I think this Bill will, indeed, be acceptable to the House. A measure such as this, which enables the capital works of local authorities to go ahead unhindered, is certainly one for which there must be approval and to which, I am quite certain, no hindrance will be offered in its passage through the Seanad. Nevertheless, the occasion of its passage does give an opportunity to Members to speak of the operations of the Local Loans Fund and of the relation of the operation of the Fund to general capital expenditure.
The Minister indicated that in the present year the Capital Budget has provided for an issue of over £30 million from the Local Loans Fund and it is quite clear, therefore, that the money which comes up from the Local Loans Fund is part of our Capital Budget. Just how closely is it integrated with our Capital Budget? We can see that the expenditure from the Local Loans Fund is part of the Capital Budget but this could mean very little more than this total of £30 million being part of the grand total which goes to make up the Capital Budget. In these days of programming—and I think that we want to move on from programming to planning—we want to see something more than merely the inclusion of this amount of money in the total which appears in the Capital Budget. If we are to operate properly in the sphere of capital expenditure where local authorities are concerned, we should, I think, have greater integration between the operations of local authorities in the capital field and general Government operations.
It is unfortunate that local authorities in dealing with their finances very often do not pay sufficient attention to the capital aspects of them. Indeed, until some years ago, this was true also on the national level. The annual Budget, until a few years ago, was concerned largely with current expenditure and it is only in recent times, due largely to the initiative of Deputy McGilligan when he was Minister for Finance, that the Capital Budget has been introduced as a separate calculation and as something in its own right. It is high time, I think, that local authorities followed the same line in making up the amounts they require from the Local Loans Fund in any given year; it is only right that they should look beyond that single year and that they should not merely treat capital requirements as something for one year only and something which is an appendage and less important than their current expenditure.
Many Members of this House are members of local authorities and they will probably agree with me when I say that my experience when I was for a number of years a member of a local authority was that the members of local authorities do not give to items of capital expenditure the importance which they deserve. What tends to happen in regard to the items of capital expenditure for which money will be available under this Bill is for the local authority to get a report with regard to these works from one of the local authority officials and not to look on this as something that is part of a long-term development. They see the amount involved. They see, of course, that what is proposed is something that should be done and then just ask the question: how much does this mean on the rates? Very often what happens is that because this is a capital work which is going to start only some time in the middle of the year and may not be completed, the answer they get is: "Oh, this will mean perhaps 4d on the rates but only a penny on the rates in next year but ultimately it will mean 4d on the rates".
I am afraid that very often members of local authorities do not seem to hear the 4d that is mentioned. They appear to hear only the penny that it will fall due next year and do not appear to realise what the ultimate commitment is. They certainly do not realise it at the moment but they do realise it when they come to make their estimates and find that all these four-pences have added up, and when they are faced with the county manager's estimate of what the rates should be, they are in the position of being told that they are 18/-, 20/-, loan charges to which they are already committed and it is a bill which must be met before they can even start thinking of the level of current services.
Both the Minister and I in our political youth were members of local authorities. When I was a member of a local authority—and this is a good many years ago—I advocated very strongly that local authorities would be well advised to hold a special meeting once a year to draw up a capital budget in the way in which the State now draws up a Capital Budget, that the local authority drawing on the money of the Local Loans Fund to spend on capital works in their own areas should do this as a definite plan, that the local authority, besides having an estimates meeting at which they have to include their standing loan charges in their current estimate, should have a capital budget meeting and a capital budget presented to it.
There is no need for this to be done at the same time of year as the local authority brings up its current estimate. It could be done at any time of the year. The important thing is that local authorities should take one particular occasion on which they will look at their own whole capital expenditure, look ahead at their capital needs and look ahead and plan, decide on the rate at which they feel in the next three to five years they would need to spend capital moneys and to plan accordingly. This would not only help the local authorities to realise what they are doing in regard to capital expenditure, to realise what commitments they will have, but it would help them to realise what moneys they will wish to draw from the Local Loans Fund not only in the immediate year, or the next financial year, but for a number of years ahead. This would have the advantage not only of allowing the local authority to see their own position more clearly but also of allowing the Department of Local Government and the Department of Finance to know, and to be able to plan ahead for, what the provisions should be.
I know that in recent years, in regard to the better planning of capital works, better provisions have been made. Indeed, some of the worst abuses of the administration of capital expenditure in local authorities have been removed. Until a few years ago local authorities, in regard to road works, for example, were working completely within the straitjacket of a single financial year. The position was that a road works programme would be drawn up and if the money was not expended coming towards the end of the financial year in which it was necessary to spend the money on these works, it had to be spent; otherwise, the money would be lost to the local authority. This meant in regard to road works that works which could be more effectively and more efficiently carried out during the summer months had to be done during the months of February and March— an extremely bad time of year for the carrying out of such works. I know that arrangements have been made in recent years to avoid this sort of ridiculous situation in regard to both grants and capital works but we can go a great deal further in the same direction.
If our capital planning, our economic planning, is to mean anything, it must be not only something which is done at the top, not only something which is done at the level of the Minister's Department, but something which diffuses down through the community. I think we are all agreed that it is the integration of the decision-makers at lower level with those ultimately responsible for programming and planning that gives the greatest hope of programming and planning becoming a national effort; that the greatest hope of real success is in this approach to our economic problems. In this regard the first attempts at really close integration of the lower level decision-makers can be made in the areas of the semi-State bodies and the local authorities, and it is in regard to moneys such as the money which we are authorising under this Bill that we could not only improve our approach to this question of the expenditure of capital moneys but, indeed, experiment in the diffusion of planning from the top to those who are concerned not with the whole of the plan but with particular important parts of it.
This is something which I would urge the Minister to consider in conjunction with his colleague, the Minister for Local Government. Here is a case where not only could the local authorities be encouraged to do a better job for themselves in the control of their capital expenditure and in the realisation of what capital expenditure means but, also, could be integrated into the process because, unfortunately, we find at the moment that the local authorities so often look on the central Government as something quite apart from themselves. They look on the Departments of Local Government and Finance not as colleagues but almost as unsympathetic rivals, with whom they must deal. So much for that aspect of the planning of expenditure of amounts from the Local Loans Fund.
There is another point in regard to the administration of the Local Loans Fund with which I should like to deal. Again, I am talking of something in respect of which those features I want to complain have been modified somewhat in recent years but unfortunately not to anything like the extent which I should wish to see. In regard to capital works, there are very substantial grants from the Central Fund in most cases. Naturally the Departments of Finance and Local Government, having made substantial grants, are extremely anxious to see that the moneys are well spent.
In doing so, however, I am afraid there is a tendency for them sometimes to treat local authorities, their managers and local officials, as small children. There has been a tendency in the past which, as I have said, has been modified but which is still there, to have schemes, prepared by perfectly competent people working in local authorities, schemes for capital works, reviewed not merely in their general aspect but in minute detail by corresponding officials of central Government Departments.
It is easy to realise the anxiety of central Government Departments that the money to which they have contributed should be well spent, but it should not be beyond the ingenuity of the Ministers concerned and their advisers to work out a scheme of co-operation in which there could be a division of functions between those professionally concerned at local authority level in the expenditure of these moneys and those professionally concerned to see that the central Government grants are being wisely used. We should not be content with removing just the worst aspects of this situation which have occurred in the past: we should look for a system whereby the local authorities will be allowed to know that the central Government have confidence in them, confidence in their professional officers, and that the professional officers in the Department of State are not there as checkers of what has been done— to check down every item—but as advisers to help them, to keep them in touch with what is being done not only in other parts of the country where successful innovations have occurred but also with what is happening outside the country.
The role of adviser here could be substantially increased as the role of the professional officer of the central Government Department. I do not wish to labour these points but I suggest they are matters which the Minister might well consider, in conjunction with the Minister for Local Government. The whole operations of the local authorities could be improved, the whole atmosphere existing between local authorities and the central Government could be made more healthy, if we endeavoured at all times to promote real co-operation between equals in many of the operations in which local authorities are acting on matters which are also of concern to the central Government.
In particular, I emphasise two points. One is an arrangement whereby the local authorities would do their own capital budgeting, would look forward much more than has been done in the past few years in regard to certain individual services—that they would look forward in regard to individual services and then in regard to all of them together. This is a very important thing. A great deal of expenditure in recent times is on housing and the housing industry is one which is rather subject to fluctuations. The housing industry, indeed, has its own trade cycle, its own business cycle, which is independent of general trade cycles. Therefore, unless we are careful in planning ahead, these fluctuations can become quite violent. It is to avoid this sort of effect that planning is necessary. Mere planning at the level of the central Government on the extent of the capital expenditure on various items in various years is not enough and something more should be done in this respect.
The second point is that though there has been an improvement in recent years in regard to the relationship between the professional officers of the central Government and those of the local authorities, a good deal more could be done to plan the roles of these two groups so that in the future we could have a real partnership. If these things could be done, then indeed the Government and the whole country would get better value for the money we authorise in this Bill. On the other hand, if these things are allowed to go along in the way they are going at the moment, with merely minor improvements from time to time, we will not reach the level of efficiency we all wish to see.
