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Seanad Éireann debate -
Wednesday, 27 May 1998

Vol. 155 No. 15

Local Government Bill, 1998: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This is the second time within a short period we have spoken on local government matters. I hope it is a sign of the importance the House attaches to local government and its development. As most people will know, it is a high priority of mine as Minister for the Environment and Local Government.

This Government is less than a year in office and has already made significant progress in delivering on the commitments made in An Action Programme for the Millennium. The economy continues to grow at an unprecedented rate and unemployment is still falling. We have achieved our objective in relation to economic and monetary union and have been accepted for membership of the euro currency. We have started to deliver on the promised tax cuts. There is no one area of policy that has been left untouched. On all fronts, this Government is delivering on its promises. We are in the unique position, unthinkable in previous years, of contending with the problems of managing this phenomenal growth and success rather than struggling to achieve economic expansion, which was the major problem in the past. In a sense, the problems of success are new territory for each of us.

One specific area where investment has lagged behind, particularly over the past two decades, is local government. We have had massive capital investment projects, managed very successfully by local authorities, to build new roads, houses and that most essential service — delivering clean water. In the midst of all this investment, local authorities have not been able to maintain their ongoing services to a satisfactory level, a matter agreed by all Members of the House. Even more constrained has been their ability to get involved in developing their local communities and improving the quality of their customer care. Lack of resources has been a stranglehold around the neck of local government.

This Bill will enable me to deliver on the promises I made in relation to local government funding. Local government and the services it provides are an essential feature of our lives. However, local government should mean much more, and I am determined to see this happen.

The culmination of my abiding interest in sorting out the non-capital funding of local government is in the Bill under discussion today. When I announced my plans last January, I called it "A New Deal for Local Government". This is indeed a good and a new deal and I would like to briefly go through the major points.

The main feature of this Bill is the establishment of a local government fund. This fund will be set up from 1 January 1999 and will have nearly £600 million to be allocated to local authorities in its first year. The fund will comprise the proceeds of motor tax which will be used primarily to fund the non-national roads programme and an Exchequer contribution to fund the day to day expenditure of local authorities. In 1999, the Exchequer contribution will be £270 million which, when taken with an estimated £323 million in motor tax revenue, will see a fund of some £593 million being made available to local authorities. That is £128 million more than the corresponding funding available to them in 1997. In the event that I might be accused of misleading the Lower House where I referred to a figure of £125 million being available in this regard, the additional £3 million arose because of recently revised estimates of motor tax levels for 1998. These now amount to £323 million which illustrates one of my prime motivations for using motor taxation for this purpose, namely, the provision of a buoyant source of funding to local authorities.

The Bill provides for the ring-fencing of the local government fund for the sole use of local authorities. The fund will be buoyant not only due to the growth in the number of vehicles but also because I am providing for the Exchequer contribution to the fund to be index linked. In addition to increasing with inflation, the fund will also be modified to take account of changes to the functions of local authorities or changes in their cost base. This has been an anomaly for many years because local authorities have been expected to take on additional functions and responsibilities without any additional funding. How can we expect local authorities to implement change in areas such as environmental protection or litter control without additional money? Under the provisions of this Bill that will end. By way of practical illustration of this principle, the £270 million set aside from 1 January 1999 will increase by £300,000 because of the additional duties and functions which will be imposed on local authorities on foot of our recent announcement in respect of the protection of architectural heritage.

The money we spend in any sector of the public service must be spent wisely. After all, this money is not the property of local authorities or the Government because it is gathered by way of taxes from the public. Wherever the priorities of the day lie, we must maximise the return on the investment made. I have stated on previous occasions that there was total support from all sides of this House on the need for better value for money in all local government activities. I accept that we must be committed to quality but we must also ensure that the price we pay is reasonable and fair.

There seems to be some confusion about my commitment to value for money. This point was raised in previous debates and it was stated that I had abandoned it. Nothing could be further from the truth. I have addressed local authorities in every corner of the country in the past year and this is one of the major issues I have highlighted on many occasions. Local authorities are fully aware of my commitment to this principle. I will now deal with a number of the other features of the Bill.

Motor tax income will continue to be set aside for local government. However, in contrast with the present system of funding, it is wrong in principle to ask any sector of the public to finance the provision of general local government services for the entire community. I am, of course, referring to the Irish motorist. The Bill will now right that wrong and the proceeds of motor tax will be used primarily for the funding of the non-national road network. Motorists will see for themselves where the motor tax is being spent. I believe it is most important, in the interest of accountability and transparency, that motor tax income collected should be ploughed back into the road network thus establishing a clear link between the services received and the payment made by the customer.

Last week in the Dáil I acknowledged the previous Government's recognition of the importance of those roads and its commitment to restoring them through the roads restoration programme. The Government is totally committed to the success of the non-national roads programme and has already increased the investment from the Exchequer this year, working to ensure that the target date of 2005 will be achieved and that all non-national roads will be up to a suitable standard by that date.

Part of the package of measures to address local government funding contained in the Bill is the increase in motor tax rates. The rate increases of 3 per cent this year and a further 3 per cent from 1 January 1999 are minimal when it is considered that these are the first increases since 1992. For a car under 1,000 cc, the increase will be £3 this year on the annual rate or £6 when the rate increases for next year also come into effect. These changes are hardly significant when one considers the full cost of motoring.

However, as I said before, this is more than a series of rate changes to fund non-national roads. It is also a reform measure and a major shift in motor tax policy. Not all the rate changes proposed are increases, and the Bill recognises the importance of adequate public transport facilities to society by cutting the motor tax rates for buses drastically. The greening of taxation is happening in many countries in Europe and will continue to evolve in Ireland. This reduction in public service vehicle motor tax rates is a move in that direction.

Another myth that has appeared recently, and one that was articulated by Senators the last time this issue was discussed, is that if I abolish the local government equalisation fund I am forgetting about equalisation. That is without foundation. The principle of equalisation will be a core feature of the local government fund. It is most important that any additional funds that become available are distributed equitably. However, to do that we must know the needs of local authorities, the resources they have to cater for them and consequently the resources they would need from other sources.

Most Senators are aware of the dissatisfaction in local authorities about the way in which the old rate support grant system worked. It was not fine tuned to respond to a changing society. The services being provided may have changed but the funding did not. The additional funding is substantial and for that reason equalisation has become much more important.

That is why I am funding a pilot study by Galway County Council on its needs and resources, and those of the other local authorities in Galway, with a view to developing a model that can be applied to any local authority. The study got under way in March and I hope to see the results emerging later this year. We must achieve a model where various criteria are identified which contribute to higher or lower costs and where the capacity of a local authority to raise funds locally is factored into the equation. The intention is to find a level of funding appropriate for each local authority and then to allow that local authority the maximum independence possible in delivering its services, whether they are discretionary or statutory services.

There is a number of other aspects to the Bill which are not related to funding. The first provides for the postponement of local elections from June of this year to June 1999. I wish to reiterate my statement in the other House that the decision to postpone them was not taken lightly by the Government. Local elections are the principal means by which the political will of the local community is expressed. It is now almost four years since the people spoke at town elections and almost seven in the case of city and county authorities. Ordinarily, therefore, the case for local elections in June of this year would be very strong. However, these are not ordinary times for local government; there are substantial and unique arguments why the elections should be postponed for another 12 months.

The first of these is that a major programme of local government renewal spanning a number of years is now underway. I know this has been used in the past to postpone local elections without being followed through. However, I am absolutely committed to delivering a new local government system and it is important that the general outline of that new system should be known before the electorate casts its vote next year and selects who is best suited to represent it.

Few would deny that local government needs to be made more attractive to a wider range of people, particularly women and the young. The prospect of a vibrant and reinvigorated local government system should help to provide broader participation.

A review of the electoral areas, taking account of the 1996 census results, is needed due to population changes since the last review 13 years ago in 1985. I have established committees to review local electoral areas and to report by 1 July next. It is important that whatever revisions are needed should be known by the electorate and potential candidates before the election takes place.

The recent establishment of the strategic policy committees system, which will strengthen and widen local democracy, is now well underway, representing the most radical development in local government for decades. It is important that that system is given the chance to settle in before elections are held.

The reasons for this short postponement are, therefore, very strong. It will allow the building blocks of the local government renewal programme to be put in place or, at least, be known before the electorate decides who should represent it at this crucial time of change.

The second aspect of the Bill, which is unrelated to funding, concerns local authority recruitment procedures. There is currently a statutory requirement that every permanent local authority office for which a professional qualification is required must be filled by the Local Appointments Commissioners. The inflexible nature of this requirement has prevented a solution being found for the plight of professionals in general, and engineers in particular, who are being retained in temporary employment on a long term basis by local authorities. Such is the length of service of many of these people at this stage that they should in equity be made permanent. That has not been possible up to now, but this amendment to the 1926 Act will remove the statutory barrier and provide the flexibility to allow the position of these people to be regularised.

No decisions have yet been made on precisely which posts will in future be designated for filling through the LAC. However, the intention is that the resources of the LAC will in future be devoted more to the selection and recruitment of the senior tiers of local authority posts. The more junior professional posts will be filled by way of local competition, as is the case with the clerical and administrative grades.

Due to concerns expressed by Deputies on this issue in the other House, I gave a commitment to keep the Oireachtas informed by ensuring that decisions are made by order of the Minister and that such orders will be laid before the Houses of the Oireachtas within 21 days of being made. I also gave commitments in the other House in relation to the levels and grades above which the Local Appointments Commission will continue to make appointments.

A section of the Bill provides for the making of a scheme to enable the payment of a gratuity on a once off basis to councillors who retire before the next local elections. I signalled my intention to introduce such an amendment to the Bill when local government was discussed in the House recently. The purpose of the gratuity is twofold. First, it seeks to recognise in a positive way the generous service that has been given by councillors over the years. Second, assuming a proportion of councillors take up the offer of a gratuity, it will create openings in the local government system for newcomers.

I hope the political parties will seek out and encourage potential candidates from a broad range of society, particularly women and young people. However, in case I am misunderstood, I do not wish local government to lose all its elder statesmen with all their experience and knowledge.

That is fine.

I am seeking the restoration within the local government system of the balance of representation of the various strands of our society and local communities.

Under the scheme it will be open to councillors to apply to their local authority for a gratuity within a specified time. At present I expect the timeframe to run from June to September of this year. The decision to grant a gratuity will be automatically revoked if the circumstances specified in the scheme occur, for example, if a retired councillor once again becomes a member of a local authority in the future. Another example would be where a councillor, having claimed a gratuity, subsequently stood for election. If a councillor applied for a gratuity this year and decided to stand for election next year or in five years, the gratuity will be repayable.

The establishment of the local government fund is the main feature of the Bill. This is covered by section 3. This buoyant fund is the centrepiece of the package and it will be audited by the Comptroller and Auditor General. Payments into the fund are dealt with in sections 4 and 5. The baseline provision of £270 million will be paid into the fund in January 1999. This will come from the Department's Vote and will be mainly allocated to local authorities for general purposes expenditure. I earlier explained the inbuilt mechanism to protect its value for future years and to alter it if circumstances change.

Section 5 provides for the payment into the fund of the full proceeds of motor taxation. This will also include driver licence duties and other miscellaneous fees and duties collected by licensing authorities.

Section 6 sets out the purposes for which moneys may be paid out of the local government fund. These will include contributions towards the expenditure of local authorities on non-national roads and general purposes expenditure. It may also include payments to local authorities in respect of expenses incurred in promoting the delivery of quality and efficient local authority services and in respect of expenses incurred by the Minister in collecting motor taxation. The section also provides for the establishment of a committee to advise the Minister on allocations to local authorities from the fund.

Section 7 deals with the issue of the expenses involved in collecting motor taxation and allows local authorities to take these expenses into account before they pay the balance remaining into the local government fund. A similar provision is contained in the Local Government (Financial Provisions) Act, 1997.

The adjustments of the motor taxation rates are provided for in section 8. These involve an increase of 3 per cent from a date to be appointed by order following the enactment of the legislation and a further 3 per cent from 1 January 1999. The section also covers reductions for public transport vehicles such as buses and taxis. The provision also covers minibuses because the reduction is designed to facilitate voluntary and community organisations which own minibuses and other transport vehicles. I draw Senators' attention to an additional element in the section which was introduced by amendment on Committee Stage in the other House regarding the removal of the need for temporary discs on commercial vehicles requiring certificates of road worthiness.

Sections 9 and 10 provide for the postponement of local elections until June 1999. These elections will now coincide with the European elections in 1999 and will be held every fifth year thereafter. I intend to introduce legislation next year which will include a constitutional guarantee for local government and also stipulate that local elections must be held every fifth year.

Section 11 removes the statutory requirement in the Local Authorities (Officers and Employees) Act, 1926, that every permanent local authority office for which a professional qualification is required must be filled by the Local Appointments Commissioners.

Section 12 provides for the making of a scheme by the Minister to pay a gratuity to councillors who decide to retire from service on local authorities.

Section 13 repeals various sections of the Local Government (Financial Provisions) Act, 1997, which are necessary to enable the new funding system to be introduced. Some provisions of the Act will remain in place, including those abolishing domestic water and sewerage charges and establishing on a legal basis the local government (value for money) unit and value for money auditing.

The funding system for which the Bill provides will be buoyant and satisfy the funding needs of local government for the future. It is fairer and more substantial that that proposed by the previous Government. Without adequate funding, local authorities cannot be as responsive as we would wish. I assure the House all efforts will be made to ensure that all the moneys made available to local authorities will be used wisely and that the performance of local authorities will become more transparent in the years to come.

I am pleased to introduce this important legislation. It is the first Local Government Bill I have brought forward and it is the first of a series of reforms that will be introduced by the Government over the coming years. On that basis, I commend the Bill to the House.

I welcome the Minister. He has kept the House busy with environmental legislation in recent months. While the details of the Bill were not previously discussed in the House, its broad principles were debated in the recent motion on local government funding.

The Local Government Bill, 1998, was initiated by the Minister for the Environment and Local Government on 25 March last. The Bill puts into effect the main proposals announced by the Minister in January 1998. It generally applies from 1 January 1998, with the exception of the 3 per cent motor taxation rate increase which will apply from the passing of the Bill in 1998. This will be followed by a further 3 per cent increase on 1 January 1999 as outlined in section 9.

The main provisions of the Bill will allow for the establishment of a Local Government Fund and the payment of £270 million in 1999 as outlined in section 4. In addition, the proceeds of motor taxation, which are calculated to amount to £320 million, will also be paid into a fund as outlined in section 5. The total fund will amount to £590 million from 1999. This represents an increase of £128 million in total local government funding in 1997.

Section 6 provides for the purposes for which money may be paid out of the fund. This is probably the most important section of the Bill and the one about which local authorities have most concern. Although it is evident that additional funding will be made available generally to local authorities, the exact mechanism for distributing the new funding is not clear. Under the present relatively new legislation Dublin local authorities would retain as of right 85 per cent of private motor vehicle taxes. This meant that approximately £50 million was retained by the four Dublin local authorities and not paid over to the Exchequer. The new legislation provides that all motor tax receipts, less motor tax expenses, will be paid into a fund and local authorities are therefore dependent on section 6 of the Bill for funding.

Since 1978 the rate support grant was based on the loss of domestic rates to each local authority. From 1983 onwards, payments of rate support gradually declined and with other changes in legislation the current equivalent rate support grant equates to about 25 per cent of the 1978 level. In addition, local authorities receive road grants and other miscellaneous grants from the Department of the Environment and Local Government. Since all these grants are being replaced by the new local government fund there will be no separate grants other than those payable out of the fund. From the perspective of Dublin city it is important that the future funding of Dublin Corporation, my local authority, fully acknowledges Dublin's role as a capital city with specific financing needs, including the regeneration of urban areas, community development and social exclusion.

The criteria for the distribution from the local government fund, as set out in section 6, are to be determined solely by the Minister for the Environment and Local Government. Previously, as I mentioned, the determination for rate support grant was based on specific loss of domestic rates, and even when this grant was declining it was generally applied in an equal manner over all local authorities. It would be preferable if an agreed criteria were applied in the distribution of money out of the local government fund to ensure that the base line of funding for each local authority was secure.

The Minister indicated in his contribution to the Seanad motion on local government funding that the fund would be distributed on the basis of needs and resources. He informed the House that Galway borough, county and urban councils, with assistance from the Department, are endeavouring to create a framework by which the fund will be distributed. The model being worked out appears to be based on equalisation, taking into account the individual circumstances of each local authority. I would be happier speaking to a Bill on local government funding if I knew exactly how this fund was to be divided among local authorities.

The Minister also stated on that occasion it was important that a local authority system gives value for money and he was putting audits in place to ensure this happens. Dublin Corporation has had audits in place for many years to ensure that the taxpayer, who funds the local authority, would receive value for money. Corporation management gives excellent value for money and I hope it will be favourably looked upon for a block grant so that members can decide how to spend this money.

One of the greatest weaknesses in local government is the lack of funding. I serve on the estimates committee of Dublin City Council. After we provide for salaries and wages out of the budget of £270 million, only 20 per cent is left for spending on other important issues. The general thrust of the Bill, with the additional increase of £125 million in funding for local government, must be welcomed as a serious attempt to ring fence local government funding as a separate entity from general Exchequer funding. The increase in funding is guaranteed under the Bill to be not less than consumer price index increases. It is the distribution of local government funding under section 6 which should be of most interest to local authorities and I hope the Minister will devise a fair system for the allocation of funds.

Sections 9 and 10 provide that elections to all local authorities will be held in 1999 instead of 1998 and in every fifth year thereafter. There is justification for postponing local elections this year. The previous and present Governments proposed changes to the local government system, some of which — such as the strategic policy committees — are now getting under way. I welcome these measures. As I said on the local government motion, the current system is tiring and needs reinvigoration. The new committees and systems will help local government.

Another reason for postponing local elections is that the present electoral areas were drawn up in 1985. There have been two censuses since then and there are huge proportional disparities in the local authority electoral areas, especially the disparity in the ratio of councillors to population. My electoral area to Dublin City Council, Pembroke, is now 19 per cent above the tolerance level of other areas in Dublin. The Minister has established a working party to report to him by 1 July on the reorganisation of electoral areas.

I have always favoured a single seat system at local government level and cannot understand why we have never tried it because it would have special advantages for urban areas like Dublin. For instance, the electoral area of Drumshanbo, County Leitrim, has a ratio of 960 people per councillor, which is real local democracy, while the ratio in Pembroke is 10,000 people per councillor. The population of that area is 40,000. If the single seat system operated in Dublin it would reduce my representation in Pembroke to 10,000 people. That would provide real local democracy and do away with the duplication of representation to the three councillors who share the local authority area with me.

On Committee Stage in the other House and again today, the Minister mentioned he intended to provide constitutional safeguards by proposing an amendment to the Constitution to give specific recognition to local authorities and to fix the interval at which local elections can take place by putting them on the same footing as Dáil elections. Perhaps he could be more explicit about that in his reply.

The Minister introduced a new section 12 on Committee Stage in the other House which enables him to grant a gratuity to a person in respect of his or her service as a local authority member if that person intends to retire prior to the next local election. I welcome this section because it is only right that retiring local authority members should get some financial benefit for the service they have given to the State, in some cases for many years. In this State, members of local authorities give a service to the community which is second to none. When travelling around the country on Seanad election campaigns I only have to mention the name of the local councillor I wish to meet to be given directions to his or her house. It appears that everyone in a community knows their local councillor and where he or she lives. County councillors, urban councillors and town commissioners have given an unstinting service to their community and made a vast contribution to local democracy. It is only right that those who wish to retire from the system should receive a gratuity for the service they have given.

The Minister said he was only prepared to give this gratuity to members who retire prior to the next election but a justified case has been made that members who have given many years' service and fail to be returned at the next election should also get a reward for this service. The Minister requires the consent of the Minister for Finance to set up such a scheme. When the Minister for Finance spoke on the Bill relating to Members' allowances he was pressed by Senators in regard to local authority members and he stated it was a matter for the Minister for the Environment and Local Government. I only hope the Minister will be as generous as the Minister for Finance was to Members of the Houses of the Oireachtas because local authority members deserve the same respect. If this is to be a once off payment, the gratuity should be a reasonable amount and I want the Minister to be generous. The General Council of County Councils gave him guidelines on a figure it feels appropriate. If he is not prepared to give a reasonable gratuity to retiring members who have given long and loyal service to local democracy, offering a derisory sum would insult them and it would be better not to go ahead with it.

I welcome extra funding for local authorities because insufficient funding is one of their weaknesses. However, we can never have sufficient funding to meet all the needs of the local system. Nevertheless, it is difficult to support the Bill because section 6 involves the drawing up of a scheme for the allocation of funding about which we do not know the details and the Minister said he will not have the report on it for some time while section 12 is designed to establish a scheme of gratuities for members and we are still in the dark about the amounts of money that will be available to retiring members. These are weaknesses in the Bill and, but for them, I would support it fully.

Ba mhaith liom fáilte a chur roimh an Aire go dtí an Seanad agus é a mholadh freisin as ucht an iarracht, suim, agus an obair dian díreach atá á dhéanamh aige chun rialtas áitiúl a chur chun cinn. Gan amhras, beidh sé ar ais arís go minic chun rialtas áitiúl a chur i bhfeabhas. Everyone welcomes the opportunity to see local government put on a sound footing. It is big business with the Minister in charge of probably one of the biggest spending Departments in the State, where over 30,000 people are employed, and controlling expenditure in the order of £2 billion per year. It is important it is underwritten in a way that enables it to make the contribution to society that he and every Senator wishes.

Since his appointment the Minister has shown that he is committed to meaningful renewal and reform of local government and has made many statements regarding the efforts he will make to remove the democratic deficit and institute a system whereby we will have full time elected chairmen of county councils and the role of the councillor will be recognised in a tangible way. People are looking forward in anticipation to that. As we enter a new millennium it is important the professionalism required and the time and dedication demanded of councillors are recognised in a way that enables them to function in a satisfactory and fulfilling manner.

We will also, hopefully, see the integration of development agencies and local government. They have played a constructive role and combining them with the local government system will have a symbiotic effect in that the combination of both will be greater than the sum of their contributions individually. I hope we will see that develop over the next 12 months as we approach the elections.

It is important the value for money ethos is maintained as a target and that the body to be established by the Minister which will monitor its success is effective. In general, the more transparent and accountable administration of local government is more cost efficient than spending money centrally which has been the tendency. A report in 1995 showed we had the most centralised system of government bar China and the Minister's commitment will give rise to an undermining of this status.

China was above us as well.

That demonstrates how far we must travel. The Minister's efforts in that direction deserve to be fully supported. Likewise, the integration of development agencies strives for value for money because the duplication of administration, which is costly, can be avoided and the accountability factor will make them much more dynamic.

I welcome the Bill despite a few reservations. However, for the first time it puts the funding of local government on a statutory basis. Over the past 20 years domestic rates were removed and this undermined local government to an extent. The guarantee of the rate support grant introduced at that time, subsequently removed in 1983 by Deputy Spring, then Minister for the Environment, also weakened the funding base of local government.

The rate support grant was never removed.

In 1977 when rates were removed, there was a guarantee that the rate support grant would be maintained in line with increases of rates in individual authorities — full compensation. However, Deputy Spring introduced legislation in 1983 which did away with that guarantee.

A great deal was guaranteed in 1977.

An Leas-Chathaoirleach

Senator Walsh, without interruption, please.

The rate support grant continued in a diminished way which did not give local government the capacity to perform.

It was as much as the country could afford at the time.

At the risk of arousing Senator Doyle, another retrograde step was the removal of domestic water charges by Deputy Howlin when in office last year in an effort to try to support candidates in certain constituencies where there might have been a certain degree of sensitivity to water charges and, unfortunately, that undermined the local government system.

The Bill restores confidence and fairness to the funding system for local government. Those of us who over a long period have been campaigning for increased resources to enable local government to function effectively will have to welcome an increase of 27 per cent in funding on the 1997 figure. That is a significant increase and all practitioners of local government, officials and elected representatives, will very much welcome that.

I acknowledge the Minister's commitment to ensuring there are adequate finances because it is not alone to be seen in revenue but also in capital. Funding for non-national roads and the housing programme increased by 22 per cent while expenditure on water services increased by £24 million. Those are significant funds and it is right they be given now when the economy is doing well. It is important this funding for local government is spent in providing infrastructure and better facilities for local communities so that everyone has the capacity to share in the benefits of the economic boom.

Section 11 removes the power to make certain appointments from the Local Appointments Commission and transfers it to local authority management. While the record of the LAC is reasonably satisfactory, all involved in local government can point to various appointments which have been less than inspired. Unfortunately, because of the nature of the public service, where such appointments turn out to be a mistake it is difficult to correct them. I have often seen situations where managers were influential in the selection process, both those made using the LAC and those made directly, although perhaps they are not as influential as they once were. People of good calibre who had an excellent contribution to make were often left behind and that is an anomaly. A county council is often compared to a board of directors. I know of no board of directors of any company which would sit on the sidelines when a critical and important appointment was being made, especially if the position had responsibility for a function which could dictate the success or failure of the enterprise. Councillors or the chairman should have some input into the selection of staff, particularly at a senior level. Perhaps that might be examined as it would enhance and improve the system. An example is the vocational education committees which have operated effectively for a long period and whose selection process is very good.

The authority of which I am a member, New Ross Urban District Council, had a temporary town clerk appointed a year and a half ago. All the councillors believed the appointment would not succeed and it is only now that the manager accepts the failure of appointing someone on a part-time basis to a full-time position. Anyone could have predicted the consequences of that but it was allowed proceed until the staff requested that the matter be rectified. Other than going on a deputation to the manager to make known their point of view, councillors were powerless. Their views were ignored for months until it became clear to everyone that the matter could no longer be tolerated. Such a situation should be avoided in future if at all possible and the structures should be put in place to avoid it.

I welcome with reservations the introduction of a retirement gratuity. The Minister is the first to introduce it, and in doing so he has fully recognised the role played and contribution made by councillors over the years. It is an important first step. However, I believe it should apply not only to those who retire but also to those who lose their seats and it should be available on an ongoing basis.

Does this mean the Senator will support my amendment tomorrow?

An Leas-Chathaoirleach

Tomorrow will come eventually. Senator Walsh without interruption.

We are all involved in local government and most in the Oireachtas would acknowledge that much of the work they do is related to local government and to the operations of their local authority in their constituency. It is an anomaly that, as Members of the Oireachtas, we will qualify for such a gratuity after three years' service, regardless of whether we lose our seats. When it comes to examining the overall package for local government, I hope there will be some payment included on an annual basis for local councillors. The formula which applies in the Oireachtas is one the Minister might examine at the time for application to local government.

It is important the amount of the gratuity is of a magnitude which recognises the contribution made. The Local Authority Members' Association, of which I am chairman, made a submission that the amount be £570 per year of service. I do not know whether the Minister will accept that figure, but whatever figure he does arrive at, it is important it recognises the contribution which has been made. Given the effort and courage of many politicians in achieving an agreement in Northern Ireland, politicians are now held in higher esteem than before. As national politicians, it is important that in dealing with local government we do not unwittingly denigrate or downgrade the contribution made at that level. If we avoid doing that, we will enhance the profession of politics.

I welcome the increase in funding. It is a significant one at a time of low inflation. I also welcome the value for money parameters the Minister will introduce. Local government has always been accountable and the increased discretion which will be part and parcel of the new system is also important. I hope those councils which are efficient and cost effective will be rewarded and that where councillors and councils display efficiency and innovation, the Department does not end up enjoying the benefit of it, something which has often happened in the past. If the benefit is left with the council which introduces and achieves these efficiencies, it will encourage others to follow suit. That should be the challenge to us all. The Bill is another step and milestone in the Minister's plans for local government.

I welcome the Minister. I agree with some of the changes he is introducing in the Bill. He has a large brief; environment and local government is one of the largest. There is no doubt that he is making changes to local government and I compliment him on that because it is not before time. Reform was needed and I welcome many of the changes he proposes. We have a centralised system of local government and, in fairness to the Minister, he is attempting to devolve some powers. We probably have the most centralised system in Europe, so any break-through and devolution of powers from central Government to local authorities will be welcomed by the public and local authority members.

I welcome the value for money parameters which the Minister has put in place. I join with Senator Walsh in asking the Minister to reward effcient local authorities. I recently read of a local authority in England which devised such an efficient system that business managers from all over the United Kingdom came to study it. I would welcome a system of rewarding local authorities who put efficient systems in place.

I welcome also the Minister's proposal to fund non-national roads from the motor taxation fund. The public will be able to see how their motor tax is being spent. The total amount being spent on national secondary routes is approximately £18 million. This is a very small sum of money. In County Mayo, although we have a large number of national secondary routes, we received no funding in the last number of years. A system must be devised to spend some of the motor taxation fund on national secondary roads. The Minister has said that the volume of traffic will increase so more money must be spent on secondary routes.

I welcome the Minister's provision of extra funding to deal with the litter problem. The beauty of our countryside is being destroyed by litter. Any measure to deal with this problem is welcome.

I hope the Minister will encourage local authorities to devise a more efficient method of collecting motor tax. I would like to see a system of easy payments which would allow motorists to pay the tax by credit card or on a monthly instalment basis. We will see a significant 6 per cent increase in motor tax over the next two years. Tax on a two-litre car will amount to between £400 and £500. This amounts to £10 per week and many households require two cars. A system of instalment payments or of credit card payments is needed. The practice of paying the total amount of the tax in one instalment is outdated.

I am not happy with the proposed changes in the functions of local authority members. The Minister has spoken about transparency. He spoke at a recent conference in County Wexford about these proposed changes but nothing significant has been announced about the Minister's intentions since then.

The Minister has indicated his intention to give a gratuity to long serving members of local authorities. He gives no indication of the amount of the gratuity or the conditions attached to it; nor does he state his reasons for granting this gratuity. I presume it is granted in recognition of service but I do not understand the manner of its introduction. Most councillors with whom I have spoken are insulted by the manner in which this measure is being implemented. Many councillors wonder if the Minister is attempting to encourage councillors to retire from local authorities because he thinks they are too old or have served too long. The Minister should grant a gratuity to every local authority member and thereby recognise the contribution made to the local authority system by councillors.

I welcome the setting up of strategic policy committees. I suggest that elections to local authorities be held every six years. The Minister has indicated that the term of SPCs should be two years. A local authority with a term of five years would in that case not be practicable.

Urban district councils have been poorly treated in the proposed changes in local government. Little or no power is devolved to them. I hope the Minister will take another look at the make-up of urban district councils. Bringing them into SPCs was a last minute thought. It is not clear if the Minister proposes setting up an SPC in every urban district council area. Will there be a population baseline for the establishment of SPCs and will some urban district council areas have more than one SPC or as many as they like?

The Minister has not referred to Oireachtas Members who are also members of local authorities. I would like the Minister to comment on speculation that measures may be taken which would affect public representatives who hold this dual mandate. I ask the Minister to re-examine the gratuity scheme for councillors and to consider the introduction of a pension for them. Councillors should be rewarded with a pension.

I welcome the Minister. He has brought in much legislation for the betterment of local authorities and I compliment him for his work. He has met with the local authorities and explained to them his intentions for reform. His experience as a local authority member is coming to the fore. He is well aware that local authorities have been starved of funds and he is putting funding mechanisms in place.

Local authorities were concerned about the capital programmes. Although they welcomed the programmes and the various grants they received, they were concerned about the running costs of providing water, refuse and other services. Although their cost was eating into local authority revenue, they had to be funded because they are essential services. However, the county roads suffered. I compliment the Minister for putting in place the measure to use money from car tax to fund the roads. It is difficult to sell a 3 per cent increase in road tax to the public.

I compliment my local authority for the work it has done since the beginning of this year on the county roads in many places. I am a little concerned that many areas may have to wait until 2005 before their roads are improved. An approach might be adopted whereby at least the worst stretches of every road might be started and then completed at a later date. I am delighted that funds will be made available.

The measures to ring-fence funds are important. I would like more clarification from the Minister on the changes that may have to be made. I have spoken many times on the need to get value for money from local authorities. I felt that works may have dragged on for too long and were carried out inefficiently. What has the Minister in mind in this regard? Will local authorities have to contract out road and footpath works, for example? Many people criticise local authorities for the slowness of the works they carry out. However, whatever work they have done has been excellent and I compliment them for it.

I am interested in the pilot study undertaken in Galway County Council. The results of the study in terms of discretionary or statutory services will be interesting. It is a brave undertaking and will be essential for the future if extra funding is needed for local authorities. In the near future new European regulations on refuse services and a recycling programme will be put in place necessitating extra funds for local authorities. The smaller dumps in use at present are being filled and closed and the dumping of refuse is being centralised in large dumps. Nobody wants a dump in their area but we need to dispose of refuse nonetheless and this service must be funded in the future. The amounts being collected by local authorities for their refuse services will be totally inadequate to fund capital programmes. New systems will have to be introduced in the near future.

The retirement gratuity is a welcome measure. The Minister is the first to recognise the contribution of county councillors. Many people receive a gold watch or other reward when they retire in recognition of their services. Councillors give good service to the local authorities and the people who elect them and they are put to the pin of their collars to break even given their expenses for carrying out their duties. People are demanding and they expect their problems to be addressed with haste. Each telephone call to a Department in Dublin may cost a councillor £5 or £6. The public does not realise how expensive it is for councillors to do their duty. Perhaps the Minister would consider a system whereby councillors could telephone Departments at local rates.

I am glad provision is being made for those who wish to retire from local authorities. I did not like the unfair remarks about the Minister seeking to remove the senior councillors to make way for younger candidates. When I was chairman of the General Council of County Councils in the mid-1980s I sought to put forward proposals for a retirement scheme for councillors and I have pursued that issue since. I am glad the Minister decided to do something to recognise the service given by councillors to their counties. I am also glad that councillors are to be rewarded satisfactorily.

If a councillor has given perhaps 20 years service, having been elected at a young age, before losing his or her seat, some system should be put in place to reward that person. The mid-40s is a young age to retire from public life. Senator Walsh proposed a system similar to that in operation for Oireachtas Members.

Efficiency in county councils is mentioned in the Bill, and this was a feature of past Governments' dealings with county councils. I was on deputations to other Ministers for the Environment who said that if a council was well run, it would be rewarded. I have not yet seen that happen, but I have seen the opposite. Councils have been badly managed, borrowed money and did not collect water or service charges, yet those have been treated the same way as those which were efficiently managed. Kerry County Council was the first to introduce refuse and sewerage charges because we needed revenue to maintain our treatment plants. However, we were not rewarded for introducing these measures. The Minister should examine this matter. Councils that are well run should be rewarded from the motor tax fund. Approximately £50,000 to £100,000 could be allocated to such councils at the end of the year, and those sums could do extra work for the roads.

I commend the Bill. It is a great day's work.

I wish to share my time with Senator Coogan.

Is that agreed? Agreed.

I welcome the Minister, though I may not be able to give the Bill as enthusiastic a welcome. This is an appropriate year for reform of local government, as 1998 is the centenary of its establishment. The Minister mentioned that this was one of his reasons for proposing the postponement of local elections until 1999 in order to bring in reforms. There could then be a statutory and constitutional basis for the local elections to be held on a five-yearly basis, coinciding with the European elections. I agree with those sentiments.

This Bill has four main concerns: funding, the postponement of local elections, changes to local authority recruitment and the proposed retirement gratuity for sitting councillors who will not be standing in the next election. Funding is the most important issue. Any member of a local authority, or any ordinary citizen, will know that funding of local authority services is a matter of considerable concern and has been for the last two decades. The Minister will know that the problem, in its present drastic state, arose when his party abolished domestic rates in 1977. It has been impossible to find an adequate alternative since then, which is what this Bill seeks to do. The effect of that abolition was to emasculate local authorities in relation to their activities, resources and funding. In order to do something about the situation they had to impose service charges, which were imposed on a relatively ad hoc basis. Some local authorities imposed charges and others did not, and there was also disparity in the amounts collected. Dublin did not impose charges at all and was seen as being out of line with other local authorities which envied Dublin's situation.

The fallout led to political bitterness about the situation. The ordinary taxpayer felt double taxation was being imposed while services were declining. There was a parallel source of funding for community-based programmes such as the Leader programme and the partnerships, which were seen as more participative and democratic than locally elected representation. An artificial dichotomy developed whereby representative politicians were seen as the problem. Those who had not been elected were seen participating in community politics and were having money channelled to them, and they were seen as the "good guys" and as getting the job done. This has been going on insidiously for over two decades, largely because local authorities have been largely dependent on central Government, the rate support grant and the commercial rate, which varies from area to area. It was never sufficient, because the central support grant was not enough to make up the gap.

The Minister's predecessor, Deputy Howlin, did a fundamental review of local government which dealt with the operation of local authorities, the difficulties in putting policies together that could be delivered on and funding. He came up with motor taxation as a method of ringfencing a certain fund. The Department of the Environment agreed to putting that fund aside exclusively to fund local authorities.

This idea was different from the present Minister's approach. Deputy Howlin proposed that 80 per cent of the funds would go directly to the local authority areas in which they were gathered. There would then be an equalisation fund of 20 per cent. The effectiveness of the proposal was based on local authorities collecting and retaining money to be spread evenly by the equalisation fund across other local authorities who might not gather as much motor tax. While the Minister includes direct funding from the Exchequer and motor taxation, his proposal falls down fundamentally because it hands over to the Minister the exclusive right of distribution of money to each local authority. He has identified the same source of money as the former Minister, Deputy Howlin, but instead of ringfencing it and leaving it with local authorities for distribution, he has decided to distribute it. Responsibility is returned to the Minister and central Government and we are back to square one where every local authority will have to wait to find out how much money it will get before it plans its spending.

Section 3 is extremely blunt about this and states "The Minister shall manage and control the Fund". This is outrageous. If we are to have local government, the local authority must be able to manage the fund. What is the sense in ringfencing local authority funding if the management of that funding is taken away from it? Section 3 states "The Fund shall consist of such accounts as the Minister may determine". All the good work the Minister has done in terms of identifying the fund and putting money into it is taken away by reverting to central Government. That is my primary complaint about this legislation. Otherwise, I support it. However, we are falling back to where we were.

I attended a meeting of the General Council of County Councils recently and there is concern about the precondition imposed whereby somebody must indicate they are going to jump off a cliff before they are entitled to a gratuity. In other words, someone who stands and fails to win a seat in a local election will not be entitled to a gratuity. This precondition is unnecessary and the gratuity should be given on the basis of services rendered. People should not be prevented from standing nor should they be penalised if they are brave enough to put themselves before the electorate and fail to be elected.

I thank Senator Costello for sharing his time. I will be brief because the Minister was in the House the week before last to address a motion I tabled on this issue. He described it as a back door method of introducing the Bill. It may have been as it was the only opportunity we had to speak on this issue prior to the introduction of the Bill. I tabled that motion to give the Minister an opportunity to think about some of the issues we intended to raise before the Bill was introduced and before the concrete set. To a great degree, I am afraid this has already happened.

Like previous speakers, I question the manner in which the Minister has introduced funding. The previous Government introduced an adequate method of funding which was acceptable to everybody because it decentralised funding and allowed local authorities decide how much they would get. This Bill ringfences funding but also restrains it because the Minister has the last word on how it is distributed. We do not believe that is the way to do it.

The Minister, when in Opposition, was against the method of funding we introduced as he said he did not want to see local authorities hitched onto the back of the family car.

I still believe it.

He has come a long way from that to introducing legislation which is an unnecessary modification of the original Bill introduced by the previous Government.

Everybody recognises the contribution, often unrewarded, made over the years by local authority members and they have only recently been given a certain amount of allowance. While I accept the Minister is a former member of a local authority and is committed to local government and democracy, in this Bill he has asked us to vote blindly because we do not know what he will do next. We do not know the sums involved or what will happen.

One of the Members of this House would describe himself as a very young man. He has 20 years local authority service, yet he could be tempted to leave. Other Members may not describe themselves as so young but they have experience and a contribution to make. However, this Bill is tempting them with a carrot and a stick. The carrot is the gratuity and the stick is that if someone decides to run for election he or she will not get it. This is wrong and unjust. Anybody who has given service to local government deserves whatever gratuity is there to be paid. If a person decides he or she will not accept the gratuity, runs for election and fails to be elected, he or she will not get that gratuity. This is also wrong.

If someone gives service and retires during the term of office of the present local government, will they get that gratuity? By retiring they are not running and are doing what the Minister wants them to. Members who have died in service should also be recognised and their families rewarded. If someone runs and is elected, how is a gratuity continued? Does it start afresh or is the 20 years previous service taken into account? Will the Minister introduce a system whereby local authority members will receive a payment? If he does that — and I am not averse to the idea — the person will pay taxation and will be entitled to contribute towards a pension fund, which is right.

The Minister must inform us of the sums involved. He will have to be fair and ensure that those who run for election and are not elected and those who have retired will receive a gratuity. These issues must be addressed and clarified. If they are not, we will not know what we are voting on.

I propose to share my time with Senator O'Brien.

Acting Chairman

Is that agreed? Agreed.

I welcome the Minister to the House and I welcome this Bill. We have been looking for local government reform for a long time and this Bill is a major step in that direction. For many years local government has not functioned properly. The main reason for this is lack of funding. The provision of funding as outlined in this Bill is welcome and I compliment the Minister on it.

The 25 per cent increase in funding for the financial year of 1998, compared with 1997, is a big one and is the type of injection of funding which local government has needed for many years. I take Senator Costello's point that for many years funding has been the main problem. However, this is a major step to redress that. I look forward to the time when local authorities will be able to provide a service to the public.

A fund of £600 million in any given year is an extremely large one and will do much good in providing the service people require. The fact this fund is ring-fenced is to be loudly applauded. I do not share the concerns expressed by Senator Coogan. Ring-fencing the fund means the money will be there for local government so it may plan ahead. One of the difficulties local government has had over the years is that it was not in a position to plan. Given the greater and growing requirements on local authorities to provide more expensive and better facilities to tackle pollution, waste control and environmental controls generally, the requirement of raising the fund in line with the consumer price index may not be sufficient to provide these services on an ongoing basis. I would like the Minister to address that point.

The fact the Minister seeks to introduce a system of greater efficiency in local authorities is welcome. Auditing systems always help and local authorities which do their job well should be rewarded. We do not want a situation where councils work on an ad hoc basis getting a few pounds to construct a roundabout only to find two or three years later that it is located in the wrong place and must be moved five meters. With the auditing systems, we are less likely to have those problems in the future.

The provision of finance for non-national roads is welcome. Non-national roads, particularly in rural constituencies, are in a bad state. While certain improvements have been made in recent years, we look forward to greater improvements in the years ahead. We will also have a system where road users will pay for these improvements. That is a better system in that those who get a service should be prepared to pay for it and not those who do not use it.

As regards minor roads and laneways in rural areas, some local authorities have worked a scheme where those living along laneways located in high altitude areas, the maintenance of the surface of which is difficult because of water flowing down them, have been forced to provide money, materials or work to have the road upgraded. Will this unfair system continue? These people are already paying road tax which should be sufficient. They should not be deprived of a proper road system because they live in particularly remote areas.

I welcome the equalisation of the fund because we, in Carlow, have suffered badly from the system in place in the past. I have spoken about this matter here on a number of occasions. Carlow town has suffered enormously compared to towns of similar size and did not get the funding other towns received. With the commitment to equalisation I hope Carlow and other places will do considerably better and that the local authority will do a better job in the future.

I do not like the idea of postponing local elections and the commitment to hold elections every five years is a good move. I accept it must be done on this occasion because I am a strong supporter of the strategic policy committees. These committees will provide local authorities with the opportunity to call in expertise in given areas from outside the council to make decisions. It will also give them the opportunity to bring in interested bodies, such as people with disabilities. I have seen footpaths constructed with signposts located in the centre of them and people could not manoeuvre their wheelchairs around them. Such daftness will stop when somebody in a wheelchair is at a meeting and points out the problem. People who make and implement these decisions have not had to use a wheelchair and therefore do not think in that way. These committees are a positive move.

As regards section 7 — this might not concern the Minister directly — it is fair that local authorities will be allowed to deduct expenses incurred collecting taxes. However, businesses and employers deduct PAYE, PRSI and VAT. They do the work of the State but do not get any recompense for so doing. Perhaps the Minister will raise this point with the Minister for Finance to see if the trend being introduced here could be introduced across the board.

I wish to refer to the retirement of councillors from local authorities and the gratuity the Minister proposes to pay those who opt to retire. What will happen if somebody opts to retire but is then appointed to a strategic policy committee? Will they lose the gratuity? I compliment the Minister on a good job. This move will enhance local government in the years ahead.

I welcome the Minister and congratulate him on the Bill. Local government is the one facet of government which touches every citizen, be it the condition of the roads, the quality and quantity of our water supplies, the availability of moderate sewage treatment works, the provision of quality housing, car parking, play and amenity facilities, libraries, fire stations, fire services, etc. It is important, therefore, that local government provides these services to a high standard at an affordable price. This Bill will achieve that balance and I congratulate the Minister in this regard.

We must endeavour to maintain a balance in terms of population between urban and rural areas. It is vital that progress is planned to benefit urban and rural communities equally. Dublin must not become a sprawling and cluttered city while the country is denuded of population. With improved roads and facilities it should be possible to reside and work in rural areas or to commute to Dublin in comfort. This is the way of the future. Local government officials must work with Telecom Éireann, ESB, Bord Gáis and so on. It should be possible to provide services at the same time and avoid disruption and waste as a result of numerous road openings.

The decision to hold local elections in 1999 is welcome. Having obtained the funding and support envisaged in the Bill, I am sure local authorities and vocational education committees will face the new millennium with confidence.

The Bill is worthwhile and it looks towards the future. I am privileged to speak on it because next year I will have served on Monaghan County Council for 20 years.

I will write a cheque for the Senator now.

I will have something to say about that later. The system of funding provided for local authorities in the Bill is satisfactory. Without adequate funding, local authorities cannot function properly. The role of local government and that of its elected representatives must be acknowledged by everyone. I welcome the provision of retirement assistance to councillors who retire after a period of dedicated service. However, I urge the Minister to consider offering this provision to councillors who run for election and are defeated at the polls in June of next year. Those who show continued dedication to serve on local authorities but are defeated at the elections must not be discriminated against.

Senator Gibbons referred to county roads and lanes. It is important that people who are disadvantaged by virtue of the fact that they live a long distance from main roads should be catered for in the same way as those who live near regional and major roads. I again congratulate the Minister on the Bill.

Acting Chairman

I congratulate the Senator on his 20 years of service at local authority level.

I congratulate the Minister on bringing this new deal for local government before the House. I have great confidence in his approach to local democracy because he rose through the ranks and there is no better way to learn the nature of local democracy and politics. I am not enamoured of those who manage to rise to power through a system which does not provide education in respect of the various elements of political life. With that in mind, I feel confident in speaking on the Bill.

We are discussing a new system of funding for local democracy. I was elected to Dublin County Council in 1985 and I am still fighting to obtain additional funding for my area to have roads and paths completed, open spaces cleared, new lights provided and problems with planning resolved. On each occasion I table a motion I am informed that due to lack of resources or manpower the local authority is not in a position to carry out the work required. I attended a deputations meeting earlier today which dealt with three projects — clearing up an estate and open space and carrying out repairs to lighting — I have had on the agenda since 1994. I was again informed that due to lack of resources and manpower the work cannot be carried out.

I hope the Bill will place local democracy on a strong footing and enable us to reflect the views of those we are elected to represent. Under its provisions, funding for local authorities will come from two sources, namely, motor taxation and the Exchequer. This will ring-fence local government finances and, as the Minister stated, ensure value for money. A great deal of wastage occurs in respect of certain projects, which is not one's fault, but we must ensure that money is not squandered.

Councillors will have a new role to play and their power will be enhanced in respect of the new system. This will strengthen their position and make their job more attractive, which in turn will encourage an influx of new blood into local government. Many members of the community are educated and they understand the problems we face. In fact, they can get on well without councillors. They often bypass us and contact county managers or roads managers directly to have problems resolved. It is important to ensure that councillors will not be bypassed in the future and also that they should be in a position to reflect the modern nature of local government.

An integrated approach is needed. Too often, agencies have been established in the CODAN areas. I am not familiar with activities of such agencies because they fall outside my area of interest. As a result, despite my membership of South Dublin County Council, I only know what is going on in my local area. However, I might be asked to vote on an issue into which I had no input because it was dealt with by an outside agencies involving officials and people from my area but not county councillors. I am glad that an integrated approach will be taken in the future.

I welcome the fact that we will be more customer-friendly and that there will be greater transparency. We will be able to bring officials out into the community and bring members of the public into the council. Very often these groups were placed on two platforms and were never allowed to meet for fear that the council might have to adopt a defensive stance in respect of a particular issue.

I also welcome the fact that elections will be held every five years which means that councillors will not be subjected to the whim of Fianna Fáil, Fine Gael or Labour Ministers in the future. Many people have informed me they are pleased that elections will be held next year because they believe certain councillors have been representing their areas for too long. The holding of elections is important because there have been many co-options into the system as councillors have moved on, resigned or gained better employment. However, those who are co-opted do not hold a mandate and they are not known to the public because they were selected and elected through the party system. I am not convinced this is a good way to do business. It is not democracy because the public did not have the opportunity to elect these people. For that reason, I welcome the fact that elections will be held every five years.

The Minister referred to the retirement gratuity, about which I am concerned. The Bill appears to state that if a person has spent 20 to 25 years as a member of the local government system they should consider retiring to allow an influx of young blood. That is acceptable on one level but I am not sure we should become obsessed with youth to that extent. Sometimes experience is terribly important. For example, experienced councillors will often be better able to deal with a county manager than their youthful counterparts.

I was talking about young women also, not just young people.

I am aware of that. New blood, both men and women, will provide a good mix in the next local authority. While there is a once off offer of a gratuity for those who wish to retire, perhaps something similar could be offered to those who failed to get elected but had given 20 to 25 years service.

I am shaking my head, not nodding it.

I did my best to get the Minister to nod his head. However, this is separate to the Minister's introduction of a new package. Perhaps it may include something for such people which is not covered by this Bill.

The Minister referred to a pilot scheme in Galway which he may use as a model for the implementation of this legislation. Dublin County Council was split three ways over the last four years. South Dublin County Council has been stretched in what is the fastest developing county. In consequence, it is very short of staff and very badly resourced. Will the model in Galway be used as the criterion for assessing what is good in that situation?

I congratulate the Minister on this legislation. I am confident that whatever will be passed will be implemented and that we will have sound local government in the future.

Given the way the Minister is conducting his Department he will be returning again and again to this House. For the first time in generations he has decided to undertake a root and branch reform of local government. The times demand such reform and this will be one of many Bills.

The Minister has served and suffered in local government. He knows the pitfalls and frustrations. A recent meeting of my own local authority discussed cleansing and weed killing. We are all aware of weeds growing on the sides of the roads. I said that I had seen the parks section pouring weed killer around trees in my local area while ignoring the weeds growing from the gutters and channels. Another example of similar practices is the cutting of grass on road verges by the roads and traffic department of Dublin Corporation while it will not cut grass in parks. It is impossible to initiate change in this area — it is a case of the irresistible force meeting the immovable object. It is frustrating to see one's area deteriorate when all that is required is not extra money but a reallocation or managerial review of resources.

Given this context, I welcome the proposed establishment of area committees. They will work very well in Dublin city and in other local authorities. Local authorities will be able to identify action to be taken on problems that are specific to their areas.

The Minister is aware of my doubts on the way the special policy committees are envisaged. I had envisaged them as being similar to those in America. They would be committees with power to call witnesses and interested parties to discuss policy matters and make submissions.

The fund, which will initially have £270 million, is not insubstantial, although it only amounts to what Dublin Corporation would spend in a year. Will the expenses for managing it be allocated from the Department's budget or from the fund itself?

Local authorities will have to be customer focused in ways they have not been since the foundation of the State. Indeed, like my authority, they tend to be policy focused and, once initiated, tend to be cast in stone making it very difficult for councillors to amend it. This legislation will allow for more debate in this area.

The operation of the planning legislation sometimes ensures that common sense decisions are not taken because councillors can be locked into accepting the view taken by a planning officer. I do not refer here to major planning applications involving millions of pounds but to small matters such as extensions to houses. The person making the planning application or the councillor has no comeback against a decision made by a planning officer and it is impossible for a councillor to act on behalf of a constituent and put a common sense case. The Minister will address this issue in subsequent legislation and I wish him well.

I appreciate the difficulties faced by the Minister in introducing new legislation regarding local authorities and local administration. This Bill covers much ground and is essentially concerned with tidying up aspects of local government.

Community groups have been welcomed to the decision making process at European, local authority and Government level. However, members of local authorities, including myself, are rightly concerned about the diminishment of their input in the many bodies which have community involvement, including county enterprise boards, strategy committees and other committees. It was never intended, for example, that the membership of some of these bodies would include 16 community people and officials and only four elected members.

I sit on a county enterprise board with 16 members and four council members and chaired by a county manager. It is hard to accept that local authority representatives, who have been elected by the people, are precluded from chairing the board. The person who implemented that legislation did not have his or her feet on the ground. That is a slur on and an insult to any elected member of any authority.

Members know what it is like to stand for election and fight their corner with all the different interests. There are people on my county enterprise board who are only there to make up the gender balance. Such people would qualify to be the vice chairman if the county manager did not turn up but the four elected members could not be considered for the position. The Minister will have to face the fact that that is unacceptable. I do not wish to go over ground which has already been covered but I would like the Minister to clarify the position.

An article in the Farmers' Journal dated 2 May, headlined “More power for county councillors — a step backwards”, states:

Giving local authorities responsibility for some of the rural development incentives would be a big mistake, warned Anthony Leddy, chairman of the umbrella Leader group.

That is an awful statement by a person who was not elected but was selected by a political party, in other words, he got in by the back door. He has no responsibility and can criticise the Government and the Minister of the day. He is answerable to no one as he does not have to seek election. If it is within his power to do so, the Minister should rectify that situation. We are not far from anarchy or dictatorship. Things are not very good in some countries which have dictators.

I have travelled around and I have listened to the commissioner for regional development commending the community groups, which I also commend. Many community groups in my county and around the country have received no gratitude for giving the best years of their lives, and I am not implying they have not done very useful work.

The Minister will diminish the role of elected representatives if he does not clarify the situation and he has only one opportunity to put this right. He is energetic and I have total confidence in him to make the right decisions. We probably could have no one better to tackle this major problem. I have had opportunities to say this at my parliamentary party meetings and other places but I must also say it in this Chamber. There is concern about this among those I represent. Will the Minister, if it is in his power to do so, allay the fears of those who have given the best years of their lives to membership of local authorities?

I have been a Member of this House for a long time and I remember when we received 20 franked envelopes a week. People are talking now about the pay we receive but we worked for nothing for the best years of our lives. Local authority members are in the same position today. If someone wants to get their mother into a Dublin hospital, a local authority member, by virtue of their nature, will telephone the hospital and the person's doctor at a cost of perhaps £5. That is the procedure followed in rural areas where local authority members do not offer to write a letter but respond immediately and try to give satisfaction. That is the nature of the job of a local authority member.

The Minister has long experience in this area and knows what I am talking about. I do not need to give him a lecture; I am just outlining the position as I see it. It is important for the Minister to clarify the position beyond a shadow of a doubt. He must give recognition to those who have given everything for nothing. It is a thankless job which involves putting up posters, collecting money and getting abuse. Politicians are lambasted by those in the media who would like to be in politics. RTÉ never misses an opportunity to criticise and downgrade everyone in public life. However, a good handful of people in RTÉ over the years, whom I will not name, tried to get into politics but did not set the grass alight.

This is fundamental to the structures of democracy on the ground. The democracy which we cherish so much is at stake. I am sure this has all been said before but I wish to put on record my strong feelings about this. I have been a local authority member for 40 years and I should have learned something in that time. Local authority members have been badly treated. They received a paltry recognition a couple of years ago but most of them were out of pocket for postage and telephone bills. I have total confidence the Minister will recognise there is a big problem here and will not miss this opportunity to help grassroots public representatives.

Acting Chairman

I congratulate Senator McGowan on 40 years as a local authority member. I hope the gratuity is pro rata.

It is not easy to speak after someone as experienced as Senator McGowan. I join in congratulating him on his long period in public service. There are a number of people around the country who have given long and good service to the public and their respective parties.

I welcome the Minister. I am particularly pleased by what he said this afternoon. Nevertheless, I wish to refer to a couple of aspects, one of which is the role of the local government member, to which I am sure many Members have referred. The role of elected local government members deserves to be recognised. As I noted previously, the Minister served for a considerable period on a local authority. He is aware of the ins and outs of the system and also, as Senator McGowan mentioned, the amount of criticism levelled at local authority members. However, this is a test of a person and if he or she stands the test, it proves they are good people. Local authority members will be criticised but that does not matter. It does not make much difference. Members continue to do their jobs as well and as honestly as possible.

A number of multinationals want to set up superstores in various parts of the country. Will the Minister take on board the urgency of the situation? Such superstores have been found to be undesirable developments in England and other parts of Europe. They have laid waste to town and city centres and I appeal to the Minister to take action on this matter. I reflect the views of many elected members of local authorities throughout the country on this issue. The Minister should introduce legislation to control the development of superstores. Successive Governments have implemented urban renewal schemes. The aim of these schemes conflicts with the development of superstores in green field areas. They will undermine progress and I urge the Minister to take action.

The Minister mentioned funding. As a county councillor I am concerned about the waste management strategies that must be adopted by county councils; they will be expensive. In my area charges have been increased from £60 to £100 in the last 12 months. It appears they will increase to £350 or £400 in the next three or four years to ensure the scheme is self-financing. If that is the case, as a result of the need for waste management strategies, householders will be forced to bear a huge cost. Somebody must pay for the strategy and I ask the Minister to address this area in his reply.

Regarding the management of waste water treatment plants, the Department is required to ensure that EU regulations are implemented. However, from where will the additional funding come to run the plants? Has sufficient funding been earmarked in the Minister's proposals to achieve the desired objective?

A number of additional responsibilities have been placed on local authorities over the years. However, funding was not provided for them. It is important services are provided at local authority level. The authorities are at the coal-face in terms of providing local government to the people. If work cannot be done because of the absence of funding or because other areas have been prioritised at local authority level, problems arise.

In common with most local authority members, I welcome the ring-fencing of the funds. I also welcome the redirecting of the motor vehicle taxation funds to county roads. This is long overdue and I thank the Minister for this move with which most local authority members agree. I support Senator McGowan's point about the enterprise boards and the regional authorities. It is the conviction of many local authority members that they should be brought back under the umbrella of local authorities. Administrative staff and existing structures are available and local authorities are capable of the work. I urge the Minister to consider the merit of these views on this matter.

I welcome the Bill. Sadly, I have never served on a local authority and, therefore, I will not receive a gratuity. However, I take cognisance of Senator Ormonde's point about the value of experience. I intend to inspect the Pembroke ward on my way home and consider the possibility of contesting the election next year.

I am glad the Minister has examined the issue of expenses. It is elitist that people on local authorities are expected to serve with little recompense. I served on the Eastern Health Board and I realise people put a great deal of time and effort into their membership of boards. I congratulate the Minister for considering this area realistically. I will not delay the House. I must leave to inspect my potential ward area.

I thank all who contributed to the debate. It is an indication of the interest in this area that Members contributed less than two weeks after a full debate on local government and introduced a number of new issues and ideas. I welcome their response to the Bill.

I will endeavour to address the various points raised during the debate and also the issue of local funding and the gratuity in which Members are particularly interested. I do not think less of the other issues raised but some of the points are more easily addressed. A number of them will be dealt with in future legislation.

I take Senator Fitzpatrick's point about planning laws. The Department is currently in the middle of a complete overhaul of the planning and development laws and a major Bill will be introduced towards the end of the year. A number of other shorter Bills relating to this area may be introduced in the interim. This will give Members an opportunity to tease out the difficulties they highlighted.

Senator Walsh mentioned the selection procedures adopted by the Local Appointments Commission and said there should be more local involvement. I accept the Senator's view but there has been a clear divide up to now in relation to personnel and industrial relations matters in local authorities. The vocational education committees were cited as an example of what might happen at local authority level. However, the position in the vocational education committees is not the same. They have an authority with outside membership to appoint teachers to schools. The procedures in place for chief executive officers are similar to those for managers, secretaries, etc. I am reluctant to take the route of involving elected members in this procedure. That is not to cast aspersions on elected members but it could cause difficulties for them. They could come under many pressures as regards personnel arrangements, not that they are not used to that, or could start on the wrong foot with officers appointed to councils — for instance, people could be seen to be in favour or against those appointed. It would not be helpful to introduce that measure as it could be divisive.

Senator Burke asked about more money for secondary roads. That is more appropriate to another debate but I accept the point. It is a function of the NRA but it is a function of the Department to make the money available in the first place. I am conscious of the matter.

The litter question, also raised by Senator Burke, is also more appropriate to another day but I have not missed an opportunity to talk about it in the last 12 months. I believe this country is a disgrace as regards litter. Everyone complains about it but no one takes personal responsibility. Every piece of litter in our towns and villages is dropped by a person, not by the Government or the county council. Our record in this regard is abysmal. Certain people in RTÉ were criticised during this debate but I thank the station for highlighting this problem in its news programmes in the last few weeks. RTÉ will be continuing this coverage — it is taking an interest in the Tidy Towns Competition this year and will show the good work being done. When we criticise certain things we should also acknowledge the good work being done. People will have to take personal responsibility for litter and local authorities now have the power immediately to enforce the rules, regulations and laws under the Litter Pollution Act.

I do not want to stray across the line from the Executive to the Judiciary but there are hopeful signs in the way judges have treated cases with the proper seriousness — maximum fines were imposed in at least two cases and substantial fines in others. People must realise that littering, even cigarette butts and chewing gum, is a slight on us all and shows a lack of pride in our towns and villages; until they do, our current problem will continue. The sooner people realise that they, with others, are personally responsible, the better.

I was asked about an easy payment system for motor tax — we are working on it and trying to introduce it. A new computerised motor tax payment system is being tested and in that context we are looking at alternative methods of payment. Some local authorities, including Wicklow, Limerick and Meath, currently accept credit cards and the new computerised system will facilitate that. The difficulty with an easy payment system is that if people decide to default, one has to put procedures in place to reclaim the tax disc. That might not happen in many cases but we must be aware of it.

The strategic policy committees were raised, directly or indirectly, by several people. I thank Senator McGowan for bringing that statement to my attention. I have severe difficulties with anyone who has difficulty with giving power to elected representatives and that was an appalling statement for anyone to make. People should be trying to make systems more democratic and transparent, and to make people answerable through the democratic system for their actions. I am horrified that someone thinks the system should not be made more democratic. The gentleman in question belongs to groups involved in the Leader programme and I hope he is not stating the general view of those groups.

I asked local authorities to involve community and voluntary groups through the SPC system in a partnership way and am pleased with the progress made so far. They have responded to the call and embraced the concept of the committees. I emphasised their importance to such an extent that some councillors thought I was suggesting they would not embrace this concept, whereas apparently it is some people in the community and voluntary sector who have difficulties with it. I believe the opening up of local government through the SPC system, and also through local authorities consulting more people, will be good for the system. If other people have difficulties with this it is a problem they will have to address. The local government system has shown over the last 12 months and will show that it is capable of partnership. If other people are not so capable I would cast doubts on them holding the positions they do.

Senator Burke asked for my views on the dual mandate but those are well known and I do not intend to delay the House with them. I do not believe in the dual mandate and I intend to do something about it in the context of the next local government Bill, which no doubt will have a lively passage through both Houses.

It was wonderful to hear Members of the Opposition talk about the need for local sources of finance for local government — Senator Costello was particularly strong on this point. As I said elsewhere, I would be more inclined to believe that rhetoric if his party had matched it with action when it was in Government. During the term of the previous Government the Labour Party removed the only source of funding, apart from rates, available at that time to local authorities. The loss of £60 million caused the problem but it also threw out the concept of any local funding system for local government. It accepted the argument on double taxation and proceeded apace to remove any discretion local authorities might have had. Psychologically, it caused huge damage to the local government system which will not be easily repaired. It is not open to me or my successors to return to a system of local financing for local government. When that system went, the only way to finance local government was through the Exchequer.

I heard wonderful comments about the system put in place in 1997 and acknowledged the then Minister had achieved quite an amount by getting motor tax earmarked specifically for local government. However, I criticised him and believed strongly then and now that the local government system should not be towed behind the family car. Senator Doyle suggested one plus of the distribution of the rate support grant was that it was done in a standard and uniform way prior to the 1997 Bill but I contend this was one of its inherent weaknesses. The very fact each local authority was locked into its 1977 position and the amount of money was increased on a yearly basis, irrespective of needs or resources with few percentage points given across the board annually, was wrong. It took no account of needs or resources. Over a few years when that system was in place the amount of RSG reduced. If State funds are to be distributed fairly, they must be flexible and take account of changes in society. It cannot be locked in a time warp.

We should be under no illusion about the wonderful system in place. The motor tax outturn in 1997 was £284 million. Lorries and heavy vehicle tax revenue or driving licence fees were not included in the 80 per cent retained by local authorities. In truth 65 per cent of the total was allowed to be retained by them while 35 per cent went into the equalisation fund. The bulk of the money had to be paid out to local authorities simply to replace the income lost from the abolition of the rate support grant and service charges and inflation each year. There was little buoyancy in the system introduced by the Minister, unlike mine.

In addition, the Act was so cumbersome as to be very inefficient administratively. Under the system local authorities collected a portion of motor tax, were allowed to retain 80 per cent of the tax on private cars and motorbikes while the balance of 20 per cent was submitted to the equalisation fund. Then local authorities had to start talking to one another to find out whether they would increase it. The suggestion that allowing local authorities to retain 80 per cent of car tax gave them a degree of freedom and local discretion is total nonsense. They were getting less in real terms than previously.

For example, Clare County Council would have gained money if it was allowed to keep 80 per cent of car tax in the county and the previous Minister under his Bill returned 55 per cent to the council because it was getting more. The 80 per cent return meant local authorities got less in 1997 than they did previously. The Minister was then going to hand out extra money from the equalisation fund.

Senator Costello was critical of section 3. It is a direct transplant from the 1997 Act regarding equalisation which the previous Minister, a party colleague of his, managed to get through the House when the Senator was a Deputy. Needs and resources will decide funding. The model is being prepared and will be adapted for each local authority. The reasons Galway was selected for this were it has county, urban and borough councils within its boundaries and, as Senator Ormonde said, it is one of the fastest growing regions in the country. These factors are taken into account and Senator Doyle's point that Dublin's problems should be recognised is valid and that is why we are talking about trying to match needs and resources.

I was very direct when asked about the gratuity. This is a voluntary scheme and I am not forcing anybody to give up their seat on any county council. If people want to leave with five, ten, 15, 20 years or more service I will recognise that. Anybody who does not is opting for the new system where they will have a chance when the next Bill is passed of gaining reasonable recompense, a standard payment which they will receive in addition to their expenses. People will be asked to opt voluntarily for one system or the other but they will not have a two way bet. People are being told that now and are under no illusions. They will be given the opportunity between June and September to decide which scheme they want and that decision is final. I do not want to find myself in a position in six or 12 months where an individual will come to me and say he or she was never told about this. People are being given adequate notice and I do not want people talking about me trying to force anybody off local authorities.

Senator McGowan has already told me he has no intention of taking a gratuity after serving on Donegal County Council for 40 years and will continue making his contribution to it. He made his decision even before he knew the value of the gratuity. The gratuity will be reasonable; people have said I should make it reasonable so as not to denigrate councils or insult them. That I am introducing something at all and acceding to requests made to me by LAMA show that I recognise the contribution of councillors and that I do not wish to insult them. If Senators tell their electorate that the Minister will not introduce this scheme except on the conditions laid down and ask them whether he should proceed with it, flawed as it is, they will resoundingly answer yes. I am not discriminating against people and I am giving everyone notice of the scheme.

People can apply for the gratuity between June and September and anyone who was elected to local councils in 1991 or to an urban district council in 1994 and who served during the current council term is eligible. I was asked whether it will apply to those who died in office. It cannot apply to them, only to their estate, provided they served some time in office since 1991. The details of the scheme will be made available as soon as the regulations are available, which will be sooner rather than later. They will be laid before the House and each Member will receive a copy.

I thank the Cathaoirleach for his indulgence and apologise if I have gone over time. I thank Members for their contributions to the debate.

Question put.
The Seanad divided: Tá, 26; Níl, 13.

  • Bohan, Eddie.
  • Bonner, Enda.
  • Callanan, Peter.
  • Chambers, Frank.
  • Dardis, John.
  • Finneran, Michael.
  • Fitzgerald, Liam.
  • Fitzgerald, Tom.
  • Fitzpatrick, Dermot.
  • Gibbons, Jim.
  • Glynn, Camillus.
  • Haughey, Edward.
  • Keogh, Helen.
  • Kett, Tony.
  • Kiely, Dan.
  • Kiely, Rory.
  • Lanigan, Mick.
  • Leonard, Ann.
  • Lydon, Don.
  • McGowan, Patrick.
  • Mooney, Paschal.
  • Moylan, Pat.
  • O'Brien, Francis.
  • O'Donovan, Denis.
  • Ormonde, Ann.
  • Walsh, Jim.

Níl

  • Burke, Paddy.
  • Coghlan, Paul.
  • Coogan, Fintan.
  • Cosgrave, Liam T.
  • Doyle, Avril.
  • Doyle, Joe.
  • Hayes, Tom.
  • Jackman, Mary.
  • Manning, Maurice.
  • McDonagh, Jarlath.
  • O'Dowd, Fergus.
  • Ridge, Thére se.
  • Taylor-Quinn, Madeleine.
Tellers: Tá, Senators T.Fitzgerald and Keogh; Níl, Senators Burke and Ridge.
Question declared carried.

When is it proposed to take Committee Stage?

Committee Stage ordered for Thursday, 28 May 1998.
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