Dáil Éireann Debate, Tuesday - 28 January 2014
531. Deputy Clare Daly asked the Minister for the Environment, Community and Local Government if the restriction imposed on county councils freezing development levies and mandating that expenditure on capital projects had to be confined to the amount of levies raised in a particular year is still in place; and the reason for same. [2575/14]
View answerIn 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.
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 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.
