It is a matter for each local authority, including Sligo and Donegal County 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. The elected members of a local authority have direct responsibility in law for all reserved functions of the authority, which includes adopting the annual budget, and are democratically accountable for all expenditure by the local authority.
While it is a matter for individual local authorities to manage their own day-to-day finances in a prudent and sustainable manner, my Department is in regular and ongoing consultation with both Sligo and Donegal County Councils in relation to their financial positions.
Local authorities’ cost and income bases vary significantly from one another. General purpose grants are structured to bring about equalisation over time, that is a position of balance where the financial needs of local authorities are met by their resources and they are able to provide an appropriate level of service to their customers. In determining these grants a number of factors are taken into account including the overall funding available for this purpose, the estimated cost to each authority of providing a reasonable level of services to their customers, the income each authority should generate from local sources and the necessity to provide each authority with a baseline allocation that supports its financial stability.
€1m was held back from the original general purpose grant allocation to Sligo County Council. The subsequent letter from my Department made the allocation of this €1 m conditional on an agreed long-term financial plan to address the Council’s accumulated deficit being adopted by the Council in early 2014. The allocation of the €1 m in 2014 is fully conditional on a realistic and achievable plan which charts a path to long-term financial sustainability being agreed between my Department and the Council in the first quarter of 2014. A similar approach was not adopted in relation to Donegal County Council as it continues to implement a long-term financial plan in consultation with my Department.
