Dáil Éireann Debate, Tuesday - 16 July 2013
849. Deputy Catherine Murphy asked the Minister for the Environment, Community and Local Government the arrangements to be put in place for Town Councils who have funds in a bank account such as Leixlip Town Council; if such funds can be spent prior to their abolition; and if he will make a statement on the matter. [35539/13]
View answer850. Deputy Catherine Murphy asked the Minister for the Environment, Community and Local Government if an assessment has been made of the bank balances of town councils due to be abolished; if so, which ones will have positive balances and what those amounts are in respect of each local authority area; the town councils that are in deficit; what those amounts are; the way it is intended to wind up their accounts; and if he will make a statement on the matter. [35540/13]
View answerI propose to take Questions Nos. 849 and 850 together.
As you are aware, the Action Programme for Effective Local Government - Putting People First sets out Government decisions for a range of local government reform measures, including the decision to replace town councils with a new comprehensive model of municipal governance to strengthen local government within counties and address weaknesses and anomalies in the current system.
While an assessment on the bank balances of town councils has not been undertaken, the level of balance on hand for normal operational purposes is dependent on the relative timing of income receipts from their various revenue sources and expenditure in respect of their current and capital programmes. Definitive details, arrangements and procedures in relation to the financial relationships between district and county levels will be developed in the context of the new local government funding arrangements generally, the implementation of the new sub-county system and the preparation of the legislation in relation to the reform programme.
In February 2009, my Department set out details of the financial requirements for local authorities relating to their overall management of capital and current accounts. These requirements flow directly from the requirement for Government finances as a whole to be managed in accordance with the Stability and Growth Pact, established under the Maastricht Treaty, and the associated limitation on budget deficits. The local government sector must not impact negatively on the General Government Balance (GGB) in any one year. The downturn in the economy and substantial pressures on Government funding generally require a sharp focus in all sectors, including local government, to ensure effective control and management of the public finances. In order to stay within the overall GGB limit, it is necessary for local authorities to maintain both their current and capital accounts broadly in balance. The only restriction on local authorities is that, in aggregate, capital income equals capital expenditure in the year. Balance is only required at an overall level and this allows considerable scope for authorities to draw on their existing capital reserves as an element of their overall investment programme. The precise manner in which capital and current accounts are managed in order to achieve the overall balance necessary is a matter for individual local authorities.
It is a matter for every local authority, including town councils, to determine its own spending priorities in the context of the annual budgetary process, having regard to both locally identified needs and available resources within the GGB limits as set out.
