Dáil Éireann díospóireacht -
Wednesday, 9 Jun 1982

Vol. 335 No. 6

Ceisteanna—Questions. Oral Answers. - Financing of Local Authorities.

2.

Mr. Molony

asked the Minister for the Environment if he recognises the fact that the existing system of financing local authorities militates seriously against some authorities who either had a very low rate in the £ in 1977 and/or do not enjoy the same level of development of houses, factories and so on as other areas and are thus deprived of the financial buoyancy available to areas being developed more quickly; if so, the steps he proposed to take to avoid this discrimination between local authorities; and if he will make a statement on the matter.

3.

Mr. Molony

asked the Minister for the Environment if he intends to review the present means of financing local authorities; if so, what those plans are; and, if not, how he proposes to overcome the serious financial difficulties being faced by some local authorities.

4.

Mr. Naughten

asked the Minister for the Environment if he recognises that the present system of financing local authorities militates against those authorities which have a low level of development; and, if so, the steps he intends to take to eliminate this discrimination.

5.

Mr. Naughten

asked the Minister for the Environment if he intends to amend the 1978 legislation which removed the power from local authorities to set a rate they felt was essential to maintain the services within that county.

6.

Mr. Naughten

asked the Minister for the Environment if he intends to amend the legislation which was introduced in 1977 refunding to local authorities 100 per cent of the domestic rate.

Mr. Brady

(Dublin South-East): With the permission of the Ceann Comhairle, I propose to take Questions Nos. 2 to 6, inclusive, together.

I am satisfied that the existing system of financing local authorities maintains broad equity between different local authorities. The higher revenue buoyancy in areas of rapid development helps to finance the higher demand on local authority services in those areas.

The limitation on rate increases is necessary for two reasons. First it protects the remaining groups who continue to pay rates — for example, shopkeepers, occupiers of factory and other commercial premises and so on — from the danger of excessive rate increases and, secondly, it prevents an open-ended call on the Exchequer for finance. I am satisfied that the present system strikes a reasonable balance between the desire of local authorities to press ahead with their services on the one hand and, on the other, the need to manage the nation's finances prudently.

On the wider question of the finances of local authorities, I was concerned when I took office at the extent to which local authority services had been underfinanced. The recent budget provided for additional funds amounting to almost £73 million for local authority services and this will help to offset financial difficulties that might otherwise have arisen in the current year.

I am at present considering any legislation or other changes which may be appropriate in relation to other aspects of local authority finance.

Mr. J. Mitchell

Will the Minister accept that the country is in a mess because the Government have expended largesse of the kind he has indicated without saying where it will come from? Will the Minister indicate where the £73 million extra will come from and how much that will leave local authorities short of what they require to maintain present services?

Mr. Brady

(Dublin South-East): I do not accept the Deputy's view. I have eight years' experience of local government activities and if the Deputy wishes me to deal with a particular council, rather than the overall situation, I will do so. The questions before the House deal with uniform rating and the need for rate limits. I was asked earlier if the rate limit would be scrapped. I should like to tell Deputy Mitchell that the Minister will review this matter if more funds are necessary. I said that last week. The £73 million that is being provided — it was referred to in the budget speech of the Minister for Finance — will go a long way towards relieving any pressure that is on local authorities at present. That is the factual situation as it prevails.

Mr. Molony

On a point of order, I should like to protest once again at the reaction of the Minister of State to these questions by taking four of them together. They deal with two separate topics. At the risk of not being as political as some Members might like to be I should like to concentrate on the points I raised in Question No. 2. I should like to ask the Minister if he accepts that in counties where the rate in 1977 was low the subsequent increases granted to local authorities have been of less benefit to such areas than they have been to areas that had a relatively high rate in the pound in 1977? Does the Minister not accept that that is inherently guaranteeing discrimination in the system of local authority financing as exists at present? Does the Minister not accept that throughout the country there is uneven development in terms of the provision of factories, housing schemes and so on, and where there is more development in one area than in another the area with the high rate of development must therefore benefit from increased buoyancy in rates? For example, is the Minister aware that in North Tipperary County Council buoyancy last year would have amounted to something less than 1 per cent while in Dublin city it would have amounted to something in excess of 6 per cent? The system of financing local authorities through the rating system as exists at present is inherently discriminatory and is ensuring that areas that are badly off will get worse. Will the Minister consider reviewing the system to give some hope to agricultural counties that do not have the benefit of the type of development such as Dublin city or other cities might have?

Mr. Brady

(Dublin South-East): The Deputy covered a number of points in his questions. In 1977 the rate increase in Tipperary North Riding was 5.3 per cent while in Dublin County Council it was 5.5 per cent. The Deputy made that comparison.

Mr. Molony

I made the comparison about the buoyancy.

Mr. Brady

(Dublin South-East): I will develop that for the Deputy. The Deputy mentioned rapid development. It is implied in the questions that areas of rapid development do better under the uniform rate limits because of higher revenue buoyancy but that is not necessarily so. In areas of rapid development there is also a greater demand for the services provided by local authorities. For example, new houses have to be serviced with water, sewerage, roads, refuse collection, libraries, parks and so on. Factories and offices also create demands on services such as pollution control, heavier road usage, parking, traffic problems and so on. The higher revenue buoyancy in these areas helps to finance the higher demand for services. Nationally, the average valuation buoyancy is 3 per cent but this varies in individual cases from under 1 per cent to 10 or 11 per cent. I should like to tell the Deputy that in the last six weeks I have had an opportunity of meeting representatives from many local authorities and I learned that that is the case. A local authority must be taken with its individual merit. If the Deputy wishes to deal with Tipperary North Riding I can do so but the question as it is phrased is a general one.

Mr. Quinn

Would the Minister not agree that he has, perhaps mistakenly, misled the House by suggesting that current revenue derived from rates buoyancy is used to pay for capital expenditure such as libraries and roads? It is not true to say that the Minister was not giving a correct answer to the question posed by Deputy Molony and that the premise upon which the Fianna Fáil abolition of local autonomy in 1977 was based has come home to roost? I shall give the Minister one specific instance and I should like to know if that instance is typical of most local authorities. Does he agree that the Minister for the Environment met a deputation from County Leitrim recently who posed a problem in terms of a shortfall of cash for their local authority and that as a consequence additional funds in excess of what the rates would have provided were made available to that local authority?

Mr. Brady

(Dublin South-East): The Deputy suggests that I misled the House in the course of my reply but I must categorically deny that.

Mr. Quinn

Mistakenly.

Mr. Brady

(Dublin South-East): I have been at pains to give the maximum amount of information to Members. If the House agrees I will read out a lengthy report as to how local authorities have benefited by our policies. Deputies are aware of the action taken earlier this year by a Fianna Fáil Government.

Mr. Quinn

The point at issue is not the action of an individual government but the system of revenue derived by local authorities from the rating system. It is an inherent injustice. Will the Minister agree that items such as libraries, sewerage and roads relate to capital expenditure and are not financed out of rates and that, as a consequence, he has misled the House?

Mr. Brady

(Dublin South-East): I disagree. The rate limit is necessary for the reasons I mentioned in the course of my reply.

Mr. Naughten

I was stunned to hear the Minister's statement. Will the Minister explain how the increase in revenue to counties with a vast growth population, many new houses, factories and industries, was up by as much as 8 per cent over and above the limit allowed, while in smaller counties experiencing a slower growth rate the increase was as low as 1 per cent above what was allowed by the Department? The Minister has told the House that that money is used for the development of new housing estates, the provision of water and sewerage, all capital works, and roadways, which we all assumed was the responsibility of the developer to provide. I put it to the Minister that the reality is that a number of counties with lower valuations, very little increase in population and very little development——

An Ceann Comhairle

Deputy, you cannot make a speech.

Mr. Naughten

What plans has the Minister of State to increase the incomes of those smaller counties? Does he envisage introducing an equalisation grant which would increase the revenue to those counties?

Mr. Brady

(Dublin South-East): The Deputy has asked quite a range of questions. As I said earlier, I disagree with the point of view he takes. I am sure he is aware that the previous Government have left local authorities short of funds under a number of headings.

(Interruptions.)

Mr. Brady

(Dublin South-East): I have listened for quite some time to Deputies——

Mr. Naughten

Would the Minister of State answer some questions?

Mr. Brady

(Dublin South-East): I have answered the Deputy's question entirely. I am now attempting to answer another question.

(Interruptions.)

An Ceann Comhairle

Please allow the Minister of State to reply.

Mr. Quinn

It is answers we want, not replies, with all due respect to the Minister of State.

Mr. Brady

(Dublin South-East): It is very difficult. Deputy Quinn seems unable to wait until his turn comes and when I am attempting to answer another question he keeps talking.

Mr. Quinn

I am waiting for the answer.

Mr. Brady

(Dublin South-East): It is difficult to answer to questions which come like this continuously.

Mr. J. Mitchell

If the Minister of State is not able for his job he should resign.

Mr. Brady

(Dublin South-East): The domestic rate grant of £138 million was £12 million short of what was necessary. The decision to divert the full proceeds of house sales to capital purposes would have deprived local authorities of almost £7 million for current service. While it was not possible to alter completely the budgetary strategy of the previous Government, the Government took a number of positive steps costing almost £73 million which will help local authority services.

(Interruptions.)

Mr. Brady

(Dublin South-East): Excuse me, I intend to finish. I was asked to give the information about where the £73 million was coming from. The sources are: limitation of statutory demands on local authorities in respect of supplementary welfare allowances, saving to local authorities £2.9 million; reversal of the previous Government's decision on the proceeds of house sales, an extra £7 million for local authorities' current account; a special allocation of £20 million to Dublin Corporation to supplement their non-capital resources; an extra £15.5 million for local authority housing, including £14 million for Dublin Corporation; an additional £10 million for road improvements; an extra £7.4 million for sanitary services excluding £0.4 million which does not go to local authorities; £2.5 million to enable Dublin Corporation to increase their workforce on the environment improvement scheme from 150 to 500; £1.5 million for revolving fund to enable local authorities to acquire, rehabilitate and sell currently rundown residential properties; £1 million to enable Dublin Corporation to install appropriate facilities in substandard dwellings with bathroom facilities; £200,000 to enable the corporation to purchase Shandon Park for general amenity purposes——

Mr. Deasy

A Cheann Comhairle——

Mr. Brady

(Dublin South-East): I was asked for information which I am giving.

Mr. Deasy

Could the Minister of State circulate it?

Mr. Brady

(Dublin South-East): I would be delighted to circulate it.

(Interruptions.)

An Ceann Comhairle

Deputy Sherlock. A few questions and few supplementaries have still to be answered. I am not ending it here.

Mr. Sherlock

Would the Minister of State agree that, having reversed the decision made by the Coalition — the decision being that the local authorities would have to surrender 100 per cent of the revenue they derived from the sale of local authority houses to the Exchequer — and having allowed the local authorities to retain their 40 per cent, it is now necessary for him to go further and to remove from local authorities the responsibility of raising revenue for the upkeep of courthouses, for health services and for agriculture over which the local authority have absolutely no control? Thirdly, would he also consider that now is the time for him to increase the subsidy to meet the massive loan charges which local authorities have to pay which in some instances are so high that they will exceed the amount provided for the carrying out of services?

Mr. Brady

(Dublin South-East): I do not share those views. The point about courthouses was raised at a recent deputation and I gave an assurance that that matter would be looked into. Regarding the other two parts of the question, the Deputy is aware that the Government give maximum consideration to any local authority who get in touch about a problem. In that way the Department of the Environment work on a day-to-day basis. In answer to the question, I am satisfied that the moneys that have been provided in the budget go a long way towards meeting the demands of local authorities, but I make no apology for saying that we find ourselves in difficult times and we must take a pragmatic look at moneys which are available and make the best of resources given to various local authorities. I am in disagreement with persons who hold the view that the present system is inadequate. In my experience I have found it operating very satisfactorily.

Mr. Deasy

Is the Minister of State aware that in January 1981 the present Taoiseach issued a statement to the effect that members of the farming community who were experiencing financial difficulties need not pay their rates? He gave us to believe that the local authorities would be reimbursed by central Government for the losses incurred as a result. Up to today not one penny has been paid to local authorities in lieu of those moneys which were not paid. Could the Minister of State tell us when that money will be paid, because it is causing serious difficulties for local authorities around the country many of whom are owed moneys in excess of £1 million.

An Ceann Comhairle

Deputy Deasy, you are not allowed to make a speech on it but we will have a reply to your question.

Mr. Deasy

When is that money to be paid?

Mr. Brady

(Dublin South-East): I cannot give the Deputy the information he requires.

Mr. Molony

Arising out of the Minister of State's reply to my first supplementary question about ten minutes ago, I understood him to say that the difference in buoyancy from local authority to local authority varied from under 1 per cent for local authorities in some areas to in excess of 10 per cent in other areas. Is the Minister of State satisfied that a variation of the order of 1,000 per cent is not discriminatory as between those local authorities? Secondly, does the Minister of State accept that in some local authority areas, for example, sanitary services such as sewerage disposal schemes or water supply schemes were provided prior to 1977 and as a result those local authorities had a higher rate in the £ than local authorities who carried out such work after 1977 and that within this whole system therefore this discrimination exists? In view of that, would the Minister of State agree to examine the system of financing new houses, because some local authorities are, without question, being seriously militated against?

Mr. Brady

(Dublin South-East): I have not heard a question being asked——

Mr. Molony

I asked——

Mr. Brady

(Dublin South-East): Let me finish. The Deputy alleged that there is discrimination. I disagree that there is discrimination. The Deputy tailed off by asking if we would review the entire situation.

Mr. Molony

Does the Minister of State accept that variations in buoyancy——

Mr. Brady

(Dublin South-East): The Deputy must let me finish. I am coming to the 1,000 per cent but I cannot accelerate my conversation to speak so rapidly that the Deputy will not even hear me.

Mr. Molony

We do not want your "sweet as pie" stuff.

An Ceann Comhairle

Although this seems to arouse much interest, we cannot have a debate on it.

Mr. Brady

(Dublin South-East): The Deputy is speaking about his own performance. I am trying to give the information to the House.

Mr. Molony

The Minister of State is wasting the time of the House.

Mr. Brady

(Dublin South-East): It is the Deputy who is wasting it.

(Interruptions.)

Mr. Spring

First, will the Minister accept that there is general dissatisfaction with the level of funding of local authorities? Secondly, as a result of this shortfall in the level of funding, will he accept that there has been a cutback in services provided by the local authorities? Taking these factors into account, if the Minister of State accepts them, would he agree that it is high time for the Department of the Environment to conduct a review into the funding of local authorities so that some level of services, or an adequate service which we are not getting at the moment can be provided?

Mr. Brady

(Dublin South-East): The Department are constantly watching the situation. If they feel that a review of the funding of local authorities is necessary that will be done, but not in the present situation.

Mr. J. Mitchell

I asked the Minister where the money was coming from. He gave a breakdown of the expenditure but he did not give the source of the revenue. What additional provision was made in the March budget to raise this money? Would the Minister not agree with Deputy Quinn's point that he misled the House, although it was almost certainly done inadvertently, by suggesting that revenue raised by rates was spent on capital projects? If this is what the Minister is saying, he is betraying a lack of knowledge of local authority funding.

Mr. Brady

(Dublin South-East): The Deputy is well aware that the finance comes from the Exchequer and his question is a matter for the Minister for Finance. I gave the breakdown because I felt it was necessary in the context of the question. I beg to differ with the Deputy's assertion that I inadvertently misled the House.

Mr. Naughten

I asked a supplementary question which the Minister has not as yet answered. I asked what steps the Minister intends to take in view of the discrimination between different local authorities and whether the Government would contemplate the introduction of an equalisation grant. Since local authorities are now receiving only 91 per cent of the domestic rate, a reduction of 9 per cent on last year, what steps does the Minister intend to take?

Mr. Barrett

(Dublin North-West): On a point of order, I am anxious to know how many supplementary questions may be asked on one question tabled in view of the fact——

An Ceann Comhairle

There is no specific rule on this.

Mr. Barrett

(Dublin North-West):——that only six questions have been answered so far today.

An Ceann Comhairle

They are questions of great interest to Members and a certain latitude must be allowed. I am calling Deputies Quinn and L'Estrange to ask a supplementary.

Mr. Quinn

I think the Minister wishes to reply first.

Mr. Brady

(Dublin South-East): I do not accept that there is discrimination between local authorities.

Mr. Naughten

It is obvious.

Mr. Quinn

Would the Minister state clearly whether he regards expenditure on roads, drainage and sewerage and public libraries as expenditure funded out of current account revenue or capital account revenue?

Mr. Brady

(Dublin South-East): That is a separate question and I would suggest that the Deputy——

Mr. Quinn

On a point of order, I said that the Minister was, perhaps, mistakenly misleading the House by suggesting that such expenditure was funded out of rates. I do not wish the Minister to be disorderly and I want to give him the opportunity to correct a mistake he may have made.

An Ceann Comhairle

That is not a point of order.

Mr. Quinn

Is this expenditure now regarded as current account expenditure rather than capital expenditure? Otherwise the Minister has misled the House, perhaps not mistakenly.

Mr. L'Estrange

Is the Minister aware that the system of financing local authorities bears no relation to the amount of money needed and has been only about half the rate of inflation over the past few years? Services are deteriorating and local authorities are now employing the smallest number of men since the foundation of the State. Was he aware when he made the charge that we were to blame in 1981 that it was the Fianna Fáil preelection budget of 1981 which left local authorities short of money? Is he aware that we had to provide an extra £1 million at the end of 1981 to pay for houses begun in 1980 for which funds should have been provided in the 1981 budget?

Mr. Molony

On a point of order, I tabled two questions and other Members have asked more questions than I have been allowed.

An Ceann Comhairle

The fact that you tabled two questions does not necessarily entitle you to any supplementaries. It is at the discretion of the Chair. I think the House will agree that I have allowed a lot of latitude on these questions and Deputies will forgive me if I go on to Question No. 7.

Mr. Naughten

On a point of order, I asked a question regarding domestic rates but I did not get an answer.

An Ceann Comhairle

That is not a point of order. The Chair is not responsible for the answering or non-answering of questions.

Mr. Naughten

I would hope——

An Ceann Comhairle

You can hope, Deputy, but I am hoping to go to Question No. 7.

Mr. Molony

On a point of order, in the interest of fair play a person who goes to the trouble of tabling a question should be entitled to ask at least as many supplementaries as Members who have not tabled any questions.

An Ceann Comhairle

I have tried to be fair to every Member and I will now try to be fair to Deputy Naughten who has tabled Question No. 7.

7.

Mr. Naughten

asked the Minister for the Environment if, in view of the shortfall of finance available to Roscommon County Council to maintain existing services and staff, he will provide the necessary money to do so.

Mr. Brady

(Dublin South-East): Since resuming office, I have taken certain decisions which will help the finances of Roscommon County Council. My decision to limit increases in statutory demands on Roscommon County Council in respect of arterial drainage and supplementary welfare allowances and my decision to allow 40 per cent of the proceeds of house sales to be used for revenue purposes will, together, make £93,206 available to Roscommon County Council which they would otherwise not have had. I have also made an additional allocation of £230,000 in respect of road works.

Mr. Naughten

In view of the drastic situation that exists in Roscommon, where up to 100 men have been let go from the county council and services are grinding to a halt, what steps does the Minister intend to take to provide the necessary finance for the county council, especially since the Government are providing only 91 per cent of the domestic rate to the council?

Mr. Brady

(Dublin South-East): Many local authorities find themselves in a tight liquidity situation. Regarding Roscommon County Council, other provisions in the recent budget involve additional resources for local authorities, namely, £7.8 million for sanitary services schemes, £1 million for fire services and £4.5 million for local authority housing other than in Dublin. It may be expected that some of these extra funds will be allocated to Roscommon County Council.

Mr. Naughten

By any standards we are talking about very small amounts of money.

An Ceann Comhairle

Deputies may not make speeches. Question No. 8.

8.

Mr. J. Bermingham

asked the Minister for the Environment if he is aware that the management of Kildare County Council has invited the unions to discuss the acute problems affecting employment in the county arising from the insufficiency of funds to maintain works which would provide employment at existing levels; and if it is his intention to take such measures as are necessary to maintain employment levels as promised.

Mr. Brady

(Dublin South-East): I understand that Kildare County Council have sufficient funds available to maintain their full work force in employment throughout 1982. The maintenance of some workers in employment will, however, depend on the co-operation of the workers and that of their trade union in facilitating movement to different work locations in the county. In this connection negotiations between the council and the trade union are continuing.