Dáil Éireann Debate, Wednesday - 28 September 2022
8. Deputy Neasa Hourigan asked the Minister for Housing, Local Government and Heritage if he will provide an update on his engagements with Dublin City Council in relation to the pressure on its finances as a result of general inflation and higher energy costs; and if he will make a statement on the matter. [46884/22]
View answerI ask the Minister to provide an update on the Department's engagements with Dublin City Council regarding financial pressures as a consequence of inflation and higher energy costs.
I thank Deputy Hourigan for the question. My Department is cognisant of the current financial environment in which local authorities, including Dublin City Council, are operating, and the pressures facing them in respect of general inflation and higher energy costs in particular. These challenges are common across the sector - indeed, across the State - and I will set out how support from central government for local authorities in 2023 will increase in recognition of their financial challenges.
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 €60 million 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. Work is already under way in that regard.
For 2023, the Government is making a significant contribution of €333 million to support local authorities. A large portion of this amount - €199 million - will be to assist local authorities with the cumulative effect of pay costs arising from the national pay agreements and the unwinding of the financial emergency measures in the public interest legislation. This allocation will ensure that local authorities have the necessary people to perform their functions and to provide more than 1,000 essential public services to our citizens.
As has happened in previous years, we will engage with the Department of Public Expenditure and Reform regarding any additional pay increases that are confirmed for 2023. Across all schemes and funding sources, my Department has provided €737 million in 2020, €724 million in 2021 and over €305 million to the end of August 2022 to Dublin City Council. Included in this is an unprecedented level of support provided by central government to local authorities during the Covid-19 pandemic.
I thank the Minister of State. Dublin City Council is facing particular budgetary difficulties due to general inflation, higher energy costs and, as the Minister of State said, the public sector pay increases, which increase the pressure. I welcome the details the Minister of State provided about the funding allocation. Dublin City Council has particular pressures relating to homelessness and the provision of related services. As we move towards that decision-making process for Dublin City Council in the next couple of weeks, it is important that the councillors who are making decisions on budgets are aware in more detail of what assistance they might expect from the Department as they head into negotiations with various parties in the coming months.
We are working hard to support local authorities for 2023, which will be a difficult year. The Minister, Deputy Darragh O'Brien, has secured an unprecedented increase in housing for the homeless, with over €250 million, which will be a significant asset for Dublin City Council and other councils, protecting the most vulnerable. It is important for the State to do so. In the programme for Government, Our Shared Future, we have the move to 100% retention of the local property tax, which will take place in 2023. This will increase surpluses for authorities like Dublin City Council. Dublin City Council could potentially retain about €40.3 million of its local property tax for its own use in 2023. We are currently engaging with the sector about energy costs and other costs in response to the acute increase in inflation, at about 8%. I assure Deputy Hourigan that we are engaging solidly and we will support local authorities in any way we can, including Dublin City Council.
I thank the Minister of State. I welcome his acknowledgement of the councillors' ability to retain the local property tax. A decision on that is due on Monday. As we know, Dublin City Council, including the parties in this coalition and beyond, votes every year to decrease the rate by as much as 15% and actively impoverish Dublin City Council. I think it is unfair for councillors to have to make this decision without clear information about what central funding is available to them. We know that energy price inflation will cost the council €4.5 million. The cost of general inflation will be in the region of €6 million. Pay deal costs will be in the region of €13 million. I would appreciate if the Department could engage with the council on this matter and provide that information to councillors on the council, so that when they choose to cut the local property tax yet again, they know exactly what they are doing.
The Deputy is correct about the trajectory that Dublin City Council has taken. It has forgone almost €12.3 million by decreasing the local property tax. Timing is an issue for the Revenue Commissioners. It needs advance notice to inform citizens what the rate will be, hence the budgetary meeting has to be in September to adjudicate on the rate. I was in the Seanad earlier. We discussed a particular county which has increased its local property tax for the last three years and brought in significant income. It is now accessing huge capital funds from central Government because it has the priming finance to do so. I call on people to be responsible when looking at their budgetary processes. They should look at what they can gain. We have €165 billion to put into public infrastructure in the next decade. That funding is there to be accessed. Local authorities have to come up with their share of it. By increasing the local property tax, they can access significant capital funds, which will improve the lives of citizens and communities right across Dublin City Council's area, if it chooses to do so.
