Thursday, 11 February 2021

Questions (95, 96)

Catherine Murphy

Question:

95. Deputy Catherine Murphy asked the Minister for Housing, Local Government and Heritage the analytical mechanism used to ensure a fair distribution of resources and funding to each county; if he will provide this Deputy with the evidence and-or briefing supplied to him to support same; and if he will make a statement on the matter. [7546/21]

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Catherine Murphy

Question:

96. Deputy Catherine Murphy asked the Minister for Housing, Local Government and Heritage if he plans to design a manual of funding streams and to streamline funding opportunities for local authorities; and if he will make a statement on the matter. [7547/21]

View answer

Written answers (Question to Housing)

I propose to take Questions Nos. 95 and 96 together.

As outlined in the replies to Parliamentary Questions No. 333 and 334 of 27 January 2021, my Department engages regularly with the local government sector and with individual local authorities on their financial situations.

The Budget 2021 Expenditure Report, published by the Department of Public Expenditure and Reform, details my Department's Abridged Estimates (Part III), and gives information on the estimated current and capital allocations for 2021 in respect of each relevant programme/scheme, on the basis of the financial provision made for my Department following decisions made in the context of Budget 2021. The Expenditure Report can be found at the following link: https://www.gov.ie/en/publication/32999-expenditure-report/. The Report does not include additional funding for housing purposes provided by certain local authorities from Local Property Tax (LPT) receipts, amounting to some €91.5 million in 2021.

Additional detail on Central Government funding of local authorities is provided in the Comptroller and Auditor General's Annual Report, accessible at the following link:

https://www.audit.gov.ie/en/Find-Report/Publications/2020/2019-Annual-Report-Chapter-2-Central-government-funding-of-local-authorities.pdf

I have no current plans to develop further guidelines for local authorities in respect of my Department's funding streams. The vast majority of funding from central to local government is for specified purposes, relevant to the role of the funding Department or agency. There are established forums through which funding programmes are discussed, such as through engagement with the City and County Management Association. Information on these individual programmes and schemes is available to local authorities through this regular direct engagement, as well as indirectly via the website, publications and announcements.

General purpose funding for local authorities predominantly comes from commercial rates, charges for goods and services and from LPT allocations. Local retention of LPT began in 2015 and since then the overall principles and allocation methodology have broadly remained the same. 80% of LPT is retained in the area it is collected, with the other 20% supporting equalisation for local authorities with LPT bases lower than their funding baseline. Baselines are linked for the most part to funding previously allocated to local authorities as General Purpose Grants; LPT allocations replaced these grants from 2015 on. The Programme for Government 'Our Shared Future', commits to bringing about reforms in the workings of LPT. These reforms will involve bringing new homes, which are currently exempt from LPT, into the taxation system as well as providing for all money collected locally to be retained within the county. This will also be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer, as is currently the case. It is my intention that an examination of local authority funding baselines will be considered in this context this year. As regards evidence, the position as outlined has been consistently articulated, both by myself and Minister O'Brien, by previous office holders and by officials from my Department as part of their engagement with Oireachtas Committees.