Under the current baseline funding allocation model, every local authority has a minimum level of non-programme funding available to it, known as its baseline. Baseline funding comes from Local Property Tax income (LPT) and is supplemented by the exchequer where a local authority’s LPT income is less than their baseline level.
There was a previous review of the baseline funding model in 2018, and a draft allocation model was agreed by a working group comprised of my Department and the local government sector. As the then Minister for Finance subsequently decided to defer the valuation date for LPT liabilities to November 2021, the finalisation of the baseline review process was also deferred until the impact of the revaluation process could be determined.
The revaluation of Local Property Tax has now taken place and data from the Census 2022 is now available. In light of these developments, the review of the baselines has resumed, and a working group comprising my Department, the local government sector, including Elected Members, and the Department of Public Expenditure, NDP Delivery and Reform has been established for this purpose. The objective of this Review is to recommend a set of key indicators which may be used to allocate available funding to local authorities in a fair, equitable and transparent manner.
It is intended to conclude the work of this group by the end of May 2023, and that recommendations of the group will be brought to me shortly thereafter. While I expect that there will be a new baseline allocation model in place in time for the Local Property Tax allocations for 2024, it should also be noted that any proposed changes to the baselines will need to be considered within the parameters of the national fiscal and budgetary situation at this time.
