Dáil Éireann Debate, Wednesday - 28 September 2022
156. Deputy Brendan Smith asked the Minister for Housing, Local Government and Heritage if he will ensure allocations to local authorities for 2023 under the Local Government Fund will be increased to deal adequately with increasing costs across all services provided by councils; and if he will make a statement on the matter. [47562/22]
View answerMy Department is very cognisant of the current financial environment in which local authorities are operating, and the pressures facing them in respect of general inflation and higher energy costs in particular. My officials are in regular and ongoing contact with the sector on the issue of increased energy costs, and my Department recognises the serious impact of these financial challenges. In this regard, additional support of €60m has been secured to assist local authorities in meeting the increased costs across a wide range of services. In line with the public sector generally, local authorities will also need to seek to reduce their energy consumption and I know that work is already underway in that regard.
In addition to this package, the Government is making a significant contribution of €333 million in 2023 to support local authorities. A large portion of this figure (€199 million) will be towards assisting local authorities with the cumulative effect on pay costs arising from the National Pay Agreements and the unwinding of the Financial Emergency Measures in the Public Interest (FEMPI) legislation. This allocation will ensure that local authorities will have the necessary resources, in terms of people, to perform their functions and provide essential public services to our citizens; in excess of one thousand services in fact. Furthermore, as has happened in previous years, we will be engaging with the Department of Public Expenditure and Reform in respect of any additional pay increases that are confirmed for 2023.
Across all schemes and funding sources, my Department provided €3.98 billion in 2020, €4.07 billion in 2021 and over €2.03 billion so far in 2022 (as at end August) to all local authorities. Included in this is the unprecedented level of support provided by central Government to local authorities in 2020 and 2021 during the COVID -19 pandemic. A more targeted rates waiver scheme was in place for Q1 2022, and payments to local authorities in respect of this scheme will be an additional c €61m.
As committed to in the Programme for Government - Our Shared Future, the move to 100% retention of Local Property Tax (LPT) will take place in 2023. All Equalisation funding will now be met by the Exchequer, to ensure that all authorities receive, at a minimum, an amount equivalent to their Baseline. This increased equalisation requirement will come to €118m in 2023. In addition, a move to this model will lead to an increased surplus for those authorities with LPT income above their funding baseline. These authorities shall now retain a greater proportion of that surplus for their own use in 2023; an increase from 20% of the overall yield this year to 22.5% next year. It is intended to commence a comprehensive review of the current LPT baselines in the coming months. This review could not commence in time for the 2023 LPT allocation process without reliable and up-to-date data primarily the detailed census data.
I am very aware of the funding pressures facing all local authorities and the provision of additional support of €60m is in recognition of those pressures. My Department will continue to engage with the sector on the issue.
