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Local Government Fund

Dáil Éireann Debate, Tuesday - 18 September 2012

Tuesday, 18 September 2012

Questions (37, 41)

Barry Cowen

Question:

37. Deputy Barry Cowen asked the Minister for the Environment; Community and Local Government the funding originally budgeted for the Local Government Fund in 2012; the total amount estimated to be spent in view of cuts to the grant on the basis of household charge payment rates in each local authority area; the estimated average cut to the Local Government Fund allocation in each local authority area; and if he will make a statement on the matter. [39116/12]

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Brian Stanley

Question:

41. Deputy Brian Stanley asked the Minister for the Environment; Community and Local Government in view of the impending financial problems facing local authorities throughout the State, if he will reverse the cuts in the Local Government Fund and restore adequate funding for the provision of council services to our citizens and communities. [39373/12]

View answer

Oral answers (22 contributions) (Question to Environment)

I propose to take Questions Nos. 37 and 41 together.

I assume that the questions refer to general purpose grants from the local government fund. The two principal sources of revenue for the local government fund are the proceeds of motor tax and income from the household charge. The Local Government (Household Charge) Act 2011 provides that income from the household charge is to be paid into the local government fund. The proceeds from the household charge are being redistributed on an equalised basis to local authorities within the context of the annual allocations of general purpose grants.

General purpose grants contribute towards meeting the reasonable cost to local authorities of providing services to their customers. Some €651 million in general purpose grants had been allocated to local authorities for 2012. It has been necessary for me to withhold general purpose grant funding to local authorities in the third quarter of this year in light of the level of compliance so far this year with the household charge.

It is estimated that there are some 1.6 million residential properties liable for the household charge. As such, if collected in full, the household charge has the potential to raise €160 million annually. As of 14 of September, some €103 million had been collected nationally. A total of €15,695,292 was withheld from the quarter 3 general purpose grant payment. For county and city councils, this represented a reduction of between 1% and 3% of the total general purpose grant allocation for 2012.

I am keeping the income generated from the household charge under constant review. However, it is up to individual local authorities to address any potential funding shortfalls arising from non-compliance with the legislation and to pursue those who may have a liability and initiate court proceedings where it is considered appropriate. It is a matter for the authorities to use their local knowledge to follow-up on non-compliant households in order to maximise collection of the charge. Data-sharing exercises are also underway centrally in accordance with section 14 of the Local Government (Household Charge) Act 2011 and it is intended that data will be used from sources such as the non-principal private residence charge, NPPR, Property Registration Authority, PRA, Private Residential Tenancies Board, PRTB, ESB networks and other Departments, namely, the Department of Social Protection and Revenue Commissioners, to identify households that may be liable to pay the household charge.

I wish to emphasise that local authorities can progressively recoup their original general purpose grant allocation through improved household charge compliance. The final amount of general purpose grants available for 2012 will be revisited and reviewed in the final quarter of the year to take account of the then financial position, including progress on securing an increased household charge yield. I am confident that the level of general purpose grants, together with other Government grants and subsidies and income raised from local sources, is appropriate to meet the costs of providing a reasonable level of local authority services to communities.

As two questions are being taken together, 12 minutes are allocated for them.

I welcome back the Minister and thank him for his response. It is as if nothing has changed. The environment could be described as a new Angola there are that many landmines exploding throughout the country-----

The Deputy's brother would know all about that.

-----as a result of various actions or inactions by the Government parties on issues such as this.

I am mindful of the situation that has emanated from Clare County Council in the last day or two. It now appears to be the policy of local authorities to seek a tax clearance certificate or a household charge receipt when it comes to education grants. Is that something the Minister has ordered his Department to obtain from councils throughout the country and is it the case that we can expect a request for a receipt to be provided for the household charge in respect of all Government payments to be made into the future?

The Minister knows that councillor colleagues in his party earlier this year provided a budget for their constituents on the basis of central Government funding, which in itself had been decreased, on the basis of rate income, which had decreased, and on the basis of planning and development charges, which had decreased substantially. With great difficulty they saw fit to provide a group of services and facilities on their part as a local authority to the constituents they represent. There was ineptitude on the part of the Minister and his Department in terms of the manner in which the Minister devised a very poor system to collect the household charge-----

Has the Deputy a question?

-----and he is now penalising them for something that is no fault of theirs but is the result of the incoherence of his Government.

To return to the bones of my question-----

-----in light of developments in recent days, is it now policy that local authorities and the Departments which hand out funding to those in need will now seek a receipt for payment of the household charge before payments are made? Is that what we have got in terms of this incoherence? Is that where this will get us to? Has nothing changed? Are we to continue with this myriad of disasters one after another?

I wish to congratulate Deputy Cowen on his elevation to high office as Fianna Fáil spokesman for the environment and I wish him well. I hope what we have just heard will not be the way in which he will continue. He will be aware that the reason we have a household charge and a property tax is that it was negotiated by people, who would be well known to him in the Fianna Fáil Party, in November 2010. If we want to continue to have funding for our essential public services, we are obliged by the troika to meet those requirements of the EU and the IMF.

I thank the people of Ireland who have contributed to the almost 66% compliance in terms of the payment of the household charge in spite of provocation by people on the opposite side of the House and ill-informed people who advocated non-compliance with legislation. These are the people who fully understand that this is an essential part of the budget which was agreed earlier this year to deliver local services.

The reason for this charge is well known. It is an essential part of delivering local services. If one does not have money in terms of the budget, services have to be cut and that is what the councillors in the area have decided to do.

Clare County Council and its county management are doing no more and no less than any other county council or city manager. They are putting in place plans to get in the remaining moneys owed to them in respect of the household charge and any other moneys owed to them. That is what any business would do. Otherwise, they are faced with the difficult situation of cutting services. I have incentivised them to do so by saying to them that if they do not increase the level of compliance in terms of the payment of the household charge, then they cannot expect to provide the level of service. That is a matter for the people in the area and for the management in the county council area. Given that the Act states that this is the care of management of the local authorities, Clare County Council has decided to take on board the gathering of information on higher education grants. I understand it is working closely with the local government management agency on the protocols that allows it to do so.

I look forward to the same level of activity in whatever means is necessary to get an increased level of compliance on the payment of the household charge. Otherwise the people who are against the payment of this charge will have to explain why services are being cut.

Students do not own the houses.

An issue arising out of this is that two of the largest local authorities in the State have passed a motion requesting the Minister to overturn this measure. In the case of Dublin City Council, it was passed unanimously, which means that Government party councillors backed the motion. I bring to the Minister's attention also that when councillors sat down to pass their budgets last year and try to carve out as best they could the moneys available to them they were not notified that the local government grant was conditional on full collection of this payment. The Minister sought to implement it in the third quarter on the day we left this building for the recess. That was a cynical move on his part. It may seem to be a clever move, and many people might smile at it, but it was a cynical move on the day the Dáil went into recess.

I have asked about this matter previously, and I know it will come up under other questions about local government reform, because all we are seeing is services and money being taken away from local authorities. Local authorities are in crisis. The morale of councillors of all parties and none is very low. They cannot see where all of this is going. We have been trying to get information about it from the Minister here without any luck; he continues to give the same answers. The morale of local authority staff also is very low with the situation they are trying to deal with.

The Clare County Council situation has been mentioned. The Minister for Education and Skills, Deputy Quinn, stated this morning that he expects other councils will follow suit in the future but that it will be on their own initiative. The question was asked, and I want to ask the Minister directly, if there is an initiative from his Department. Has he advised councils to do this? Has an instruction gone out to local authorities to use the payment of the household charge as a condition for processing third level grant applications or to slow down or speed up those applications? Has the Minister had any discussions with the Local Government Management Services Board on that matter?

It is disgraceful bullying.

I am glad to tell Deputy Stanley that I have not issued any instruction to any local authority in regard to higher education grants, and I understand that moneys have not been withheld at this stage by Clare County Council in respect of higher education grants. I understand Clare County Council is in a position where it asked for a lot of information, not just about higher education, but issues relating to the payment of the non-principal private residence charge, water rates and commercial rates, as appropriate. It gathers information in that way. Clare County Council is doing the same as all local authorities, instructed by me, to ensure we get a higher compliance in terms of the household charge. Otherwise, they will be faced with the consequences of not having the same amount of money in their budget as they had at the earlier part of the year and having to cut their budgets. It is a matter for the local authority members and the management of the local authorities to decide to stay within their budgets. That is what one would expect any good and prudent management of a council to do. Deputy Stanley is the last man who should talk about compliance with an interim property tax like the household charge considering what his party is doing in another jurisdiction on the same island.

The Minister mentioned "as instructed by me" so I take that as a "Yes" to Deputy Stanley's question. Can the Minister tell me if the Data Protection Commissioner has been consulted by his Department on foot of the actions of Clare County Council and, it appears, what we can expect from other councils into the future?

I have instructed all local authorities to collect the amount of money that is outstanding, and he would expect me to do that. He would be very familiar with the charge and the reason we have it. I have asked them to stay within their budget and use whatever means to do that. The Local Government Management Agency is in constant contact, as the agents who are dealing with this charge on behalf of local authorities, with the data protection systems and I am sure it has all of the necessary compliance requirements and protocols in place.

Has the Data Protection Commissioner been consulted?

That is a matter for each local authority under the Act. They will discuss these issues with the Local Government Management Agency-----

Is the Minister aware whether he has been consulted or not?

No, I am not. I do not micro-manage local authorities.

But the Minister is aware that-----

I call Deputy Ellis. We are out of time. Twelve minutes were spent on those two questions.

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