Seanad Éireann debate -
Thursday, 14 Dec 1995

Vol. 145 No. 15

Adjournment Matters. - Castleblaney UDC Rates Support Grant.

Mr. Cotter

I note the Minister of State, Deputy Currie, is also taking this debate and I will be brief. The Minister has had a long day and I do not wish to overly prolong it. However, I make a case for Castleblaney Urban District Council. Senator Gallagher is not in the House but she would be interested in associating herself with this debate. This also applies to the public representatives from County Monaghan. We held a meeting last week with the members of Castleblaney UDC and Dr. Collins and they put a strong case forward.

They are aggrieved that the amount of the rates support grant notified to the council for next year is approximately £42,000. The highest figure the council ever received was £74,000 in 1985. If one considers the time span of ten years, that figure was almost twice the amount notified for next year. This indicates why the members are aggrieved. Various reasons were put forward as to why the figure is so low, one of which is that since 1985 the figures decreased on an annual basis up to a couple of years ago. Increases now are small and the council has difficulty maintaining services and modernising the town.

Castleblaney is a small town with a population of approximately 2,000. The Acting Chairman and the Minister of State are familiar with Castleblaney as they pass through it when driving to County Donegal and the North. You, Sir, probably stop at the Glencarn. You make it known that you are a Donegal man and get many people from that area calling in when they are passing through.

Castleblaney is a small town which has suffered incredible job losses since the 1970s. There was a bookbinding plant there in 1974 which lasted for a couple of years before folding. There was also a furniture plant opposite the Glencarn which was a big employer, but it closed down in the 1980s. No substantial industries have come to the town in the meantime and therefore the wage base is very low.

Castleblaney is situated just two and a half miles from the Border and three miles from Culloville in County Armagh. In the 1980s Castleblaney's business community suffered when townspeople wisely went North to buy their goods because price differentials were so great. In the meantime the town has managed to scrape together £100,000 to match IFI funding for phase 1 of an urban renewal project on the main street. It is now faced with trying to find funds to match phase 2 of the development, but there is truly no way they can come up with that money. The case has been made as to why Castleblaney should have an increase in the rate support grant. Castleblaney Urban District Council was meeting today to try to strike a rate for the third time in recent weeks. They have a choice of putting a very big burden on the ratepayers in the form of charges or they can budget for a deficit, but they are very responsible people and do not want to do that.

The Minister should give members of Castleblaney UDC and the townspeople some hope that the very small rate support grant, which is about half what it was ten years ago, will be substantially increased. The townspeople should have an opportunity to use all the possibilities that have opened up to try and develop Castleblaney into a thriving town again. It will need a lot of work to achieve that. I look forward to the Minister's response.

Minister of State at the Department of Health (Mr. Currie)

I thank Senator Cotter for raising the matter and for affording me an opportunity to respond to it. In the current year, total spending by all local authorities is estimated to amount to £1.86 billion. This is divided between current spending of £1.2 billion and capital spending of £660 million. This is a very significant level of public expenditure by local authorities which is indicative of the wide range of services they provide to the public at large. There have been many calls for increased funds to be made available for local authority services and the Minister accepts there is a national desire to improve and expand the range of services. We must, however, be realistic about what can be accomplished within the resources available for these purposes.

Current expenditure by local authorities of £1.2 billion is funded by way of £500 million in Exchequer grants and £700 million which is raised at local level through a variety of income sources, including rates and charges for services. Many of the Government grants fund specific services such as provision of local authority housing and improvement and maintenance of non-national roads. There is, in addition, the rate support grant, which amounts to £189 million this year. This is a general purpose grant which local authorities can use at their discretion anywhere within their estimates.

This year's rate support grant shows an increase of 2.5 per cent on the 1994 provision. In so far as 1996 is concerned, a further increase of approximately 2.4 per cent was obtained and this has been passed on to all local authorities, including Castleblaney Urban District Council, which was notified of its allocation for next year on 1 December. I should make the point that the level of the grant in recent years has generally increased at least in line with the annual rate of inflation.

The Minister, I am sure, can understand the genuine demands for additional allocations to individual local authorities such as Castleblaney Urban District Council. Equally, I am sure local authorities will appreciate that the Government has to strike a balance between expenditure and taxation, and the option to either take funds away from other services or to increase taxation. The Government's aim and policy is to achieve a fair allocation of the overall resources available and at the same time not to increase the overall level of taxation. In present circumstances local authorities are receiving a fair and equitable share of available resources.

In so far as Castleblaney Urban District Council is concerned, the Minister for the Environment is aware of the difficulties they are experiencing in keeping a tight rein on their finances. We know that they are doing, and will continue to do, their utmost to manage and control their expenditure and at the same time maximise their efforts to increase their level of income. We believe that the council is capable of managing its affairs in the context of the 1996 estimate which it has just today adopted, and within the resources that are available. This may call for hard decisions on some issues which will have to be faced. I regret that it is not possible for the Minister for the Environment to increase the council's allocation beyond the £42,400 already notified.

On the question of local authority financing generally, I can assure this House that the Government is fully committed to working towards a solution to this difficult issue which has been with us for many years. You will be aware that in line with a commitment given in the policy agreement A Government of Renewal, consultants have been engaged to undertake a professional study of local authority financing to establish how a fair, equitable and reasonable system of funding might be introduced. This study commenced in July last and stage 1 is due to be completed within a month. The study is considering existing and potential sources of income together with expenditure demands on local authorities. This stage of the study will bring forward funding options to be examined in depth in stage 2, which, in turn, will be followed by a period of consultation with interested bodies. Stage 2 will get underway as quickly as possible in 1996.