Dáil Éireann Debate, Thursday - 12 June 2014
149. Deputy Terence Flanagan asked the Minister for the Environment, Community and Local Government his plans to legislate in order to ensure that 80% of all local property tax receipts are retained within the local authority areas where the properties are based; and if he will make a statement on the matter. [25065/14]
View answerThe Government has indicated an intention to move to 80% retention of all Local Property Tax (LPT) receipts within the local authority area where the tax is raised. The remaining 20% of LPT collected will then be applied to equalise the impact of this level of local retention between local authorities.
This year, the establishment of Irish Water presents local government with significant organisational and financial challenges. Service provision responsibilities are moving from the local authorities to Irish Water, infrastructure is being transferred, financing arrangements have altered and local authorities are operating on behalf of Irish Water under Service Level Agreements. These changes must be managed and, in this context, it was necessary to defer defining a certain proportion of the proceeds of the Local Property Tax to be retained in each local authority for 2014.
I expect the Local Property Tax to have multiple benefits, including a more sustainable and resilient system of funding for local authorities and, therefore, a sounder financial footing for the provision of essential local services; greater local scope for financial decision-making concerning service provision; and a strengthening of democracy at local level with a more active relationship between local authorities and local electorates. A stronger democratic relationship and clearer lines of accountability can only have a beneficial impact on service provision from the perspective of the service user.
In 2015, in addition to the changes in water services funding, local authorities will be required to implement changes to their budget process arising from EU obligations, which will require them to prepare draft budget strategies by the end of September 2014 and will also have the power to vary Local Property Tax rates by up to 15%. Together, these are further significant changes to the current local government funding model and it is essential that the impacts are fully assessed and that the effect on overall Exchequer funding is managed appropriately.
My Department is currently considering the local government sector funding model for 2015, including the legislative implications, if any, in consultation with all relevant Government Departments. We will continue to work with local authorities to ensure that they have an appropriate level of information in a timely manner that facilitates their budget process for next year.
