers to do so if the local councils would not. The local councils were right in most cases in refusing to do the Minister's dirty work for him. The intention was to supplement the reduced income to local authorities from central funds. This year the rates support grant given by the Minister to the local authorities was .8 per cent. Somebody referred earlier to some of the lavish allocations given to other counties. I wonder would any other county with the exception of mine take a 50 per cent reduction in the amount of money allocated for house construction in the coming year? We got a 50 per cent reduction, not allowing for inflation.

We must also look at the road grants. Our roads are being allowed to deteriorate. We have new EEC regulations which we are bound to implement. The net result is that our roads are being forced to carry a weight of traffic which they are not able to carry. We need massive injections of money if our road surfaces are to be maintained at any sort of reasonable standard. Probably the Government will construct a number of national primary roads which will act as links to the dirt roads we will have in the next few years. Roads which were black-topped down through the years are now reverting to dirt tracks due to the lack of Government money to maintain and repair them.

On a point of order, Senator Ellis has misquoted the Government's action on the 1983 Estimates. He said the Government accepted the estimates, which we did not: We added £31½ million to them.

Acting Chairman

That is not a point of order.

Mr. Ellis

Senator Ferris is worried about that £31½ million which was supposedly not included in the Estimates prepared by Fianna Fáil. If those Estimates were wrong. I am surprised that the Government's Estimates came out so well. We heard prior to the budget this year that the Minister for Finance had done a good job in the previous year.

I was talking about the number of local authorities waiting to meet the Minister. The Minister of State will soon be up at night meeting them on behalf of the Minister due to the fact that the Minister is busy. They are all going home with one arm as long as the other after their meetings. The Minister has told them that the Department of the Environment is not in a position to give them any further financial aid.

There is also the question of the amounts of money being allocated for local improvement schemes. In my county we had a reduction of 27 per cent on the 1983 allocation. Add 10 per cent inflation to this figure and it is very close to the 50 per cent mark, which means that this work, which is very necessary to provide rural areas with a reasonable standard of roads, will be slowed down due to Government action. Large amounts of the money used for local improvement schemes came to the Government via the EEC. Further EEC funds which would have been available to us will not now come here due to the fact that the Government are not prepared to back up the allocations.

I have one last suggestion to make to the Minister of State to convey to the Minister. Will he ask the Minister to go to the Minister for Social Welfare and get him to transfer some of the money being paid in unemployment benefit to the local authorities to allow them to employ a larger workforce to try to improve our roads, work such as the cleaning of culverts and trimming of hedges?

I fully support the motion. People on the other side of the House who say their amendment is a compromise are only kidding themselves.

Mr. M. O'Toole

I regret very much that the motion we submitted here in all sincerity is not acceptable to the Government. It gave the Minister a real opportunity to give a comprehensive report in this forum to the many local authorities throughout the country who are in dire need of aid. I protest at his procedure of coming before the House with a prepared statement and with his mind made up. That is regrettable. He should have listened to the debate and then replied, as was the practice in this House for many years.

It was necessary to put down this motion to bring to the notice of the Government the serious constraints on local authorities. I regret that the Minister came in with a prepared script, read it out and walked away from what is his only responsibility. We asked the Minister for an extension of the statutory period to enable county councils to meet him to discuss their problems.

While some Senators who are not members of local authorities may feel that the same problem applies in each local authority, that is not correct. Each local authority has its own difficulties. In County Mayo if we met the demand of our county manager we would have a rate of over £30 in the £, whereas in the midlands, in Meath, Carlow and Kilkenny, the demand is in the region of £15 to £18. People in some of the western counties are asked to pay considerably higher rates than people in other counties. There was no mention in the Minister's speech about rates equalisation and I think that is on the cards. He mentioned reform and restructuring of local government financing, but there was no mention of rates equalisation. We will have to have a hard look at that.

If the IDA sell an advance factory in Mayo to an industrialist, regardless of where he might come from, he will have to pay £12 to £14 in the £ more than he would have to pay in Meath, Kilkenny or any of the other midland counties that have a reduced rate. That is a fact and I defy contradiction. It is very difficult to sell that to an industrialist, even though in our county we give a concession of two-thirds remission of rates over a period of ten years. That is the penalty we are paying. If we removed the two-thirds remission of rates to industrialists — Senator O'Leary is nodding his head — he will have to check his facts——

Mr. O'Leary

If I could help the Senator, in the western counties the valuation put on the building would be considerably lower than in the rest of the country. So the amount of money being paid in the western counties would actually be less.

County councils throughout the country are now trying to strike a rate. The other night in Mayo we failed to strike a rate after four meetings, and we have until Friday night to finalise our rate. We thought we would have a meeting with the Minister beforehand and that we would be in a position to assess the result of that meeting. That did not happen and I regret that very much as indeed do many local authorities who are trying to meet their demands. We even put forward a resolution last night for a charge on calls to the fire brigade to try to recoup some money. We suggested that a small fee would be charged depending on whether the fire brigade was called to a private house, an industrial or commercial building. That was a proposed change. It is not fair to say we have offered no alternative to the system in operation at the moment. My good friend Senator Belton made a very good case about the history of the abolition of rates and I do not want to disagree with what he said. He made a fair contribution on how we arrived at the abolition of rates, but he spoke about haste. Possibly we jumped the gun on the Fine Gael Party on that occasion and that is what he was talking about. We claim credit for that. It was not as a result of that decision that we are in this predicament. It is as a result of the Finance Act passed in March 1983. Every county manager now has two alternatives. One is to go back over their programmes and reduce their estimates if the county council do not agree and if there is a shortfall. The other is to increase charges. This is the first time any county manager has had the power to increase charges under the new Finance Act. Last night we proposed a resolution with a shortfall of £72,000 in Mayo. The manager would have had two alternatives to resolve his position: to re-address himself to the programme presented and to his estimates, or to increase charges. It is not fair to say that everything that happened to the local authorities was the result of the abolition of rates on domestic buildings.

In conclusion, I regret very much that the Minister has not given us any green light. He came in here with a prepared statement. Early in the debate, without listening to what Senators had to say, he had his mind made up. My proposals were that the statutory demands would be removed from local authorities, namely, the OPW statutory demand, the health statutory demand, our commitment to courthouses, malicious damages and other statutory demands. It would relieve the local authorities considerably if they were abolished. I regret that he did not give us any green light. If he could give us an idea as to when local government reform which has been talked about for ten to 12 years would come about, people in local authorities would have patience. I do not think there is any light in the tunnel with regard to local government reform. Neither do I think there is any light in the tunnel with regard to the restructuring of local authority finances.

The Minister, Deputy Kavanagh, inherited this and that is the only score I will let him off on. He inherited the position because the people who brought about this plight are not in that Department any longer. They left the Minister to carry the baby. I accept that he is trying his best but he is not here to reply to the Senators who have made very useful contributions.

An Cathaoirleach

The Senator, as the mover of the motion, has the right to reply. If I deprived the Senator of that right he would be very annoyed with me.

Mr. M. O'Toole

The Minister should have waited until Senators had made their contributions to make his case, whether off the cuff or by script. We would have accepted it at that stage. He is capable of speaking. It is regrettable that local authorities even as a result of this motion will not be any better off or wiser. I have not been told when reform will take place or when we can expect the financial restructuring of local government finances.

Amendment put.

The Seanad divided: Tá, 28; Níl, 15.

Tá

Belton, Luke.
Browne, John.
Bulbulia, Katharine.
Burke, Ulick.
Conway, Timmy.
Daly, Jack.
Deenihan, Jimmy.
Dooge, James C.I.
Durcan, Patrick.
Ferris, Michael.
FitzGerald, Alexis J.G.
Fleming, Brian.
Harte, John.
Higgins, Jim.
Hourigan, Richard V.
Howard, Michael.
Howlin, Brendan.
Kelleher, Peter.
Lennon, Joseph.
Loughrey, Joachim.
McAuliffe-Ennis, Helena.
McGonagle, Stephen.
McMahon, Larry.
O'Brien, Andy.
O'Leary, Seán
Quealy, Michael A.
Robinson, Mary T.W.
Ross, Shane P.N.

Níl

Cassidy, Donie.
de Brún, Séamus.
Ellis, John.
Fallon, Seán.
Fitzsimons, Jack.
Hanafin, Des.
Honan, Tras.
Hussey, Thomas.
Kiely, Rory.
Lanigan, Mick.
Lynch, Michael.
Mullooly, Brian.
O'Toole, Martin J.
Ryan, Eoin.
Ryan, William.

Tellers: Tá, Senators Belton and Harte; Níl, Senators W. Ryan and de Brún.

Amendment declared carried.

Motion, as amended, agreed to.

Seanad Éireann debate - Wednesday, 21 Mar 1984

Local Authority Financing: Motion (Resumed).

Acting Chairman

Tá

Níl

Seanad Éireann debate -
Wednesday, 21 Mar 1984