Before I call on Senator Brian O'Shea I want to remind Senators that in accordance with the Order of the House the speech of the proposer of this Motion shall not exceed 20 minutes and each speech after that ten minutes.
Local Authority Funding: Motion.
I move:
That Seanad Éireann, conscious of the dire situation of local authorities throughout the country in terms of the services that are provided, calls on the Minister for the Environment in the preparation of the estimates to provide funding to remedy the present crisis.
Go raibh maith agat, a Chathaoirligh. Like the Minister, Senator Ferris and I arrived here at very short notice. We were prepared to take this motion at 6 p.m. but events overtook that. I am a member of three local authorities; a city council, a county council and a town commission. I should like to deal with the three different bodies to illustrate what we are getting at in this motion. When rates were abolished in 1977 the rates support grant was put in place, in order to reimburse local authorities in full for what they would have got by way of domestic rates. Up to two years ago the increase was by way of an increase on the base figure of 1978. There was a built in injustice in that for local authorities because if you take, for example, Waterford Corporation, of which I am a member, about 1,000 new houses have been built in the city since 1978. There was a built in injustice in that those extra houses because the rates support grant was based on the number of houses in the city in 1978. Last year, there was a catastrophic cut of 9 per cent in the rates support grant, followed by a 14 per cent cut this year. This was particularly injurious for Waterford Corporation, whose staff had been somewhat in decline since the late seventies. The area of the city was increased fourfold when the borough boundary was extended. At that time, Waterford Corporation had 200 outdoor men but that figure is now below 150. Huge problems have arisen because of that. The corporation have responsibility for more roads but there is absolutely no possibility, with present funding, of dealing adequately with these roads.
A further blow to local authorities was the Supreme Court decision in 1983 that the PLV system was unconstitutional in terms of assessing the liability of farmers to pay rates. The Supreme Court decision did not in any way deal with whether or not farmers were liable to pay rates; it only found that the PLV system was an unconstitutional way of assessing their liability. The rates support grant was then put in place for agricultural rates and that has cost something in the order of £120 million since then. The previous Government sought to redress the situation by bringing in a land tax. The land tax was to apply to farms under 80 adjusted acres and farmers would pay £10 per acre with no further taxation. Farmers who had over 80 adjusted acres would be liable for tax but the land tax would be deducted from their total tax liability. The rates support grant for agricultural rates was cut by 9 per cent in 1987 and by 14 per cent in 1988.
With regard to Waterford County Council — and one can only speak about what one sees on the ground — 62 outdoor employers have availed of the voluntary redundancy scheme offered by the Department. I live in the town of Tramore which has a population of 6,000 people. There are only two outdoor cleaning staff for the whole town. Tramore is a very busy seaside resort; indeed, it is the primary resort in the country, and the cleaning of the town is proving to be a huge problem because of the reduced level of staff.
The next area I should like to deal with is the area of housing. In late 1987, Waterford Corporation had well in excess of 418 housing applicants. Yet no houses were started in Waterford in 1987, nor will any houses be started there in 1988. Not alone is this tragic for those who are on the housing list but it is tragic also in terms of the rejuvenation of the city. A great deal of work had been done on urban renewal in Waterford city and very exciting plans were in the process of coming to fruition but it is now impossible to go ahead with these because no money is being provided for local authority housing. At the end of 1987 Waterford County Council had 106 applications for houses. Throughout the eighties, 50 houses a year had been built in the county but there will be six houses only started in the county by the end of the year. There is enough money there to get them started.
I want to refer to those who have an income of less than £10,000 who, in the normal course of events, would not get a local authority house. Last October the Government removed the subsidy so that now instead of the loans being provided by local authorities at fixed interest, the interest on these loans will fluctuate with the market. If we take a maximum loan of £21,000 and the highest rate of interest and the lowest rate of interest which obtained in the eighties, there is a swing of £90 per month in the repayments on such a loan. This change has made it very difficult for people who earn less than £10,000 a year to avail of loans and I believe this is further worsening the crisis.
A general point that needs to be made here is the erosion of local democracy. The local health committees have been disbanded but, more important, in the context of local authorities and the changes that will come about in the structural funds of the EC in 1992, the regional development organisations have been disbanded. The South Eastern Regional Development Organisation were disbanded yesterday and my colleague, Senator Ferris, was at that meeting. The changes that are coming about in Europe mean that we are now moving towards programmes rather than projects and the regional dimension is becoming much more important. The Government have seen fit to disband the only organisations who provided a forum for local authorities to discuss problems of joint interest and to come up with programmes for dealing with them.
The number of VECs are to be reduced. We are told that they will be reduced from 38 to 20. The county committees of agriculture — and there was a strong debate on this matter last week — are also gone. Last weekend I attended the annual general meeting of the General Council of County Councils in Athlone. The Minister was at that meeting and he addressed it the first morning. The one thing which struck me when I was talking to councillors is how demoralised councillors are at present.
That is not true.
That is absolutely true. People said they would think twice about standing for election again because it is such a no-hope area at present.
Not our people.
Yes, your people Senator Lanigan.
Senator Lanigan will be allowed to make his contribution in a few moments. Senator O'Shea to continue.
With regard to the various services that are provided by local authorities, be they roads, houses or whatever, local authority members feel impotent nowadays to act on behalf of their clients. There is a demoralisation, not alone among elected members, but also among the staff. The much wanted developmental role of local authorities, which the Government spoke so much about in their manifesto for the 1985 local elections, is now virtually diminished. This is terribly important in terms of tourism because, for instance, our fine archaeological remains, scenic picnic parks, roads and so on, are part of what tourists look for. Urban renewal housing has virtually come to a stop and local authorities cannot deal as effectively with beautifying our environment.
The Minister for the Environment is verbally solving all the problems around the country, be they fish kills or river pollution. They are grandiose aspirations but the actual resources to back them up are very scarce. Our beaches are being polluted because of sewage disposal but there is no money for new sewerage schemes because the capital programmes of local authorities have been very drastically curtailed and diminished by the Government. For the past two years no small sewerage schemes have been undertaken in rural areas in my county council area.
The major local authorities, county councils, urban councils and county borough councils are being diminished in terms of resources and staffing. We have been told that local government reform is on the way. We have heard much about that but one wonders, for instance, about the future of small urban councils, whose staffs have been diminished by the cutbacks, and the future of town commissioners. If these bodies are abolished — and some commentators would have us believe that is the intention of the Minister — this will be further erosion of local democracy.
The fundamental point is that, if local authorities are to prosper and play a meaningful role, the wherewithal must be provided. The wherewithal is not being provided at present and the Government have actually brought in a cut in the rates support grant for the first time since 1978. As I outlined earlier, a cut of 9 per cent was followed by a dramatic cut of 14 per cent. If the Government seriously tackled the problem of a land tax — in other words if farmers who previously paid rates now had to pay a land tax — this would be a very important source of revenue for local authorities.
In a survey carried out some months ago on behalf of the ICMSA by a very reputable organisation, it transpired that two-thirds of farmers would prefer to get an alternative to accounts and to be on a land tax. Figures suggest that last year the total take from the farming community was £35 million whereas they paid £30 million to accountants to process their forms and a further £10 million was spent by the State in administering and dealing with their applications. We are talking about £40 million going on administration and £35 million coming back in revenue. This is ludicrous and is a terrible waste of resources.
A very notable feature of the rates book of my county council is that small farmers were not alone good payers but were very prompt payers of agricultural rates. I believe that if a land tax was introduced and paid to local authorities, in addition to present forms of funding, there would not be any great resistance by the farming community, and certainly not the smaller farmers. It would have the merit that the farmers who pay this tax would be able to see at close hand what that money was achieving. They would also be in a much stronger position to lobby and make representations to those on the local authorities who make the decisions on how that money should be spent. I ask the Minister to consider this proposal because this extra revenue could be very important to local authorities in terms of giving back hope, not alone to public representatives but to officials also.
The situation is in so much chaos and decline at present that one worries about the future of local government. The style of the Government is to remove bodies which tend to be platforms for criticism of central Government. I referred to this earlier. The whole thrust seems to be to reduce the democratic element in local government, in the health services and in the educational services. It is absolutely incumbent on the Government in terms of tourism — which the pundits tell us by the year 2000 will provide the major number of jobs in this country — to give the local authorities the wherewithal to assume a dynamic role in the promotion of tourism. Waterford Corporation at present avail of the scheme of incentives for commercial urban renewal which were announced by the previous Government and have succeeded in bringing to Waterford city a developer who is about to provide a very exciting shopping development in the city centre.
A Kilkenny man, thank God.
Waterford City Council have been undertaking an archaeological dig and some very important artefacts and evidence have come to light. For instance, it has been discovered from the material that had been dumped in that area that during Viking times Waterford was a thriving city and much more prosperous than was realised. The archaeological remains which have been found in Waterford are not alone of national importance but of European importance and will be incorporated into the commercial redevelopment in the city. Unfortunately, funding to carry out the archaeological dig to the best effect has not been available. Many of the very exciting plans Waterford Corporation had in terms of developing Waterford as a tourist centre have been frustrated because year after year the amount of money available to the city council has been diminishing and, in particular, the number of staff in the city council have been greatly diminished this year.
In proposing this motion I call on the Minister to realise that local authorities provide a framework for local democracy and for the feeding through of the views of constituents and other people. More important, they provide a forum for development, in particular in the tourism area. Because of the number of potholes and the many miles of road which will not be looked at in the foreseeable future, our road system is virtually falling apart in many parts of the county. I will conclude by earnestly requesting the Minister to tackle seriously the provision of adequate funds to local authorities to fulfil their roles.
In seconding this motion on behalf of the The Labour Party I want first to welcome the Minister of State to the House. We regard the preparation of the Estimates as very important. I want to put on the record my appreciation of the assistance given by the Minister's Department following representations which were made to them.
Unfortunately, today we are criticising the Government in the area of local authority funding. As local authority members many of the Members on both sides of the House are acutely aware of the major problems facing local authorities. This view is shared by members of the General Council of County Councils, the municipal authorities of Ireland and any other statutory body who have an all-Ireland dimension. Members of local authorities who were duly elected feel frustrated because they are unable to tackle many of the areas they were able to tackle in the past when they had a certain degree of independence in relation to funding.
Since the abolition of the rating system, and in particular since the abolition of domestic rates and agricultural rates, local authorities had to depend totally on the generosity of the Government of the day for their funding. They had to rely on charges which were brought in by legislation, on rates which now remain with the business sector or small shopkeepers and on increased local authority rents which have gone up considerably in the past year and a half. Local authorities have a responsibility at local level, not alone because they provide the services for which they have a statutory role, but also because they are major employers. Many have been put on short time and, but for the ingenuity of local authorities in availing of the social employment scheme, it is likely that local authorities would be unable to carry out much of the work which is now being done by employees under this scheme.
This scheme was never designed to replace permanent workers in local authorities but was intended to add a social dimension to their work. However, county councils have used this scheme and some of their permanent employees act as advisers and supervisors on these schemes. From that point of view we welcome that scheme. However, when proposals come up before the national monitoring committee on the social employment scheme, local authorities are faced with the dilemma of trying to convince the trade union movement that this scheme is not being used or abused by local authorities who are in a desperate state as regards funding. That is why we reject out of hand the amendment to our motion which starts off with the normal Government accolade about restoring order to the public finances.
The Minister for the Environment said publicly that he is anxious to give a certain amount of autonomy to local authorities in their funding which, of course, would not interfere with the public finances, as we understand them. However, the Government's stated policy when they were in Opposition was — and I quote from The Irish Times of 29 May 1985 on the run up to local elections:
Fianna Fáil's manifesto stresses that local authorities should:
Assume the role of local enterprise agencies as a means of tackling unemployment; receive greater powers; have their finances reformed, with local water and service charges abolished as soon as Fianna Fáil returns to Government or through decisions on local authorities where Fianna Fáil have a majority.
That is a newspaper interpretation of the Fianna Fáil manifesto. However, the manifesto states:
Fianna Fáil will restore financial stability to Local Authorities by repealing the Coalition Government's Local Government Financial Provisions No. 2 Act, 1983. This has had a devastating effect on the ability of Local Authorities to maintain existing services and gave County Managers the power to levy services charges to reduce Exchequer funding of Local Authorities...
That is what the Government said when they were in Opposition. Unfortunately a signatory to that document has since left the Government party. I hope that the Minister, having stayed with that party in Government, will live up to those promises made in the manifesto, considering the success that he had in those 1985 elections. The Minister received support on the understanding that the public accepted that he would change everything with regard to local authority funding. The reality is that, not alone did the Minister retain these awful charges that he condemned in Opposition, but he actually forced members, including his members, of local authorities to vote for them at estimates time and to increase them out of all proportion.
At estimates time county managers have to tell people like myself and Senator Brian O'Shea, who are members of several local authorities, that we are faced with the dilemma of increasing these charges or reducing services beyond recognition. Local authorities have a major statutory obligation at local level. Even though they have limited powers local authorities are elected to do a job and this includes the provision of sanitary services, housing, roads and all the other structures which are now suffering as a result of a lack of funding. For instance, public housing in most authorities areas is now at a standstill. The allocation of funding this year will only complete the start that took place last year. There is relatively little additional funding for any new starts.
Some limited new starts have been approved in County Tipperary for 26 council houses. In Tipperary Urban Council, apart from finishing the existing scheme, we have no new funds available for building new houses. I want to put on record our appreciation of the allocation of funds to restore some of these low-cost houses to some semblance of being fit for human habitation because they were generally falling to pieces and people living in them were being rehoused anyway. It is good economics either to demolish them or to rebuild them and I am pleased the Government have decided to rebuild them.
In the area of roads, where there is a Government allocation for primary routes, in particular, the national primary route has got a certain element of EC-assisted funding. We have by-passes, which are a necessary part of the road structure, but the county roads and the non-route roads which are now totally dependent on the striking of the rate are in a desperate condition. I do not know if the Minister for the Environment is aware of these potholes in county roads and non-route roads. Obviously he is travelling the national primary routes which may give the impression that there are no potholes in parts of rural Ireland. The opposite is, in fact, true. We are disappointed that not alone have the Government not lived up to their promises to reorganise and restructure local authorities and their finances and make them into local development agencies which would be in accordance with all our hopes and understanding as members, but they are also removing local bodies like county committees of agriculture, local health committees, SERDO and all these other fora where local inputs were available at very little cost to either the council or the Exchequer.
The Government have forced the abolition of those bodies by various Acts, taken out Acts, taken out local democracy, as we understand it, and put the survival of small local authorities like urban councils and town commissioners in jeopardy. Members of those local authorities, including the Fianna Fáil members, are extremely concerned that, apart from a stated commitment by the Government to do something there is relatively little evidence of this happening on the ground. In the preparation of the Estimates, we understand there is a projected cut of some £500 million in additional funding from the Exchequer. If this is true obviously local authorities will suffer further unless the Minister lives up to his commitment to allow them some degree of autonomy in regard to their own financing.
We are extremely concerned that members' ability to meet has been reduced, by direction from the Department, by about 27 per cent. Why should local representatives be unable to meet when they want to meet to develop and improve their counties in consultation and in conjunction with the Government? The Minister knows from being a member of a local authority of the commitment of local elected people to their county area. It is a tremendous local structure and it is one for which EC funding should be available. The Minister's party said it should be available and we hope he will ensure that local authorities, in relation to this new programme for financing from the EC running up into 1992, this integrated programme and the policies in the new Community, as we understand it, will have an input in looking for funding and that the Exchequer will not take that money into the national purse for distribution for political or any other reasons. Usually the application is made for the best of reasons.
We are dissatisfied with the past two years' history of allocations to local authorities and we are now asking the Minister, in preparing the 1988 budget running into next year, to have regard to the views of Seanad Éireann in this regard.
I move amendment No. 1:
To delete all words after "Seanad Éireann" and substitute "conscious of the need to restore order to the public finances, notes the steps that have been taken to maintain a satisfactory level of essential local services through the provision of adequate central funding for local authorities."
This is a very important motion and it is a pity, in a sense, that the time is so restricted and that we cannot elaborate on any aspect of it.
With regard to the rates support grant, I do not think we can blame any Government in particular and while we might criticise and, indeed, go into details, it does not serve any useful purpose. Perhaps we can use it as an experience on which to build in the future.
Senator O'Shea spoke with considerable enthusiasm about the land tax. I was one of those who saw some very positive aspects in the land tax. At the time I was quite enthusiastic about it, as I come from a rural community and I am involved to a large extent with small farmers. Nevertheless, at that time representations were made to us by all the farming communities and by farmers in general.
I attended a monster meeting in Beechmount Hotel in Navan where farmers were protesting against the land tax. I saw the positive aspects of it at that time but, apparently, the farmers did not. It seemed to me to be in favour of the land tax that it placed a fixed responsibility on farmers. They knew exactly what they had to pay and they did not have to go to accountants. Not everybody who owns land is necessarily a farmer and there are some people who own land more or less in the sense of a business. People of that kind are well able to engineer their profits so that they have a minimum amount of tax to pay and the Government suffer as a result of this.
It would be in the interest of the Government to encourage every farmer to use his land as profitably as possible. Through the years I, personally, have had experience of wealthy farmers who were not all that concerned about profit with the result that land and grass went to waste and consequently the Government suffered. From that point of view, it appeared to me that a very good case could be made for the land tax. However, at the end of the day, everybody must admit that people should pay according to their incomes. It is very difficult to make a case against that.
The finances of local authorities, everybody will agree, must be put in order as in the case of any private concern or, indeed, private company. It is most important that the finances are in order. The Government have done great work. They have been commended from all sides and the polls that have been taken recently and, indeed, since the Government came into office, have proved the point that the country and the people are very pleased with the way the Government have performed. Interest rates have come down and consequently mortgage rates have come down; exports are booming; the balance of payments is in surplus; there is confidence in the economy and this is at an all-time high level in every area. Growth last year was 5 per cent of GNP and this has been achieved to a large extent by the Government cutting back on their expenditure. It was necessary to do it; it was difficult to do it; but the Government did it and they have been commended, and rightly so, on all sides for their achievements. There was no other way. Local authorities must do the same thing. They have to cut back also, even if it is painful and, of course, it will be painful. It must be done.
A motion of this kind should not be taken in isolation. We should debate whether the structures that exist at present should be changed. I think they should be changed. The last two speakers more or less hinted at that with regard to local authorities. I have always been fair to the Labour Party in the House and given credit where credit was due. When former Deputy Jimmy Tully was Minister for Local Government he made an effort at decentralisation. At one stage, the housing grants were organised from County Meath. That scheme was a great success. Great credit was due to the Minister at that time. Unfortunately, it was not followed through. I could never understand why. It eliminated travelling expenses for officials: it reduced bureaucracy; it reduced book-keeping; it accelerated the process of dealing with applications and it is unfortunate that it was not followed up. Decentralisation is very important in every area.
As one who worked with the local authority in many areas, on roads, for example, I saw at first hand that local authorities in many ways had their hands tied. Plans were drawn up by local authorities but they had to be vetted and passed by the inspector from the Department of Local Government, as it was then — the Department of the Environment now. It ties the hands of the local authorities behind their backs when local enthusiasm is not harnessed in the way it might be. It puts a weight around the necks of local authorities. With decentralisation this is something that could be eliminated. Local authorities have at present the possibility of entering into money-making situations under the Planning Act and particularly in relation to tourism which was mentioned by the previous two speakers.
There are many other areas I would like to go into but, unfortunately, time does not allow me to do so. Archaeology is another area where there is a potential for local authorities to have a great input. I refer to the display centre at Kilfenora which could be a model for many other areas. I do not agree that elected representatives are frustrated. They may be inhibited to an extent but they are a very resilient group of people. The present situation places problems before them which they will overcome. Structural changes are inevitable. Senator Ferris referred to Fianna Fáil promises that they would change everything. When the last Coalition Government of which the Labour Party were part came into office the debt was £12 billion and when they left office it had increased to £24 billion. That was the situation this Government inherited.
My time has expired, unfortunately, and I cannot develop that theme any further. I would like to say again that the Government have been praised on all sides for their achievements since they took office. In conclusion, I hope we will be successful in the fiscal and financial areas and that there will be a great improvement in employment as well. I believe this is coming about.
In seconding the amendment to the motion I would like to pass a few comments. I do not intend to spend very long on this amendment. Much play has been made about the downturn in local authority spending and the fact that jobs have been lost. Nobody has said that interest rates, since we came into Government, have dropped by over 5 per cent and the rate is now about 6.2 per cent. Every 1 per cent of a drop in interest rates means that every local authority have a drop in their repayments to the banks. The banks were milked by the local authorities and I sincerely hope that the Labour Party will acknowledge the fact that, because this Government have managed to get interest rates down, repayments to banks from local authorities have dropped significantly.
I would think that the drop in interest rates means that there is at least £1 million available to local authorities which was not available when interest rates were at 12 per cent or so. The repayment of overdraft interest by local authorities has dropped by significant millions of pounds. The repayment on capital schemes has correspondingly dropped. Therefore, there is a saving for local authorities even if they never embarked on a scheme to ensure that they were managing their affairs effectively.
I am not too sure whether we should say, as Senator O'Shea did, that he is a member of three local authorities. I just happen to be an alderman of one, a member of another and a Member of this House. I can see the problems for local authorities in terms of funds. The local authority feedback I get is no different from the feedback Senator O'Shea gets but, of course, he interprets it differently. In no way has he said that, because this Government went about their job in the right way because repayments have decreased — not only repayments decreased but the cost of the services to local authorities has also decreased — his motion is ineffectual.
Mention was made about potholes. Certainly there are potholes. I travel to various countries and there are no bigger potholes in Ireland than there are in any other country. We have to face the fact that the taxpayer pays for the repair of the potholes and the potholes will not be repaired in this country, any more than in any other country, unless the taxpayer is willing to pay. The taxpayer has not decided that the repair of potholes is a priority. Having said that, I travel every day throughout this country and I have never seen a better scheme of repairs on roads than I have seen in the past two years. If Senator O'Shea who comes from Waterford travels through County Kilkenny he should know that he will not hit one pothole until he travels into another county. He may hit a pothole going into Kilcullen — and I would like the authorities in Kilcullen to repair the couple of potholes that are there. It is not for us, as the Government, to ask the people of Kilcullen to repair the couple of potholes that are there.
Low-cost houses were mentioned by Senator O'Shea. A scheme of low-cost houses was brought in by a former Fianna Fáil Government. At the time there was a crying need to get people out of flats which were over-priced, which were in dire need of refurbishing and the Government of the day decided to provide a certain number of low-cost houses. I do not know about Waterford but I know that in South Tipperary, Kilkenny, Wicklow and various areas around the country, these houses were provided by the National Building Agency.
In South Tipperary there was a scheme. In Kilkenny, there were schemes and there were schemes in Wicklow. Not this Government but another Fianna Fáil Government decided that these houses should be brought up to what were considered to be good standards. In Kilkenny, the housing schemes built by the NBA are now being brought up to a standard which would be acceptable in any community. They will far surpass the type of housing available on the private housing market. This Government have been providing the money and a Government prior to this made certain that these houses would be brought up to standards which are above private housing standards.
This Government again have made decisions which will ensure that people who live in corporation, or county council, or open housing estates will want to stay in these housing estates. The Labour Party in Government decided that these people who are tenants of local authority houses wanted to get out; they wanted to get rid of their local authority status and wanted to go into private housing. What we are saying to them is: "We will give you the opportunity to stay in the locality in which you were born. We will give you the status you deserve. We are not like the Labour Party in Government, trying to get rid of you out of the housing estates provided by the State." We suggest that the State should provide a certain number of houses for those who need them but, once people go into these housing estates, we do not want them to stay in a ghetto. We want to ensure that these people can live in these houses and can provide for themselves and their children in the best housing conditions in the world in terms of Government provision for houses.
On the question of statutory bodies, frustration, I am a member of a local authority, I think, for longer than Senator O'Shea the proposer of the motion. In the 20 years or more that I have been involved in local authority membership, I have never gone to a corporation meeting or a county council meeting at which there has not been criticism of the lack of funding for local authorities. I can see there is frustration among local authority members because they feel that all the authority is up here. I can tell them as a member of the Oireachtas that I feel tremendous frustration that I cannot do any more here than I can do at corporation or county council level. We depend on the decisions made at Government level. On a social basis the Labour Party should consider that this Government are providing moneys in a way that the Labour Party should be praising rather than criticising.
Short time and social employment schemes were mentioned. In County Kilkenny and in other counties there is no scheme that took from the potential employment of county council or corporation workers. The social employment schemes were used on the most imaginative projects and they continue to be used on the most imaginative projects. I hope the social employment scheme will never be used to replace workers in the normal scheme. I compliment the Minister on what he is doing in trying to broaden the social employment schemes.
I go into various counties and I do not think Senator O'Shea is being true to himself when he criticises what is happening in the centre of Waterford city. The centre of Waterford city is being developed under a scheme which was brought in by our Government. The fact that in the centre ot Waterford city artefacts over 1,000 years old have been found is a credit to the Government who brought in the scheme, the Government who gave the money for the development of the centre city area. The artefacts found in Waterford city can perhaps equal those which have been found in Waterford county, Clonmel and wherever.
I would like to conclude by suggesting that the motion, tabled, is not relevant and I would like to second the amendment which is in my name but, in actual fact, it is Senator Fitzsimons' motion.
I shall be very brief because I was not aware until a few minutes ago that I would be speaking at this hour. The Order of Business takes an unusual turn at times in this House.
The Order of Business in this House is dictated by the House and there is no point in Senator Doyle coming in here and saying there is anything wrong with the Order of Business. If Senator Doyle is not in the House all day it does not mean that the order has to be agreed by him.
An Leas-Chathaoirleach
Senator Doyle to continue.
I was not casting any aspersions on the Order of Business. I was saying it takes an unusual turn at times. That is all I said and I cannot understand why Senator Lanigan gets so hot about it.
I rise in support of the motion in the name of the Labour group. I do so because last October, I think, I put down a motion somewhat similar to the motion before us tonight in relation to local authority funding. I did so at that time because I was very conscious of the effect that last year's Environment Vote would have on local authorities. Looking at the motion in front of us here tonight I think what the Labour Party group are saying is that that vote had a serious effect on the funding of local authorities during the year and they are trying to issue a warning to the Government to take cognisance of that fact in the preparation of the Estimates for the coming year. That is a very reasonable approach to take and one that we would all have to concur with because we have to learn from the situation on the ground. The cut in funding — I think it was 14 per cent overall in last year's Estimates has had a serious effect on local authorities and the work carried out by local authorities — road schemes and sewage schemes, environmental works, the maintenance of our environmental works and other such works throughout the counties — has almost come to a standstill due to a lack of funding. We experienced in my own local authority a cutback in this maintenance work due mainly to a cutback in staff. Dublin Corporation had voluntary redundancy for several hundred of their staff during the past year.
Continually, local authorities are being starved of funding. It is only right that the proposer of this motion should fire a shot across the bows tonight, so to speak, warning the Minister for the Environment to take into consideration the funding of local authorities.
The Department of the Environment is a very unique Department because it is a Department that touches almost everyone in the country at some stage or another. It is a very personal kind of Department as far as the public are concerned. The public are very conscious, too, of the Department of the Environment and the work they carry out. They are also very conscious of the work that local authorities carry out, because while they might not be very clear at national level what is done they certainly take a personal interest at local level. It is essential that at local level sufficient funding be given to allow local authorities and local representatives who are elected by the local people to carry out the work we have responsibility for.
It has been my sad experience in the past year in Dublin Corporation, the major local authority in the country, that when I move motions to benefit the environment in my area and in the city generally the answer received from officials is that they would like to carry out the work but, unfortunately, due to lack of funds it is not possible in the current year. I hope that next year there will be a better allocation of funding and that the rates relief grant will not be cut back as severely — I hope it will be increased — so that local authorities can carry out this work. The Minister in his speech last year on the motion on local authority funding said, at column 682 on Wednesday 21 October 1987:
There is one further very important aspect relating to local authority funding on which I would like to comment. I am not satisfied with the present system of local authority funding. I have already initiated a review of local finances within the Department with a view to developing proposals for long term reform of the system. The review is at an advanced stage now in the Department, I will be putting proposals to the Government shortly.
— We must remember when the Minister said "shortly" he was making the statement last October —
to put local authority funding on a sound and stable footing for the future.
The Minister was only quoting exactly what was in his manifesto in the last local elections when it was the policy of the Fianna Fáil Party to put local authority funding on a sound and stable footing. Unfortunately, that has not happened. The Minister went on to say:
I think a cheer will go up in every local authority in Ireland once that is in place and running.
I hope this evening that a cheer goes up in every local authority in the country for a different reason. I am still waiting for the cheer to go up for the funding. I think we will be waiting for a long time for the cheer that the Minister was speaking about in relation to local authority funding. It is essential, if we are to have the kind of local authority services that are necessary for the country, that we and the local authorities we represent throughout the country get the funding that is necessary. I fully support the motion before us tonight because it is sounding a warning note to the Minister that the situation is not well on the ground. It is in a very serious situation on the ground and he should take cognisance of this in the preparation of his Estimates in the coming year.
An Leas-Chathaoirleach
I call the Minister of State.
On a point of order, we want to facilitate the Minister and not restrict him to time. Senator Harte is offering and we are prepared, if the House is agreeable, that the Minister would then have whatever time he requires to respond and Senator O'Shea will wind up with the ten minutes if the House agrees. It is unfair to restrict the Minister. It is a major debate and we want to facilitate him. If Senator Harte had a few moments he could make his contribution before the Minister. We would not want to restrict the Minister.
An Leas-Chathaoirleach
That is a matter entirely for the House. Unfortunately, the Chair cannot accept a motion from the Opposition benches for a change in the Order of Business. The Chair finds himself in a bit of a dilemma as far as that is concerned. There is before the Chair now an obligation to call on Senator Brian O'Shea to conclude at 5.23 p.m. That would leave the Minister 20 minutes to reply.
I discussed this with the Leader of the House. He did not seem to have any objection, so it is a matter for Senator Fitzsimons to move the amendment.
An Leas-Chathaorleach
There is nothing the Chair can do.
I think we would agree to let Senator Harte speak.
I would not like to interfere in the arrangements that Senators make. I am totally in Senators' hands.
We have no objection to Senator Harte speaking.
An Leas-Chathaoirleach
Is the House agreeable to extend this particular session for ten minutes to facilitate our colleague, Senator Harte?
Senators
Yes.
I thought it was to facilitate the House, not Senator Harte. I would not have put you to so much trouble if I thought it was for me.
An Leas-Chathaoirleach
It is to facilitate the House. The Senator is perfectly correct.
I would be first to concede that the Minister should be facilitated. Due to the importance of the subject of our motion which earnestly cries for attention I would have hoped for a wider interest in it, particularly since there are so many local authority representatives in the House. I also thought that perhaps at the end of that debate we should conclude by offering remedies that people will actually see to be expedient. It is another matter whether they are practical. It was meant to be a broader debate and it was meant to have more people participating. It was meant to deal with the whole question of representation, structure, functions and finance, not just the question of funding alone. It was hoped in the context of the amendment that it would broaden out in that way.
Let me make a general point, because local government, as far as I am concerned, cannot be considered just on its own. It is a very important part of our democratic system. The remedies for the ills in local government must be considered in that broader context and hence I speak of suggested remedies. When we think of the health of our local democracy we must never forget to raise the question of the health of our democracy as a whole. We are running into many problems trying to fund many things, never mind local government. Consequently, while the wording of the motion deals with the question of getting the Estimates right for the funding for local government for next year, that is a type of limitation on what was actually intended in the overall meaning of the motion.
Perhaps it is not the best worded motion but the overall intention was that we would deal with the situation a little more seriously, that we would talk about the question of the opportunities for spontaniety, for local and regional initiatives for enterprises, enterprises which were progressively choked off down the years by the whole question of centralisation. In the past everything had to be referred to central Government, which increasingly was unable to respond positively and assertively. Hence we get ourselves to the point where we are actually talking about the question of funding rather than talking about the broader democracy in the interest of the health of society as a whole.
Unfortunately, we have become a nation of centralisers. It was centralised failure with regard to the question of local government. I heard it described once as progressive constipation. It was a fragmented effort. You had to press on and do your best. In the past we have been talking about programmes of devolution etc. Not only this Government but many other Governments and many other people advocated this devolution of power. It there was a consuming desire to accept this whole question of devolution of power I doubt very much that we would be talking about funding because we would have reached the point of finding out how best local government could generate, in the main, their own finance.
It is not unheard of for local authorities in some countries to have control over municipal banking systems where they raise their own finance. It is not unknown for local government to be much further into the whole question of tourism in terms of a spin-off for the local people, activating the whole question of tourism. It is not unknown for local government and local authorities in many countries to sell their trading enterprises and to sell services elsewhere.
I cannot see why it has not been possible to think along lines such as that down through the years, instead of bringing it to the point where everybody gets into the dug-out. We are fighting from a dug-out on the question of funds. If we had been sincere about broadening democracy and making sure that everybody, from the local parish up to the community as a whole, had an input into how local authorities raised their own money, we would have been much better off. Unfortunately, that did not happen. We have not been able to raise the level of public responsibility and realism in our society with regard to local government.
The whole question of civic culture and civic honesty is also causing problems. Because we have not been involved in this question of democracy in the past five or six general elections, the Government have not lost; they have been sacked. The people said: "A plague on both of your houses." That is a reflection of the fact that we have not democratised our local government or given enough power to local government.
Yesterday we were talking about the advantages we could give to the Electricity Supply Board by extending their enterprise activities, selling services, etc. I do not believe there is anything in the managerial order that would debar local government from actually running municipal banks and becoming more deeply involved in generating tourism for themselves. Naturally, some spin-off would have to go to central Government. Local government, on a regional and local basis, could do much more on the question of raising finance. It does not have to be just somebody talking about water rates. I know the subject of water rates raises the question of employment. I would not knock anything that keeps people at work. I am not arguing about water rates. I am not stating the Labour Party point of view. I am speaking in a general context.
I suppose we could say that a monster has grown up in the sense that everything was ultra vires as far as local authorities were concerned and the severe trimming was necessary. Nobody will argue about the fact that there were some difficulties regarding the huge costs of administration. Nevertheless, the question of control was too much. I agree that when there is a minority Government they have to keep a certain amount of control but they should not necessarily tie their hands so that they cannot generate funds for themselves. I see the Minister is getting a little anxious. I must be in breach of the motion or the time. I imagine it is the time.
An Leas-Chathaoirleach
Perhaps the Senator will conclude.
I will do the best I can. In essence, we have not dealt with the question of local democracy properly; we have not given it the scope it deserves. With the piecemeal effort and our tendency, down through the years, towards centralisation, we have choked off the progress of local government. I hope the local representatives I have to call on from time to time will not take me up wrongly when I say they could have been a little more forceful on the question of local democracy. I am talking about all parties. One wonders why the force did not generate itself.
I am extremely pleased to be here with Senators this evening to speak on this motion. I want to thank all of them for their contributions. I appreciate them very much. I thank Senator Ferris for his kind remarks, it is always my aim to help and assist. I hope that will always be my aim. I see no reason why it should not be, because that is what it is all about.
A number of points were raised. I will deal with them as they come to hand in the short amount of time available to me. Senator O'Shea talked about urban renewal. As far as his city is concerned I am very hopeful that work will commence in the autumn. There are very positive proposals, not only in Waterford but in many parts of the country.
I was asked why I did not bring in a White Paper on this. I did not bring in a White Paper on urban renewal. I set out to do it. With the approval of the Government I went about that and I designated nine areas. I am glad to say that many positive proposals are coming from them now.
I am optimistic about Senator O'Shea's county. I look forward to complete and utter co-operation from everybody. I know I have that co-operation from the corporation and their members. I hope to go down there very shortly to see everybody and to see what is taking place. I hope that there will be major development there and I look forward to that.
Land tax was referred to. If the land tax was implemented it would bring in £46 million a year. The income tax yield would be a little less than £46 million. However, it would cost £13 million to introduce the scheme alone. I never agreed to charge anyone tax on an income that they have not got. I believe that, if you earn the money, you pay the tax; if you do not earn the money, you do not pay the tax. It is my view and the view of many legal people as well that it would not stand up in law because it does not take into account ability to pay. There could be an illness in a house, or wherever the case may be. That must be taken into account. That is my view. I want to make it quite clear that, as far as the Government are concerned now, the tax situation in regard to the farming community is settled. It will be on earned income.
I want to say a few words also on the social employment schemes. Those are very good schemes and working well in many counties throughout the country. In some of the counties where they are not in operation — I am asking this in the most diplomatic way I possibly can — would the local authorities, the unions, the members, the employees, get together, and solve the problem now and get on with the job. I do not see how this will interfere with any permanent employees of the local authorities. If there is a little bit of a difference there they should get around the table, come to an agreement, and get on with the job because otherwise our people will not respect us. They will blame us and say: "Why did you not get your act together?" I say to those areas where it is not in operation to set about it now.
I want to talk about local government financing. There is a lot of talk about it. The previous Government talked about it for four years and did not come up with any proposals. I will come back to that later. Housing interest rates have come down substantially and Senators will agree that those on high mortgages are receiving very substantial decreases in their mortgage repayments. A person who has a loan of £25,000 will be paying £63 a month less in repayments since the Government took office. That is into their pockets. That could only be done by keeping a tight rein on the finances. There was no other way we could do this and, as far as the Department of the Environment are concerned, there cannot and will not be any overspending. We must live within the allocation in the Estimate.
It is not easy for the Minister and certainly not easy for myself to prepare the Estimates last year for this year. We set about that and as Senators know, in October last the Estimates were published. Everybody saw all the amounts and before Christmas the local authorities were able to make the necessary arrangements in regard to their finances for this year. Waste had to go, overlapping had to go.
(Interruptions.)
Senator Doyle's party accepted the Estimate in full. Let there be no doubt about that. We had to face a situation where if we wanted to provide more money for local authorities, the only way it could be done now is by taxation. We cannot borrow money, as was mentioned earlier. The debt rose from £12 billion to £24 billion and that could not be allowed to go on. Corrective action had to be taken in that respect, which we are now taking, painful as it may be. There is no other option open that I can see. We could have carried on by increasing taxation but we are not prepared to do that because the people are paying too much tax. We have to get down the taxation base and make ourselves more competitive.
With regard to housing, Senators know the amount of money that was made available. In regard to medical schemes, the amount of money last year was £7 million. Ten million pounds is being provided this year for remedial schemes in housing throughout the country, which all politicians say is money well spent. I am glad to say that we are getting very good value here for the money. I must pay a tribute now to the local authorities and the management teams who look after that. It is very good work.
I want to talk about other local authorities and housing in general. We have a position now in the country and up here as well that applicants are now picking and choosing. They want the end house with the big garden.
(Interruptions.)
We are dealing with a new type of person also, unmarried mothers, smaller families, and other domestic circumstances also. I would like to see in relation to vacant local authority houses that allocations of these houses would be speeded up because I do not think it is right to see some local authority houses boarded up in some cases for two or three months before allocations are made. I am appealing to local authorities to take the necessary action to correct it.
I want to talk about the roads as well. The total amount of the grant for roads this year is £154 million. It is to be used for carrying out work on major roads to ports and airports. The Government are at present carrying out a major review of the roads programme and intend to publish a blueprint for road development over the next decade. The Government will shortly announce details of the national roads authority which they propose to set up to oversee the development of our national roads system.
These measures represent a detailed and planned approach to the development of our national roads network, one of the factors which underpin economic development. As part of the review which the Government have been conducting into the roads system detailed information has been gathered on the condition of the county roads. There is no doubt that the condition of the county roads has worsened in recent years. That is why this Government decided to make a special grant of £15 million available this year and last year for the strengthening of county roads. This is three times the amount paid by the previous Government in their last year of office. Local authorities have also been given more flexibility in regard to the allocation of the money for the county road network also. It is up to them now to manage it in the best way they possibly can.
I would like to say a few words on the subject of local government reform. We would all accept that an administrative structure set up 90 years ago and that has not changed much since, is in need of a review. There has been a lot of hot air in regard to this. The time for talking about it is over. We want action now. The Minister and I have now finalised a plan for the future of local government. We have consulted with the General Council of County Councils, the Association of Municipal Authorities, the County and City Managers Association and other interested parties and we have a fairly accurate picture of what we want to achieve.
We do not want short term solutions. The reforms we wish to put in place will have to stand up to the test. Reform of local government structures on their own is not enough. Financial reform must go hand in hand with that reform. Over the years a number of ad hoc decisions have been made about local authority finance. We now have the benefit of two in-depth reports on the matter carried out by the National Economic and Social Council and the Commission on Taxation. These reports have given a very clear indication of the problems involved and we are intent on meeting these problems.
The reforms that the Minister and I will put before the Government must be seen to be fair. We must be able to administer them easily and, above all, they must work. We are going to set about that now. At a meeting of the General Council of County Councils the other day I put it up to representatives of local authorities across the board whether they have the belly for reform and are prepared to meet the change. I asked them: "Do you want a soft option? Do you want to run away? Do you want to come and meet me, but I have not got the money?" I would like to give them money but I have explained why I cannot. I asked them: "Do you want that soft option? It is not around." I warned them that it is not around. I think that people are expecting more from all the local authority members and elected representatives.
I want to highlight now that whatever new arrangements are brought in the financing must be workable and, above all, be fair to the weaker section of our community also. We will try to endeavour to do that. That is our aim. As I said earlier, I do not want anyone running away from reform when it comes, looking for it on the one hand and moving the goalpost, as some would say, when it suits them.
With your kind permission, a Leas-Chathaoirligh, I will conclude on the new house purchase and tenant scheme. It gives all local authority tenants a wonderful opportunity to own their own homes. I am asking you as Members of this House, and members of local authorities as well, to use your influence to bring about the sale of these houses to local authority tenants, because I think nobody can deny it is a very attractive scheme. I am looking forward to your full co-operation in that.
The Minister has told us that the proposals for the reform of local government have now been agreed. Obviously, he is very enthusiastic about them. He has put across to us that elements of that package will be unpalatable but that they must be met. I ask the Minister if the reform of local government will be in place before the next local elections and, if so, when are those local elections likely to take place?
I said that the Minister will be putting forward his proposals on local government reform to Government. It will be a matter for the Government and the Government shall decide then.
When will there be an election?
An Leas-Chathaoirleach
Senator O'Shea, without interruption.
I would like to set the record straight. For some extraordinary reason Senator Lanigan felt I was criticising what was going on in the centre of Waterford city. That is far from the case. At all times I have been one of the most enthusiastic supporters of that inner city development and I would like to thank the Minister for his enthusiasm and confidence in what is likely to take place in Waterford later this year. We are all very hopeful that the project will be well and truly under way by then. I would like to compliment the Minister for extending the time limit for the completion of the urban renewal package. There were delays because archaeological remains were discovered in Waterford. This was very important for us. That extension ensures that the development can be completed well inside the target time.
I would also like to compliment the Minister on extending the same programme to nine other centres, because a national problem is that the cores of our cities and towns have in many cases decayed over the past couple of decades. This gives an opportunity for the renewal and redevelopment of these areas. It does, of course, reduce in the short term the income to local authorities because there are concessions regarding commercial rates involved. Certainly, overall the thrust and the extension of this policy by the Minister is something we are all very pleased about.
The Minister also said that he looks forward to going to Waterford in the very near future. Let me assure him that he will be most welcome in Waterford. I think he will be very impressed when he inspects the archaeological remains and, indeed, goes to visit the exhibition of the more important finds that are presently on display in Reginald's Tower.
We presented this motion in a constructive spirit. I would like to refer again to the land tax. The Minister said that the land tax would bring in about £46 million and that it would cost £13 million to implement. I presented figures earlier, showing that farmers are paying on average about £460 to accountants. One in four of these farmers then discovers he has no taxable income. In late 1986 the ICMSA told the Government of the day that they were prepared to pay the land tax on an arbitrary basis until such time as the land survey had been carried out. I still hold that at the end of the day, the State take would be larger. There is another problem regarding the small farmers, in particular. We have to take into consideration the family farm unit where the wife and some of the children are obviously involved in the farm enterprise and ensure that the efficient person who is producing is not penalised for being efficient. I believe that the land tax would serve to improve the appearance of the countryside because the land would be better worked.
Senator Fitzsimons alluded also to this aspect earlier on and said that he feels that taxation should be assessed on accounts. The proposal by the previous Government was that the land tax should be paid on farms smaller than 80 adjusted acres and that, above 80 adjusted acres, tax on accounts should be implemented. I disagree with the Minister's assessment of the role that land tax could play. I believe it would put some spirit into the countryside because the young farmer with the young family will know what he has to pay on 1 January every year, taking a good year and in a bad year it may not go so well with them. It does not penalise enterprise. There is still quite a lot of land throughout the country that is under-utilised at present.
The Minister also alluded to the fact that the style of application for local authority housing is changing to some extent and, obviously, the unmarried mothers category has become a larger part of our housing list. A trend I have noticed too is that single people, be they men or women, in their forties and onwards, are coming onto the housing list. Consequently we need to provide more smaller houses. That is a direction in which we have to go.
Regarding the tenant purchase scheme, all public representatives I know, irrespective of party, are promoting that scheme. I hope the Minister will be pleased to hear that. The origins of this scheme relate to the fact that local authorities no longer had the men or the materials to carry out housing repairs and this was the real reason this scheme was introduced. For instance, in the County Waterford County Council area there is a craftsman and one labourer for east Waterford and a craftsman and one labourer for west Waterford so the level of housing repairs we can carry out in County Waterford is pretty minimal. I believe this is the reason the Government brought in this scheme.
A basic problem with this scheme is that it will reduce the housing stock at a time when the housing stock should be increased. I have some figures. For instance, if we assume that a local authority house would cost £40,000 in the Dublin County Council area, three houses could be built in Dublin County Council area in 1988, but there are 722 people on the list. Dublin Corporation have a waiting list of 3,696 people, and no money has been provided.
The Minister spoke about — and, indeed, the Fianna Fáil amendment talks about — the problem with the national finances. There is a severe problem and there is no point in ignoring it. I accept that it has to be tackled. I am very concerned about the decline in the services being provided by local authorities. The Minister may say local authorities must be more efficient and must use their money in a more productive way. I have seen no fat or waste in the local authorities in the past number of years. I am horrified at the results of some of the cutbacks.
The Minister is opposing our motion but I still ask him, when the Estimates are being considered, to try to provide the wherewithal to give a dynamic, developmental role to local authorities, one that is geared towards job creation in particular in the tourism area. The package extended this year for commercial redevelopment is a very important element in that. More funds need to be provided for archaeological development because all the advice we get in Waterford is that the continental and American tourist is looking for modern shopping development allied to the development of archaeological and historical remains, retaining old street-scapes, retaining our narrow streets and the character of the medieval or Viking cities and towns we have around the country.
I earnestly put it to the Minister that this is an area for job creation. The local authorities have an immense role which they cannot play without the funds and the wherewithal. As the father of six children I hope I will never see them emigrating — as a teacher I have seen too many of my past pupils emigrate — I believe the local authorities have a vital role to play here. I ask the Minister to take full cognisance of this when the Estimates are being drawn up.
Amendment put.
The Seanad divided: Tá, 25; Níl, 16.
Tá
- Byrne, Seán.
- Cassidy, Donie.
- Cullimore, Seamus.
- Doherty, Michael.
- Eogan, George.
- Farrell, Willie.
- Fitzgerald, Tom.
- Fitzsimons, Jack.
- Hanafin, Des.
- Haughey, Seán F.
- Hillery, Brian.
- Hussey, Thomas.
- Kiely, Dan.
- Kiely, Rory.
- Lanigan, Mick.
- Lydon, Donal.
- McEllistrim, Tom.
- McGowan, Patrick.
- McKenna, Tony.
- Mooney, Paschal.
- Mullooly, Brian.
- O'Callaghan, Vivian.
- ÓConchubhair, Nioclás.
- O'Toole, Martin J.
- Wallace, Mary.
Níl
- Bradford, Paul.
- Bulbulia, Katharine.
- Connor, John.
- Cregan, Denis.
- Doyle, Joe.
- Fennell, Nuala.
- Ferris, Michael.
- Harte, John.
- Hogan, Philip.
- Kelleher, Peter.
- Kennedy, Patrick.
- McCormack, Padraic.
- McDonald, Charlie.
- McMahon, Larry.
- O'Shea, Brian.
- O'Toole, Joe.
Tellers: Tá, Senators S. Haughey and Fitzsimons; Níl, Senators Harte and O'Shea.
Amendment declared carried.
The question is: "That the motion, as amended, be agreed to".
We wish to be recorded as dissenting.
We would also wish to be recorded as dissenting.
Question put and agreed to.
When is it proposed to sit again?
It is proposed to sit at 10.30 a.m. on Thursday, 16 June 1988.