Vol. 560 No. 3
111 Mr. Allen asked the Minister for the Environment and Local Government the way in which he proposes to support local authorities in order that they can deal with the serious financial shortfall that has arisen for them due to an inad equate allocation from his Department to fund ongoing services and also due to their obligations under the benchmarking proposals and the new national wage deal. [2519/03]
I assume the allocations referred to in the question are the general purpose grant allocations made from the local government fund.
I do not accept that these allocations are insufficient. It is a matter for each local authority to determine its own current expenditure levels for any year in the context of its annual budgetary process. All such expenditure, whether it be in relation to pay or otherwise, is funded from a variety of sources including specific State grants, commercial rates, fees and charges for services and general purpose grants from the local government fund.
The amount of funding made available to local authorities through the general purpose grants from the local government fund has grown to record levels over the past few years. I have allocated a total of €626 million for such grants in 2003. This amount represents an increase of 6.4% over the 2002 allocation and is some 85% higher than the corresponding allocation for 1997. I am confident that this level of funding, together with increases in income from local sources, is appropriate to meet the reasonable cost of local authority services in 2003.
Since its establishment, the local government fund has also been the primary source of funding for non-national roads and major improvements of this road network have been realised under this arrangement. In 2003, non-national road grants will amount to some €434 million, which represents an increase of over 92% on 1997.
The funding arrangements introduced through the local government fund in 1999 have therefore served local authorities reasonably well. However, with a view to further reform and improvement of the system, I intend to commission a major independent review of local government funding particularly to meet the challenges of local government into the future. I intend that this review will be broad ranging and will examine all practical options for financing local government.
In the meantime, I intend that allocations from the local government fund to local authorities will take into account both the costs facing authorities and the ability of authorities to meet such costs from local sources.
Will the Minister agree that some local authorities like Drogheda and Dundalk had their allocations reduced this year? Will he now do the decent thing and announce that Fianna Fáil has gone full circle and is effectively reintroducing rates on domestic dwellings? To quote from the Minister's own statements late last Thursday—
The Deputy cannot quote.
I will not quote but the Minister is effectively giving the go-ahead to local authorities to impose charges of up to €600 for refuse collection. He is giving the power to the managers under the new legislation being brought before the Seanad next week. He has signalled that there will be a €200 water charge on each household. He has forced local authorities into a position where they are now increasing rent on old age pensioners to the tune of approximately €9, long before they have even got the €10 increase on their social welfare benefits. Will the Minister now do the decent thing and declare that rates on domestic dwellings are being reintroduced? Will he also accept that many local authorities, because of the scale of increases they received this year, their obligations under benchmarking and other liabilities, will not be able to buy a shovel by August?
I do not accept what the Deputy says. I am aware from all the local authorities around the country, and I met a number of them recently, that they are very pleased with the allocations. Some months ago there was an expectation on the part of all Members of this House, or certainly on the part of the Opposition, and from commentators, that the funding available this year would be substantially below what was available last year. That has turned out not to be the case because an enormous effort was put in by myself and my colleagues to examine all the resources available to us and ensure that we maintained the record level of funding for the local government system. I did that because I understand, having served in the local authority structure, the demands on local authorities for the delivery of services throughout the local government system and I am deeply concerned about how all of this is to be maintained in the future.
Local government gets its funding from a range of sources and I am aware that the provision of waste management, water systems, water delivery to homes, etc. is becoming very expensive, and rightly so because the public have demanded higher standards, something to which I subscribe. Members should understand that the "polluter pays" principle is a legal requirement to which we agreed under EU directives and legislation introduced by different parties over the past number of years, and which includes householders who are responsible in the context of the disposal of their own waste. What I did in the committee, which I thought was a fair approach, was to impart the knowledge to the committee on the best assessment I had been given from local authority managers which is that the real costs of disposing of household waste is around €11 per week. That is an average figure. I am not saying everybody has to pay for this but we wanted to put into the public domain the fact that people are paying substantially less than the real costs and are being subsidised for that approach. That is not sustainable in legal terms either. There is no question of rates being reintroduced.
The six minutes allocated to this question have concluded.
Incidentally, the figure for water charges suggested by the Deputy did not come from me or my Department.
May I ask a supplementary question?
Sorry, Deputy, the six minutes has concluded.
I only used up about 30 seconds of that six minutes.
No, the Deputy took longer than that to ask his question.
