Seanad Éireann díospóireacht -
Thursday, 30 Jun 1983

Vol. 101 No. 4

Local Government (Financial Provisions) (No. 2) Bill, 1983: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of the Environment (Mr. Quinn)

Having reasonable means of raising revenue is essential to a healthy system of local democratic government. The decision to abolish domestic rates in 1978 and the consequential decisions have had in my view detrimental effects on both the health and the financial stability of the local government system. The time has come to redress this situation and to restore to local authorities a measure of financial independence.

The Local Government (Financial Provisions) Act, 1978 provided in effect for the abolition of domestic rates and for recoupment by the Minister to the local authorities of the relevant allowances made by them in respect of such rates. The Act conferred power on the Minister to place limits on the amounts by which local rate poundages would be permitted to rise: It also provided for estimates adopted by councils to be reduced if the rate determined was in excess of the prescribed limit.

Under this legal and financial regime, the estimates meetings of local authorities, which used to be the major decision-making occasions, lost much of their meaning and vitality and became deeply constrained by decisions taken at central government level. I believe that the control on rate poundages, more than any other form of central control on local authorities, has had a particularly depressing effect on the outlook and operation of the local government system. Indeed if anybody looks at the account figures for any local authority throughout the country over the last three to four years he will see just how effective that last sentence is.

If rate controls had the effect of improving local finances, there might be something to be said for them. In fact, the opposite has been the case. Coming into 1978, local authorities collectively enjoyed a credit balance on their revenue accounts of £5.8 million. By the end of 1982, this had become a debit balance of £43 million. The main reason for the deterioration is the fact that, since 1978, rate poundage limits have been consistently lower than the growth in prices generally. Let me illustrate this. Over the period from 1978 to 1982, the cumulative increase in rate poundages was 73 per cent whereas in the same period, the consumer price index rose by 102 per cent. There was, therefore, a drop of 29 per cent in real terms in rate poundages over the five year period. While I can understand that the prime objective behind the imposition of rate poundage limits was to protect the Exchequer, I believe that this objective could have been achieved by means which were more in tune with the need to protect and foster an effective system of local democracy.

I do not claim that this Government has easy or complete solutions to the problems I have just described. I am confident however that the general approach we are adopting to the question of local finance is the correct one and, given time, will restore much of the vitality to our local government system.

One of the first measures the Government adopted was to increase the rate support grants by £31.5 million in the budget for this year. This was necessary to relieve a crisis situation in the current finances of local authorities and to protect services and employment. The next step was to restore freedom to local councils to decide for themselves on the local rate in the £ without dictation from central Government. The third step was to increase the range of income sources available to local councils by opening new opportunities to them to charge for the services they provide.

I do not want to give the impression that the removal of central limits on local rate levels means that the Exchequer can, or will, underwrite unlimited rate increases through the rate support grants. This could never be possible. Local authorities are now responsible for a vast amount of public spending and cannot be isolated in any way from the need, under current economic conditions to take full account, in their demands and in their expenditures, of the realities of the times; to practise all possible means of achieving savings and to ensure the most effective possible use of their resources.

In future the rate support grants will be determined on a basis which will take account of the local authority needs as well as of the practical limitations on the amount of resources which can be made available for the purpose from central funds. These grants will be settled as part of the overall apportionment of national finances instead of by arbitrary limitation on local rate increases. This is the approach which has been followed in the current year and the approach proposed for the future, as provided for in section 9 of the Bill.

The central purpose of the Bill is to extend the powers of local authorities to supplement their incomes from local charges. They will now have a general discretionary power to charge for the services which they provide, where they lack such a power at present. Restrictions on charges specified in existing enactments will be removed. Provision is also made for the removal of the existing prohibition on charges for domestic water supplies in urban areas.

At the moment, there is a variety of provisions relating to charges and there are many anomalies. While, in general, local authorities have power to make charges, there are cases where there is no power in law to charge; there are cases where charges for particular services are specifically prohibited, and there are even a few cases where charges are specified in Acts of the Oireachtas. Domestic water users are liable to charge if they live in county areas but not if they live in towns. The Bill before us will have the effect of enabling these anomalies to be removed and will provide a consistent framework for local charges which is missing at present.

Under the terms of the Bill, the services for which charges will be made and the levels of charges will be left to the discretion of the local authorities. This is an important feature. As Senators know, standard charges have been prescribed for planning applications under the Local Government (Planning and Development) Act, 1982. Because of the nature of that particular service, it is necessary that the relevant charges should be standardised for all areas. There is no good reason, however, why charges introduced under this Bill should be fixed centrally. It is desirable that the local authorities should have a discretion so that account can be taken of what is needed, and what is considered to be fair and reasonable and of the best means of applying the powers in local circumstances.

The meaning of the word "service" for the purposes of this Bill is defined in section 1. This definition has been framed so as to cover the widest possible range of the services which are provided and to give local authorities power to charge for any of these services. The range of services is, however, confined to those provided on a individual basis, or, in the words of the Bill, "to any person or in respect of any premises". This means that services, such as street lighting or road sweeping, which are provided on a general or community wide basis, are outside the scope of the Bill.

Section 2 provides that any existing enactment which requires or enables a local authority to provide a service, but which does not contain a power to charge for the service, shall be deemed to empower the authority to so charge. This power to charge will apply even where the existing enactment does not allow for charges being made. Under this section, statutory restrictions on the level of charges will be removed. The effect of these provisions will be to supersede all the provisions which currently restrict local authorities from charging for services and from charging realistic amounts.

I know that local authorities will welcome the additional powers which they will have under section 2 to make realistic charges. I know, too, that they will welcome the discretion which they will have under section 3 to determine different rates of charge in respect of different classes of consumers or of services. This will enable account to be taken of such criteria as rateable valuation, type of premises, quality or frequency of service and so on and, when taken with the provision for payments by instalment in section 6, will be cases of persons who will not be able, because of their circumstances, to pay charges, even with the provisions for instalments. To cater for these cases, section 5 provides for waiver of charges on grounds of personal hardship. The Bill does not attempt to define those grounds or to restrict the exercise of this power because this is an area where the decisions must be made on the basis of local knowledge and experience. It is, however, desirable that there should be a reasonable consistency around the country as regards the approach to the granting of waivers and the eligible categories. I propose to issue guidelines to the local authorities to assist them in exercising the discretion which they will have in this matter under section 5. I am confident that the local authorities will approach the question of waivers in a considerate spirit and will deal sympathetically with all cases of genuine hardship.

Senators will note that the question of water charges is dealt with separately in section 8. The existing law provides for the making of charges for water except for water supplied for domestic purposes by urban sanitary authorities. It also contains provisions relating to the administration of these charges. With the abolition of domestic rates, the justification for the separate treatment of urban areas has disappeared. Indeed this situation is now unjust as well as anomalous. It means that those in urban areas have enjoyed a greater benefit from the domestic rate grant than those in county areas. It also means, for example, that corporation or urban council tenants' houses in a county area are paying the county council a substantial water charge in many cases while the corporation or urban council itself has no entitlement to such revenue from any householders in their own areas. It also means that those people who live in towns but are actually outside the administrative boundaries of the towns — a large proportion of towns people are in this situation; approximately 30 per cent of the nation's urban population are in this category — find that they are liable to charge while their neighbours within the municipal boundary are exempt. It has been decided, therefore, to extend the existing law to cover all water charges. We are also availing of this opportunity to provide for payment of water charges by instalment and for waiver of these charges, as well, on hardship grounds.

Section 8 of the Bill removes certain restrictions on the level of charges specified in existing enactments or agreements. This is necessary to overcome a situation by which Dublin Corporation are required under old laws and agreements to provide water to consumers in certain districts outside their administrative area at charges which bear no relationship to today's values. There is no justification for continuing this situation, hence the provisions in section 8.

Section 9 lays down a new basis for the domestic rate support grant, which I have already explained. It makes the necessary changes in the Local Government (Financial Provisions) Act, 1978, including provision covering the arrangements for the current year and the situation which arose in 1982 when the amount of the rate reliefs allowed by the local authorities was not fully recouped to them as envisaged in the 1978 Act.

It has, of course, been suggested in some quarters that what we are really about is the reintroduction of rates. I want to make it quite clear that this is not the intention and will not be the effect of this Bill. What we are really doing is updating, extending, and adapting to modern circumstances, the legal basis for direct charges for services which is an established feature of local finance and which, over the years, has existed side by side with the rating system.

Another issue which has been raised relates to the division of responsibilities under the Bill as between the elected councils and the managers. Under the Bill the responsibility for determining the amount to be raised by way of charges will rest in the normal process with the elected members in the context of the preparation and adoption of the estimates, while the responsibility for making the charges and collecting them rests with the manager. This is the logical arrangement with the elected members having the fundamental policy role and responsibility for establishing the level and the amount that has to be raised and the manager executing that policy with all its detail. It is also the established system and has worked well for many years. It applies, for example, to the fixing of water charges under existing legislation.

In practice, of course, elected members and managers generally work closely together in regard to matters such as this, and I expect that this co-operation will apply to implementation of this Bill as well. However, if councils want to take a stronger hand they can do this under existing law. They may, for example, appoint their own estimates committee if they did not already have one and determine what goes into it from the beginning. The council members also have power to require the manager to inform them in advance of the manner in which he proposes to perform an executive function and the manager must comply with such a requisition. It is clear, therefore, that the elected members have adequate powers to set the framework for charges as well as means of keeping themselves fully informed in advance and of bringing their views to bear as regards the implementation measures.

It was in this context that the decision was made to continue the existing division of functions within the local authority in the implementation of this Bill. I am satisfied that this is the right approach, particularly since the powers to charge under this Bill are an extension of existing powers rather than an entirely new departure. In deference, however, to the concerns that have been expressed I have undertaken to review the practical operation of the arrangements in two years time.

Should the review show that the arrangements referred to earlier on and, in particular, the relationship between the elected members and the manager are not working satisfactorily in this area of the division of responsibilities, and that councils have genuine grounds for complaint, then the Minister for the Environment has ample powers to deal with that situation. They include power to add appropriate functions under the Bill to the list of functions which are reserved to the elected councils.

I must stress that I do not see any reason why there should be difficulties in this area now any more than previously and I will be very surprised if significant difficulties do emerge. But on behalf of the Government I have given the undertaking to re-examine the position when the Bill has been in operation for a reasonable time, and I will abide by that.

I see this Bill as an important step in working towards a better system of financing for local authorities. It is only a step and more remains to be done. As the Minister for the Environment has already explained he is arranging for a special examination to be undertaken in the Department of the question of the future financing of local authorities for the medium and long terms. This examination will take account of the need for adequacy of funds for the various local programmes, the need for a significant degree of local financial independence and discretion, and the need to limit the demands on central funds for local services.

In a sense, then, this Bill is of an interim nature but it is, I believe, a valuable contribution in its own right towards increasing the discretion available to local authorities and widening the options available to them, in the financial area. I would like to think therefore that the Bill will have the full support of the House.

I commend the Bill to the House.

Mr. Smith

All too seldom this House has the opportunity of discussing proposals, measures or indeed a Bill, which seeks to transfer powers from central Government to local government. For that reason I would like to be in a position to give unqualified support to the Second Reading of the Local Government (Financial Provisions) (No. 2) Bill. For many years here and in the other House I have sought to represent a point of view that we have continued to clutter up and to make less palatable for the public developments in central Government and have had too little confidence in what is possible for local councils and regional committees to do for themselves.

Traditionally in this country we have had, I suppose, a unique, in comparative terms with many European countries, dependence on the State. It developed through our history. For every problem that there is in any particular area the immediate reaction is what will the State do, will the State intervene or can the Exchequer afford to finance this or that project? For that reason, and because I would like to see a breakdown in that general historical attitude that resides in the country, which kills initiative and which tends to centralise so much of what we do in this small country, I am very anxious to assist in and to improve any proposals which will strengthen the local authority system.

For a number of years past anybody who is a member of a local authority will be all too acutely aware of the financial difficulties which have followed and the many services that have had to be curtailed because of lack of finance. I still feel it scarcely honest that we tend to have in every debate of this kind a reference back to 1977 and the derating of domestic dwellings. I do not want to go into the pros and cons of that. Most Members of the House would accept that the process of derating of domestic dwellings started before 1977.

There are compelling reasons why any person in Government would want to look at that system because of the inequities that were in it. Since that time, it should be recognised by members of the Government that we have had a High Court decision in relation to the same system as it operates on land. As we have often said here we have to have a lot in common in how we approach these problems but I do not think we are serving the national interest by trying to score political points on developments which took place arising from the derating of domestic dwellings in 1977 and in regard to more recent judicial decisions in the same area.

Criticism has been levelled at previous administrations because of the pegging of the poundage and the effect this had on local authorities. As a member of a local authority I accept that pegging the poundage in effect means that local authorities were unable to increase the rate in their areas beyond a certain percentage. Usually that percentage was some percentage points below the average inflation rate for that year. This meant there was a net fall in their income in this regard. At the same time, cognisance has to be taken of the fact that there is a very diminishing group of people now paying rates. While reference is very often made to commercial property in what we understand as the main business line, there are very many small shopkeepers and people who are still in the commercial line liable for rates. To give to local authorities, since that was the only area where they had the power to raise funds, an absolutely open situation could in some instances have led to excessive demands on this group of people. Most of us would like to represent, in a general sense, the view that that would not have been an ideal solution either.

One other problem that arose from that particular situation, section 9 in the Financial Provisions Bill, 1978, was that there is no national formula for deciding what really is the right amount that the State should provide to each local authority. In many local authorities you have more buoyancy, more houses being built, more developments and you can tend to get inequities. While I differ from the Minister in the sense that he is now not prepared to sustain Exchequer finance to local authorities in the way that it has been done, I, to a degree, welcome the flexibility which is tending to be brought in here in relation to the provision for local authorities which will take into account the regional imbalances, the county imbalances and the county difficulties which can vary. If you were fortunate enough to have a progressive council and county manager — let us face it that was not the position all over the whole country — you tended to get a variety of positions, which now need to be looked at. If I were satisfied that the Government were prepared to give the maximum possible support in financial terms to our local authorities I would give greater support to that whole notion.

There is ample evidence around to indicate that, perhaps, hidden in these proposals is an underlying implication that more progressively the State will try to opt out of financing local authorities. I feel that one of the reasons why this may be the position — I would like to be corrected on it — is the fact that the county manager seems, to me at least, to be getting the reins of power back into his hands to a degree which I do not think will be helpful.

I will not be parochial on this matter but I do want to re-emphasise something. A letter was sent to the Minister in relation to the obligation of the Minister under the Local Government (Financial Provisions) Act, 1978 not being fulfilled. As far as our county council was concerned — the position varies throughout the whole country — the fact that we were not recouped — as the law stands the Minister's Department are legally responsible to recoup local authorities for the losses incurred by derating — has meant that our local authority were short almost £½ million. This is at a time when so many of our services are in need of revamping, in particular the road services.

Failure to provide the local authorities with this very necessary fund at this time is a reneging on the Government's legal responsibility and indeed duty in this regard. How can we expect ordinary citizens to uphold the law if we ourselves in government ignore our responsibilities? With one stroke of the pen in this Bill the Minister is now providing for a situation where it will be no longer necessary for the Government to recoup the losses to local authorities arising from the abolition of rates. Where an ordinary citizen is unable to make good his legal obligations, would it not be very strange if he were in a position to write off these obligations? In effect that is what the State is doing here. Most of us want to see more local autonomy. We want to see the local communities in a position in all responsibility to raise more finance locally. I am sure the Minister of State, from what he has said in other places, has an enlightened view on this matter. He must recognise that we are not talking about local authorities that are at the moment capable of providing even a reasonable service in many regards and that, therefore, this Bill in many ways should be affording local authorities an opportunity to top up on Exchequer finance rather than to replace it.

I do not have to emphasise to him that we have an almost intolerable situation developing with regard to our road network. One has only to drive to the country areas to recognise that we are facing a problem which is going to be of immense proportions in a few years. Most of our road network was never developed for the vehicular traffic and the axle weight it has to carry today. This is the one area I want to emphasise where there are grave deficiencies in how we are coping with the problem. I am not saying that it is not possible to have a look at this and see to what extent private finance might be used and I know that this has already been provided for here in the city. However, we must do something about the matter immediately; otherwise we will be faced with colossal bills which we will be unable to pay. The fundamental flaw is that we are replacing existing funding from the State by transferring it to the local community. It seems to me that the answer that the Exchequer cannot bear it is scarcely good enough.

We cannot talk on this side of the House as if there was a pot of gold or that there was some way that any particular government could raise funds and ignore the general economic reality, but there are areas where we seem to be able to provide finance, where we have not the same degree of control. Any finance that the Exchequer provides for local authorities, the accounting system and the way it is spent is very much open to the view of the public. It is very much open to criticism and it is possible to see where economies can be made.

There are funds provided by the State at the end of each year to different organisations. One would imagine that a blank cheque can be given without taking account of the real need and without adequate discussion to ensure that we are spending this money properly and in the areas where it is most needed for the development of the country and of our industries, agriculture and tourism. For all of the main economic arms of the State the local authority is a vital organ because it provides the infrastructure which is so desperately needed at this time. In this and in other countries where there is high unemployment, emphasis should be placed on developing our infrastructure so that when the economy lifts and when the world situation improves we will be in a better position to take advantage of that fact. We need that more than most other areas because of the number of young people who are unemployed in our country. I was very saddened to read recently of a report that was commissioned in the UK on the effect of unemployment on young people and the conclusion that when a young person is unemployed for three years he is tending to move towards the point of being unemployable. It is a frightening prospect for this country, a frightening prospect for so many people. We need to explore every possibility to seek ways of finding resources to enable them to use their talents.

As we are trying to replace some of the Exchequer funding by transferring discretionary powers to local authorities to raise funds for these services I suggest that greater emphasis be laid on the infrastructural needs particularly the road network. If we do not do this, I shudder to think of the amount of money we are going to require or that somebody is going to have to put up in a few years from now to undo the damage we will continue to inflict on that network. If we do not try to sustain it much more significantly than we are tending to do at present the position will be very serious.

I come now to ask a few questions in relation to the services which are provided by local authorities where it is now intended to make a charge. Most of us welcome the development where we will have greater equity in the country as a whole as between city and county with regard to the provision of water charges. People tend to say that water is free but in many instances it costs local authorities very substantial amounts to make provision for water supplies in towns and rural areas. I do not think people will object too much to charges provided they are reasonable.

Reference was made in the other House to the question of the introduction of rates through the back door. I want to be absolutely sure we are talking about reasonable charges, and not charges of £20 this year rising to a few hundred pounds in a few years time. This system has its own in-built inequity. It does not take acount of usage and it does not take account of the variety of problems in different homes. How will it cater for situations where you have two and three families residing in one house? There is a lot of over-crowding in the country. Will county managers try to charge for these services on the basis of families or will it be the owner of the property only who will be charged? The Minister has agreed to look at this in two years time but it would be a far safer system if the local authority members had a say as far as these matters are concerned.

County managers can vary these charges depending on the demands on the council. If, for instance, the State, in the light of economic circumstances, gives less priority to local authority funding, managers will be forced to look at these charges in a far more aggressive way. If that were to be the outcome this Bill would be totally undermined. I would like an assurance from the Minister that in that situation we will have a reasonable scheme. We cannot talk about charging for services in isolation. We are reputed to be one of the highest taxed communities in the EEC and the public are already paying indirectly for many of these services. We are in a very difficult financial position and we are asking for some topping up on State financing which, in turn, is funded by the local community through PRSI, income tax, youth levies and so on. To move towards a position of an economic charge for these services is something I would resist. I would like an assurance from the Minister that we are not drifting towards this position and giving powers to the county managers which would enable them to view the prospect of discretionary charges as giving them power to move towards a totally economic charge.

I cannot agree with a charge for refuse collection. I recognise that it is an expensive system. It provides, particularly in the built-up areas, a very valuable and a very necessary service but it has many anomalies and it has tended to be extravagant. I do not know how any council would be in a position to charge for it. If there was to be a charge what would be the basis? Would it be the same for a hotel as for a domestic premises? Is an old age pensioner who would have very little refuse to be charged at the same rate as his neighbour who has much more refuse to be collected? Will four or five people living in the one area group together and put all the refuse outside one door? If the Minister is issuing guidelines to local authorities what are his proposals in this matter? The variety of situations between commercial and private, between small, poor people and others will be a problem. If people can opt out are they going to dump at night-time? Are they going to dump indiscriminately and are we going to have a much worse position because of this charge than we have at present? This area seems to me to pose an impossible quandary and I cannot see how any council can solve the problem. If the service is provided for an entire street, is everybody included? Can nobody opt out and if they opt out, on what basis? I would like the Minister to indicate when replying if he is serious about this proposal. Are councils serious about it or is it one which is impossible to operate equitably?

In providing these powers I recognise that the option is left to the local authority. If the Minister is going to charge for this service it may lead to much more dumping particularly in built-up areas and where there is less civic pride. There is not enough civic pride in the country but with the pressure for increased rents on houses, pressures for taxation and family problems people may resort to dumping their refuse. I do not know how the Minister will cope with this. It cannot be compared to the water situation because water on tap is like electricity. It is needed and if it is not there people are prepared to go a distance to get it. Dumping of refuse is a totally different matter. I would like some enlightenment as to how the Minister is proposing to deal with this matter.

I refer now to the scheme for the waiver of rates and I would ask the Minister when he is issuing guidelines, in the light of pressures on people, to be as generous as possible in the type of scheme that he intends to operate. It is not possible to open the door to all situations because it would undermine the necessity for having the scheme altogether but at the same time the Minister should take into account that in the last couple of years many people are under considerable financial stress and should be dealt with sympathetically.

Another matter which is not covered in the Bill but which has been referred to many times and which continually causes hassle at estimates meetings is the liability on local authorities to make provision for services which are totally unrelated to their jurisdiction. Sheep-dipping, vocational education committees, health boards and supplementary allowances have all been mentioned. Where a local authority have the right to elect members to another organisation which is perhaps providing services unrelated to the county council I do not see the reason for removing certain financial liabilities in this area such as vocational educational committees, ACOT services, sheep-dipping and supplementary welfare charges. I do not see the need here for local authorities to opt out to the same degree as I see in the case of arterial drainage and maintenance of courthouses.

I would welcome the change in relation to the provision for arterial drainage which means almost £60,000 to North Tipperary this year but it seems to me that it is not a realistic way to approach this particular problem. In many ways arterial drainage and the cost of maintenance is much greater than the actual value to the community as a whole. This is an historical charge but I think in the reorganisation and in the proposals regarding the financing of local government the transfer of this cost back to the Department of Finance and the Office of Public Works would be a very desirable development.

Because of their financial position local authorities have not been able to make adequate provision in the areas of sport, recreation and crafts. I would like the Minister to remember that an interest in our culture is more necessary in times of depression than in better times. Disadvantaged people should be given encouragement to gain an appreciation of our culture and they should be given the opportunity to participate in local projects. Very often local authorities can give assistance in matters like this but when funds are depleted these matters are overlooked and a future generation will have to do the job that we failed to do.

We are prepared to agree to allow these costs for services provided that they are topping up existing state expenditure to local authorities. To replace Exchequer funding with these provisions is to continue the diminution of the local authority system. What the majority of the people and Members of this House want to see is stronger local government, greater community involvement, greater community participation and greater initiative on the part of our authorities and our regions in deciding their own future, in deciding their own strength and in deciding the contribution that they can make to a more viable country, to a more viable county, to a more viable parish, and in that contribution to play their role in making this whole country a better place in which to live.

Mr. FitzGerald

I would also like to welcome this Bill. I hope that my contribution will be as balanced and interesting as has been the contribution of Senator Smith. The Bill we are dealing with has received considerable all-party support for quite some years. Opinions and views about this Bill have been coming in at various stages and at various times from all sides of the political divide. It is a reforming Bill relating to local government and like Senator Smith I hope this is just the first of a series of reforming Bills that will come before these Houses in the foreseeable future. I hope they will do something real to improve the present state of our local government services.

One of the problems we face in local government, and it has been the experience I am sure countrywide in recent years in relation to the framing of estimates, is the fact that Governments over the past few years at least have been coming to the question of the allocation of money to local authorities at a very late stage in the financial year. The ability of local authorities actually to get involved in the provision of services and in making an input into the estimates that the local authority have to implement have in recent years, and particularly the last two years, been left to a stage where there is no possibility whatsoever of their getting involved. Governments have been providing allocations to the local authorities at too late a stage for us to be able to influence the way in which our services should develop and to make that contribution which I think is essential not just for the well-being of counties and cities but in particular for the status of local government and for the involvement of members who, because of their local nature, should be able to contribute a great deal to the way those services are developed.

In my role as a member of the Dublin City Council for the past few years I have seen the council experience a period, probably no more than a month, from the moment in which Government have given an indication of their allocation, to the time in which the estimates are passed. That is a very unsatisfactory situation. It is very important that Government, in a period of more stabilised rule as we have now, would see to it that local authorities are given much more advanced information of the allocation they are going to get so that they can in their turn take the steps that the Minister mentioned this morning, of holding a meeting of an estimates committee, of determining what goes into that estimate and of proposing, with the co-operation of the executive of the city or county manager, the kind of development that they see right in the interest of the city or county.

This brings me to the question of the role on the city or county manager. As the Minister will know from his own experience, the role of that city or county manager is used in varied fashions throughout the country. In the city and county of Dublin the role of the city manager has been one of encouraging discussions with his members and trying to accept, as far as possible, the wishes of the members of the corporation. This is sadly not the case in a number of counties throughout the country where the manager puts himself at a distance from the members of his local authority — some of my colleagues will be speaking about this at a later stage in the debate — and does not allow for the kind of discussion and open local government that we would like to see developed.

It is very important that that kind of thing be stopped. We must try to reach a much greater consensus with the managers. The provision of these services is no different from the normal arrangement relating to the estimates. It is a question of the ability of the manager and the councils to understand and cooperate with each other and to try to develop the views that the elected members have been indicating for some time.

I am used to paying water rates as I happen to live outside the city of Dublin. The Minister may be interested in moving into the city in about two months from now. I purchased a house and the water rates incurred by me were .75 of a £. It illustrates as Senator Smith said, that in counties where there is buoyancy and development occurring in every possible sphere — roads, schools, shops, churches and house building — water rates should be pegged at a level of 75p. The authority who do not ask their residents to pay water rates are the water authority for the entire region. They provide water for the county and city. It is incredible that water rates are not charged to everybody in relation to services that are provided. It is important to realise that this is one of the reforming areas of the Bill.

The question of whether services are provided or not is an interesting point. It has been reported to me — and I should like the Minister to comment on this — from managers in more than one county that where there is an inability to provide service, where there is no water laid on to a particular farm or house, then there is no question of that service being provided. I should like that point to be clarified. It is an important point in that it does not seem to be equitable to charge a water rate for a service that the county or city have not got round to providing, although is may be intended to do so in the foreseeable future.

I noticed in the debate in the other House relating to this subject that the Minister for the Environment spoke on the question of buildings in multiple occupation. The Minister will know from his own experience that Dublin has a vast number of buildings in multiple occupation where the level of water going into those buildings is very sparing. Our attempts to get owners to do something about providing an adequate level of sanitary facilities have been extraordinarily inadequate and have let down the public to a very large degree. The extent to which public authority dwellings are provided with water is very great. There are still about 3,000 dwellings in the city that do not have a water supply in the way of toilet and bathroom facilities, but outside there are still larger numbers of people living in overcrowded buildings in multiple occupation where very often the only toilet is in a yard at the back of the house and where the absence of bathroom facilities is very noticeable. I noticed in the debate in relation to the problems of private buildings in multiple occupation that the Minister for the Environment spoke of the new service charge being collected from the landlord as was the practice apparently under the old rating system. I have the record of his speech in the House of that occasion.

My experience of the collection of rates, as we used to know them, was that the rating authority were not concerned whether it was the owner or the tenant who paid the rates: provided they were paid, their needs were satisfied. It is very important that in buildings which are deficient in relation to provision of water — I do not mean the provision of cooking facilities but where there is only one toilet and maybe six or eight families living in the house — where there is no bathroom we should make it adundantly clear to all rating authorities that where water rates are to be collected — I should like a comment from the Minister on this — that they would fall very clearly on the shoulders of the landlord and that he would be encouraged, in order to widen the scope in this area, to provide bathrooms and proper sanitary arrangements for the tenants in these buildings.

We could use this charge in a way that would be helpful to the owners and occupiers of these buildings and encourage a much better standard. This Bill brings a considerable new dimension into the area of local government and I noticed that the Minister spoke about the discretion that will be given to local government as it now exists. The limited amount of flexibility that members of local authorities have in relation to developing services has been a subject of concern for quite some years. There are many instances of this all over the country. I can think of buildings that could be developed into community centres in this city or of harbour developments in the country, or other areas of local development which could be undertaken under this Bill. I would like the Minister to outline how he sees this developing. It could possibly be considered as part and parcel of this enactment that a local authority might decide to top up the local service charge, not to a degree that would be harmful to the interests of people living in a particular county or city, but which would finance a new dimension, a new service, or new projects that would add greatly to the county or city involved.

That kind of undertaking by a local county council would add greatly to the importance of local government and we would begin to move back to the situation which Senator Smith was talking about earlier, a degree of power and respect for the local government system which has been absent for so long now. The shift of power from local government to central Government has had a very damaging effect for some years now. I know the Minister and the Minister of State are very committed to reforming local government. I hope that all parties in these Houses will be interested in pursuing, not just the advance of the White Paper or the advance of working parties, but the advance of real steps in relation to this area. We have the ridiculous position in Dublin city and county areas at present where the vast majority of houses being built by Dublin Corporation are being built in the county, where the service is so big and so unwieldy that it has lost the very character and nature of local government that is essential to its working. Many towns over a period of a few years have increased in population by 70 to 80 per cent. It is essential to recognise the new nature of these towns, to bring in a system of local government that is local in nature and that also plans for the development of services.

I have been involved in the last week or two in another place with a new committee relating to local government reform and it is hoped that this will have the approval of the Members of this House and people outside. It is also hoped it will not simply be a case of dividing up the services that are at present allocated to local government or a division of responsibilities between a local district council and a council at another level or to incorporating a new system for the new towns that are being built throughout the country. It will be a question of devolving powers in the full sense of local government, of not having the situation which now exists where every housing project and health centre have to receive the same technical approval at central level as it receives at local level. This problem has been affecting the minds and hearts of the people involved in local government for a considerable time. It does not only involve them in relation the local government service; it is also pertinent to the areas of health services and education. We must move from a position of over interference by central Government in local affairs and realise that there are plenty of reasons for having consultations and ways of one city or county learning from another. The central Government should look upon themselves as providing that role and not the role which it constantly provides of delaying and interfering with projects and having them put through a second stage of technical approval which is unnecessary and harmful to those who are engaged in the service and of the highest professional standing in the cities and counties.

The Bill will add briefly to the scope and improvement of the local government service. I hope that the Minister will outline in some detail how he hopes the scope over and above the present arrangements that exist in relation to the level of input by members can be increased in relation to the provision of new services such as community halls, youth development, harbour projects and others which will give the first important step in the public realisation that local government is here to survive and has been given a new lease of life. The extent to which the members of a local authority can have an input into these new areas of expansion could be incorporated into this area as a first step. This does not mean that every local authority would be conceiving numerous new projects as part of an increase in the service charge over a short period of time. If in every county, especially in the County Borough of Dublin, we were to think of two or three projects that would be outside the inner city fund and the scope of the normal local Government system, it would give a new lease of life to and a new realisation of the powers of local government and would be a very worthy step, but only the first in relation to the kind of reforms that the Minister would see fit to introduce in the course of his period in office. I hope that with the experience many of us have in this field we will see legislation reforming our local government system which will be far reaching and which this Government will be remembered for. We have reports and white papers dating back to 1970 or 1971 and it is now 1983. There is a tremendous consensus in these Houses that this area should be advanced.

Professor O'Donoghue

I should like to comment on one or two aspects relating to this Bill. There are two issues involved. One is the primary purpose of the Bill, namely the greater use of charges by the local authority, as a means of meeting at least part of the cost of the services they provide. Secondly, it touches on the wider question of the financial relationships between central and local Government.

Relating to the use of charges, I want to refer to the abolition of rates, not simply because the Minister mentioned it, but because it is also relevant to the way in which this question of greater use of charges arose, although logically, they are two quite separate issues. Senator FitzGerald referred to the White Paper on the reform of Local Government published in 1971. In the following year, the results of a discussion paper were published. This was the last of the reports that had looked at the reform of the rating system. It showed quite clearly that while there was a fair amount of tidying up which could be done there was not really a satisfactory alternative put forward. There was a rather brief reference to the fact that some more fundamental review might be necessary. Following on that, the first proposals to abolish rates on housing were put forward. It was made quite clear at the time and in various discussions subsequently and comments publicly that it was the intention that at least a significant part of the revenue that would be foregone by abolishing rates on housing would have to be met both by general increases in taxation and by the greater use of charges. In the years that followed especially in 1977, the outgoing Coalition Government had also committed themselves to the abolition of rates on housing so it should not be a matter for party political contention unless somebody wants to reopen the debate which took place at that time. The simplest way to deal with that argument is to ask would any Government propose to introduce the system as it then existed? We all know the answer to that. If one were to say who in their rational moments would introduce such a system why should we continue to pretend that we lament its loss? It was a good day's work to abolish rates on houses.

People seem to think that the abolition of rates on housing in some sense weakened local democracy or the responsibilities of local government and so on. That is not necessarily correct. A properly constructed reform of financial matters would strengthen the responsibility and the range of involvement in activity of local authorities and the greater use of charges is one step in that process of greater involvement. The easiest way to illustrate that point is to refer to the older system of having a kind of block type of revenue raising through rates on housing through local authorities. You were getting supports at various percentage rates from central Government for the various services which local authorities undertook. It meant you were getting the worst of both worlds, because no local authority were faced with having to meet the full cost of any service which they wanted to provide. It was usual that if they got one-third or one half the cost, the Government would put up the other two-thirds or half. You were making them an attractive offer in terms of the cost of the service. In many situations it was tempting to put the one-third on the ratepayers because they were considered to be a minority in the situation. I want to come back to that minority problem later.

How would you set about giving local authorities a greater sense of responsibility and involvement? Surely you would say to them that as far as possible they should try to meet the cost of their own services? We clearly do not want to have a whole series of local bodies trying to function like many governments. That is why so much of the revenue that is needed for local authorities is provided by central Government through some general form of financial support.

As far as possible changes should be related to the cost of the services involved. When the Minister talks about providing discretion to give waivers and also to take account of circumstances and so forth, he should tread very carefully because, with the best will in the world, you run the risk of creating a whole hotchpotch of fresh anomalies. If there is too much discretion different local authorities will take account of different local circumstances in deciding that people cannot really afford this or that. They will be setting up, in effect, a whole series of instruments for income redistribution. If the Minister thinks about it in that form I am sure he will appreciate the dangers that could arise.

The local authority, because of the relatively restricted area which they encompass, both geographically and in regard to the nature of the service they provide, should not get into the business of income redistribution in any significant way. That is a function which is better carried out by central Government. As far as possible charges should be related to the cost of providing the services. I touched earlier on the point that with the older system, as I say it, you had the worst of both worlds: you had subsidies and grants available from central Government towards the cost of various activities. They should be done away with as far as possible, so that when a local authority want to provide some additional activity they should be thinking in terms of having to find 100 per cent of the cost, either from their own charges or from a block grant which they will get from central Government.

This worst of both worlds combination encourages local authorities to spend more by offering them grants and subsidies and at the same time leaves them with a very restricted range of sources from which they can raise revenue on the actual detail of which services should be the subject of charges and the way in which those charges should be made. I do not wish to get into that today because it is far too detailed. Senator Smith raised some problem cases and Senator FitzGerald touched on one or two of the anomalies and there are practical problems of that kind to be faced. I would not, therefore, say that you should or should not charge for refuse collection, although I note it is done in many parts of the world. There are various ways of doing it. If you want to approximate to a system of charges that relates to the nature of the service, you can issue bins as they do in some townships on the Continent and the charge relates to the number of bins which you take. You relate charges to the household that puts out one bin once a week and the hotel which may put out ten bins for collection every day. In that way the biggest users have a greater frequency of collection as well as a greater number of containers. Refuse collection gives rise in the Irish context to some other problems such as the danger that people will try to opt out but frankly I do not think you can opt out. If you are going to have charges in the Irish context for refuse collection, it is a case of everybody being in and a question of how you want to relate the scale of charges.

Water charges have already been touched on. There is no need to develop that matter in any detail. Logically, if you are concerned about relating the charge to the usage of water, a meter should be supplied. I understand that there is no great cost and no great technical difficulty involved over a period. Charges are a growing source of importance but I am not suggesting that you rush out tomorrow and try to introduce metering. There is no reason why as part of some longer term programme they cannot be incorporated as one of the elements.

The general principle of introducing charges is one that I welcome and support since I advocated it more than ten years ago. I am delighted to see some progress being made in that direction. The business about the restriction on poundage was, of course, a purely interim measure until there was further reform such as the one we have before us in the present Bill. If you did not have some control of that nature you ran the risk to which I have already referred, of not having an effective way of curbing the understandable desires of authorities to make the best possible provision for their own areas. That brings me on to how you should tackle this long-term question of the financial relationships between central and local government. The Minister touched on that in the concluding pages of his script. Obviously there is no perfect solution to the problem and we are going to have headaches for quite a number of years to come. The basis for a solution should be that in addition to the local authorities having this discretion to charge for a range of services, the other basic source of revenue should be the central Government grant. The central Government grant should logically be based on two elements. It should contain the general revenue collection which has been done by the central Government for the local authorities. What do I mean by that? If you are saying that local authorities should be meeting 100 per cent of the cost of their services, you would ask how would they do that? Powers would have to be given to them to raise their own level of VAT or their own local income tax and so on. If you go back and look at some of those reports of the inter-departmental committee they made such suggestions. I regard them as crazy because you have only to sit back and ask these questions about Ireland. How large is it and how many people are in it? What is the geographical area? You could fit the population into a quarter of London and the geographical area you could fit comfortably into any of the areas or provinces of many European states and indeed, into a comer of some of the states in the United States.

So the idea of constructing an elaborate system of local taxation in pursuit of some misguided concept of local responsibility is a lot of hogwash. The much simpler approach is to say, "All right, you want local authorities to have some reasonable basis of finance for meeting the cost of the range of services which they incur". If you want to go the whole hog on this front there is no reason why you should not simply earmark the proceeds of some package of general tax revenues. You can say that the local authorities are entitled to 2 per cent VAT rate, 4p on the pint, 10 per cent of the income tax receipts or whatever. If you want to go at it that way then you can do it. You can actually earmark the notional entitlement of the local authorities to a certain share of the general tax receipts of central Government, but certainly, there is no point in having more than one tax-collecting mechanism in a country of this size. That is one element of it, whether you formally earmark it or whether, as the Minister puts it, in future the rate support grants will be determined on a basis which will take account of local authority needs as well as the practical limitations on the amount of resources which can be made available. That is a nice general formula. We are not going to have earmarking for some time to come but logically we can look at it down the road.

The second element — this is a point I want to stress because it comes back to the marker I was putting down about discretion in how to impose services — should be the concept of redistribution from central to local government, based on whatever formula or perceived set of circumstances are decided. In other words, if you are going to say that some parts of the country are poorer or that they have greater cost handicaps — perhaps a more difficult terrain in providing roads or water, and therefore they could not be expected to meet the costs from their own local sources — then you develop what we would call a key for a redistributive formula from central to local government that would be based on such characteristics as population. Have they a greater proportion of old people if services of that nature are to be provided or, a greater proportion of young children if we are looking at vocational education? Apart from the population characteristics you look at the physical keys, the land area, the road mileage and the difficulty of terrain. I would not suggest that anyone should spend 20 years agonising over a perfect formula. I suggest the Minister can get a fairly good approximation to this by a little bit of systematic work in his Department, if necessary supplemented by bodies like ESRI and An Foras Forbartha. If you look at it in those terms you can get an expenditure key that will give a basic redistributive formula, then it is a question of deciding how much money you can afford to give in any one year.

Why do I want to argue that? If you do it on that basis you now end up with an overall figure, let us say £1,000 million, which central Government is going to give to local authorities.

Mr. Quinn

Which is, by coincidence, about what local authorities spend each year.

Dr. O'Donoghue

Right, and I am thinking about a convenient round figure that is not too divorced from the realities of the present. You would now have a formula which would say "Here is the basis on which that £1,000 million will be distributed among the local authorities". Now you have given them a block amount of money and are saying, "You are getting £X million, you also have the power to levy charges for various services; now off you go".

The next and final step is the question of imposing some sort of controls, safeguards or supervision of activity. In the general formula what you need to do is simply to lay down minimum standards of service which they must provide in their mandatory activities. After that, for any authority who want to provide above the minimum, then that is their entitlement. That is why they start applying their own local responsibility, discretion, democracy, power and the rest of it. If they come back looking for more money, then you have to say that that is where their responsibility comes in and they will have to decide where they are going to find it because it would be unfair to give any more since the general formula for redistribution has already been settled. By emphasising that the redistributive element should be built into the amount of money transferred from central to local government I would then argue that local authorities themselves should not try to carry out redistributive functions except to a very limited extent within their own areas, otherwise all sorts of fresh anomalies will be built in. Of course there will be certain local problems. You cannot expect any general formula to be tailored to the circumstances of every individual, but I would suggest that a limit would be put on the amount which could be deployed in this redistributive way, whether by waiving charges to some low income families or providing services at reduced rates of charge for perhaps under-privileged groups and so forth. I would suggest that is the way to look at this basic question. In that context the role of charges becomes much clearer.

I want to touch on another aspect because there is a danger that it might be overlooked. Again, it is not easy to come up with a simple answer to it. After you have given a block grant and the power to supplement it with charges, you are not necessarily going to get the best provision of the local services unless you have some other way of looking at the geographical provision of services from time to time.

Let me give one example. We are familiar with the problems of providing such services as water to the scattered rural communities. I recall looking at some of these studies at one stage. One which struck me very forcibly was a study done — not in this country — for a remote rural area. Having looked at various ways by which water might be provided and the cost involved, the conclusion they put forward was that it would have been cheaper to build houses in a new settlement close to the nearest village and give them all free houses, rather than try to provide the water to their existing dwellings. In the Irish context if you look at the cost of providing a whole range of services in our rural areas, at the implications for things like education — since that has become a contentious point over this very question of distances from school — and at implications for other services not provided by the State directly, but by State companies, such as the cost of providing electricity in some rural areas you end up saying that what you need is a number of studies on a locational basis for groups of services. You might then find that you want to lay down some sort of guidelines or standards as to the maximum amount of grant subsidy which you will give towards the provision so that you might encourage people to say in effect, "We will give you £x thousand towards the cost of getting your water or electricity, but really for that amount of money you can possibly get yourself a free house close to the village". The choice should be left to the person concerned — that is democracy — but some sense of financial responsibility should be built in.

That brings me to my conclusion in fear that I have wandered too far from the topic. This whole area has been a very confused and scattered subject for many years because so many of the practices had grown up over a century or more, and when we entered a phase of rapid change and development over the last decades, the system could not cope. You can get by with an old water pipe when just a trickle of water is coming through it but when you suddenly improve the supply and pressure is coming through the main it starts to develop leaks and bursts all over the place. That is what has been happening to our local financial system. It is not a quick or easy job to patch up the leaks and bursts nor to take out the old pipes and put in new ones but both jobs must be done.

The Bill before the House is patching up and putting, in one or two of the connections for the new system. In that spirit it will be welcomed. I hope that before too long we will have more Bills that will bring further instalments of the new piping system for a better set of financial relationships between central and local government.

Mr. Ferris

I compliment Senator O'Donoghue on his very reasoned contribution to this leglisation. He must be privy to some of my Labour Party documents on this subject because many of the views he has expressed convey the long-term attitude of our party regarding this whole area of local democracy, being self-financing and members being democratically elected and responsible to the people who elect them in their control over the spending of amounts of the money that they can determine in their local area. The views that have been expressed by Senator O'Donoghue have been expressed by many of us in policy committees of the Labour Party

It is obvious that this measure which the Minister has put to this House today is an interim one. Indeed, in his Second Stage speech he has confirmed that the whole area of the financing of local authorities is currently being reviewed in his Department. This is very necessary. As a member of a local authority I have found myself frustrated totally — especially over the last ten years — with the financing system of local authorities in that the elected members had relatively no control over determining their own finances and so were totally limited in the service they could provide for the people who elected them to give them a service in areas that are so vital, such as the provision of sanitary services whether water or sewerage, the provision of housing, the provision of essential services such as fire brigades, refuse collection and all of the other areas in which demands are made on them.

Parts of rural Ireland have enjoyed a good measure of increased services due to progressive county councils down the years. My county has shown itself to be the premier county particularly in relation to the provision of water schemes. When County Clare were still engaged in providing little group schemes South Tipperary were initiating major regional piped water supplies to the whole area from the top of the Galtee mountains, which the Leas-Chathaoirleach knows very well, to the borders of County Limerick. We were the most progressive county——

Mr. O'Leary

Extravagant is a better word.

Mr. Ferris

That would be a question to be discussed——

Dr. O'Donoghue

On a point of order, I think it is unfair of Senator Ferris to make such a contribution at a time when Clare is unable to defend itself.

An Leas-Chathaoirleach

They do that regularly. Putting me in the Chair was a way of silencing me. Senator Ferris to continue.

Mr. Ferris

I might as well say that your sister has been instrumental in assisting us in trying to ensure that our water supply is one of the most progressive in the country. The anomaly is that because we have been so progressive the capital charges now being repaid by the council make our water supply probably one of the most expensive in the country. Counties which have not been so progressive and have very small schemes have been able to get away with a £20 water charge in rural areas while we have been suffering from a £40 water charge.

The other anomaly which this Bill will rectify is in relation to the position that urban authorities who benefited from the county council water supply to augment their now depressed supplies were getting water from us and paying a charge to us but were unable to pass on that charge to their consumers. Local authorities at urban level particularly could not recompense themselves for payment to the parent body — that is the county council — and were precluded by statute from making a charge since the abolition of rates. Wealthy people living in urban areas and towns had free water and an unfortunate person living on the perimeter of the town in the rural area — possibly an ordinary PAYE payer — was faced with a water charge. This person was satisfied to pay for the service because although water is God-given it has to be piped by some local authority, filtered and delivered. Provided there are exemptions and provision for a waiver of these charges, it is fair that those who can afford to pay for a service should be asked to pay for that service. The only alternative is the rating system, which has been found to be unconstitutional and cannot be operated in the same manner as in the past.

The Minister has assured us that a total review is taking place in the Department of a proper system of financing for local authorities. We are faced with the inevitable choice of making charges for services which people require and can afford to pay for. Regarding the schemes which we already have operating at local authority level on a county basis, I made representations directly to my manager to ensure that when this legislation was passed he would not without recourse to the members of the authority initiate a whole scale of charges into which the members would have had no input or refuse to initiate a waiver scheme which the councils would like to have. I am glad to confirm that the manager of South Tipperary County Council has put in writing that it is his intention, as he pointed out when the estimates for the council were discussed, to introduce a rates relief scheme in association with any such scheme of charges that would be operated by the council. He intends to consult with the elected members of each of the councils in the urban areas prior to the introduction of the scheme of charges and he will also have discussions with them about the introduction of a rates relief scheme.

The Minister has not spelled out these reliefs in his Bill. The local members will need to have a major input because there are varying degrees of hardship in various counties, particularly in disadvantaged areas and mountain areas where people would pay any price for water. Unfortunately they have not got it on tap yet and therefore it is very difficult to make a blank charge for sanitary services. The manager has confirmed that when the charges are implemented a scheme of rates relief from the charge will run side by side with the charges, that both these decisions would be made by elected members of the council and that he in his reserved function as manager, will carry out the decision of the council.

Some of the following categories are the kind that we will ensure are exempted from these charges: contributory or non-contributory old age pensioners, contributory or non-contributory social welfare widow pensioners, blind pensioners, disabled persons who are in receipt of a maintenance allowance, recipients of invalidity pensions from the Department of Social Welfare, deserted wife's allowance recipients and unmarried mothers in receipt of an allowance. These are specified categories in the county council scheme and will apply also in the urban areas.

They cover quite a broad spectrum of people who, although socially in need of the service in question, will be exempted from the payment of any charge for it. Nothing could be fairer than that and those who can afford to pay for the charge will now be requested to do so. People living in towns and in urban areas, corporation areas and the country will be expected to pay their fair share towards the service which they demand from us as elected members.

We elected members have been frustrated when we found our powers being eroded. This Bill is a small gesture towards handing back some autonomy to members of local authorities in deciding on a charge for provision of services and whom to charge. Restrictions by previous Governments of both persuasions prevented the authorities from striking a rate above a certain level and thus left all the councils in difficulty, particularly in the areas of road making where the cost escalated since the oil crisis. Various Ministers confined rate increases to 10 per cent or 11 per cent when the cost increases in road making materials suddenly became subject to VAT and were running at 25 per cent and 30 per cent. It was inevitable that local authorities would find themselves running into the red, with bank overdrafts and the crazy situation where a specific sum had to be set aside out of the next year's rates to pay for the previous year's overdraft. Councils were slowly grinding to a halt and it became necessary for the Government to take action to hand back in some way the power to make charges for services which had been previously exempted by way of statute because of the elimination of rates.

With the change in the rating system councils were forbidden to strike their own rate without due recourse to the Exchequer, and the Minister has pointed out that we are in credit to the tune of almost £6 million. At the end of last year all the county councils must have been about £100 million in the red because of the way local finances were going and the restrictions placed on them by central Government. Local authorities provide a tremendously important local service. They are locally elected people who are held responsible to the electorate for the quality and level of that service. They are subjected to all the pressures about showing a certain sense of responsibility and not striking outrageous rates. Any local authority member who would do so at the next election would find great difficulty in being re-elected. There was always a certain constraint. We were always subject to lobbying. The Chairman, once a member of a local authority, will remember the old days and the lobbying from those who paid high rates, on rates estimate day. There was never any possibility that we would lose our heads and strike an astronomical rate without having regard to our electorate.

If the Government recognise that elected members at local level are responsible people they need have no worry about conferring powers on us that would ensure that the services are still provided. People who needed and demanded a service which we would follow through by a motion to the council to provide were always reasonable in their attitude to local authority members on the day of reckoning - and that used to be estimates day.

The injection of funds by this Government earlier in the year of something like £31,500,000 relieved in some way the crisis which had arisen for local authorities particularly in the preservation of employment. The local authority in each county are a major employer of an ordinary type of work force involved in road making, water pipe laying and sewerage pipe facilities. In all that outdoor activity a county council are equivalent to a decent sized factory and have always paid the proper rate to their men whose trade union representatives have always been concerned that we had a dual role to provide a service and maintain as much as possible the highest rates of employment in delivering the service.

I am glad that the youth employment scheme has now, through the Minister for the Environment, been delivered to county councils in the sum of about £10 million. Each local authority can now employ something like 30 additional staff in youth employment schemes which are so beneficial, particularly in the area of amenity schemes. Something has been done to try to get local authorities out of the financial mess that they are in through no fault of their own. Whereas the media might like to project the image that the debt incurred was the responsibility of councillors, it was the result of successive legislation which precluded councillors from taking action in the area in which they were elected.

I am now concerned about certain statutory demands that have been made by the county committees of agriculture, the VE committees, library committees and other such statutory bodies. The county council in South Tipperary are at present faced with a statutory demand from the county committee of ACOT which they say they are unable to meet, even though they admit liability. This is because of a lack of special allocations in this field. As Chairman of the General Council of Agricultural Committees, the information is available to me that some eight or nine county councils throughout Ireland are unable to meet statutory requirements under this heading. Some counties which are responsible for land drainage and other public authority works are faced with astronomical charges over which they have no control. The local authorities seem to have great difficulty in meeting those charges. I would ask the Minister of State to look in particular at that area of statutory demand on authorities and to ensure that we will be able to fulfil the statutory demands. There is no point in my county council telling me that they are unable to pay the county committee of agriculture when that committee are faced with the problems of curtailing specialised services like amenity horticultural schemes or the employment of a home economic adviser.

ACOT are unable to borrow to maintain those advisers in employment unlike county councils who have the power to do so. Curtailment of services, because local authorities due to the decision about rates cannot meet their statutory requirements, is an area I am extremely concerned about.

I am glad the amount that will be raised by way of charges will normally be processed by elected members. It will be done in the context of the rate struck at the last estimates meeting and if there is a deficit shown it must be made up by charges. I am glad council members will have the power and authority to determine where those charges are made. It may not be necessarily a charge for a litter bin or something specific like that and there could be an overall sanitary service charge for people living in an urban area who enjoy the service while those living in a county area may not be asked to pay such a charge. People in rural areas do not avail of dustbin collections. If such flexibility is available to elected members, in consultation with the manager, I am satisfied the Bill will go some way towards making up the deficit we have. It will also ensure that local authorities have some autonomy and still have sufficient funds to provide the life saving services necessary at local authority level. Those who can afford to pay for them should be asked to do so and given the facility of an instalment system of payment if they are unable to pay in one sum. I have spelled out those categories that will be exempt.

This is a reasonable piece of legislation and I accept it as an interim measure. I look forward to the day when local authorities, as Senator O'Donoghue said, will be totally and completely self-financing and there will be as little a measure of central control on them as possible. Local representatives are responsible people and will do the job properly if we have the legislation and the power to do so. I am aware that the General Council of County Councils made a submission along these lines to the Minister. They see their role evolving in this area of local democracy. If there is a total review — I feel there is a need for one — the Minister and the Minister of State should look at the advisability of holding the local elections in 1984. That should be considered particularly if we are in the throes of a review of the future of local authorities and the powers and functions such members should have in future in regard to financing themselves. I thank the Minister for his presentation of the Bill. Some of the charges that have been laid at his feet that this amounts to rates by the backdoor have been wiped away by the introductory speech today. Any Member who is a member of a local authority will find that this is reasonable legislation. It is one we can accept as an interim measure provided there is proper relief for those who are unable to pay the charges.

Acting Chairman (Mr. Smith)

Now that we are not having local elections next year I call on Senator Honan.

Mrs. Honan

I do not know whether I had the opportunity already to welcome the Minister of State, a former Member of this House, but if I had not I should like to do so now. After this Bill passes he could well be back here again. The Minister seems to have learned quite a bit since the debate in the other House if one is to judge by his speech. It proves once again that he is very switched on and that he gets the message very quickly. I understand that changes have to be made in regard to the financing of local authorities but I object to the way it is being done if it means taking power from elected members of the council. My colleagues did not refer to what I intend to deal with, that county managers are getting more power than we, the elected members, will have. I am glad to see that the legislation will be temporary. I only learned that from this morning's speech because I had intended appealing to the Minister to take a look at it in about two years or so, presuming he is still in power, to see whether it is working or not.

Mr. Quinn

I did not realise the Senator was anxious to hit the Seanad trail again.

Mrs. Honan

The Seanad trail never worries me. It might worry the Minister much more.

An Cathaoirleach

Senator Honan to continue, and the Minister should not be encouraging interruptions.

Mrs. Honan

It was the Minister who prompted me. He knows well enough not to make those comments. The Bill received very little media coverage and when every householder, trader, industrialist and land owner discovers the eventual effects of it and the cost we may well remember 30 June in the Seanad. It is nice to listen to Senator O'Donoghue pontificating about what could be done and all that but when he has been in local government as long as I have been he may think differently. The Bill is quite a good platform for us on this side of the House approaching local government election year which I look forward to with enormous excitement. This will be the first test of the Coalition Government going before the people. The Bill will be remembered by all people. The Minister need not bother too much trying to sell this any more because we will do it very well for him in the constituencies.

Mr. Quinn

That is what I am afraid of.

Mrs. Honan

By then we will have told the people that it could be £30 this year, £60 next year or £90 the year after. If the Minister tries to tell me that that is not rates by another name he is wrong. He might cod some people but he is certainly not codding the people on this side or the Fianna Fáil Party.

Mr. Ferris

The Way Forward.

Mrs. Honan

I love the way Members on the Government side refer to The Way Forward and on other occasions they refer to our manifesto. I wish to God they would go away and get some book of their own and put a name on the cover of it so that we could refer to it. I would like to ask the Minister if the General Council of County Councils and the Municipal Authorities of Ireland approved of the Bill. Did they have any input or know what is proposed? They are the two bodies right across the board who represent all elected representatives at local authority level.

I see that in the course of the debate on the Bill in the Dáil the Minister said he believed we were on the right track in getting back towards a sensible system of local authority financing but he did not claim that all that is needed can be done at once.

Is this the beginning of the Minister's charges or are there more to follow? We will probably hear about those after the local elections. Deputy Molloy, with a little bit more sense, said at column 279 of the Dáil Official Report of 1 June 1983 that the Bill enabled the Minister to require the manager to level charges for services which would generate revenue equal to the combined poundage of the domestic and agricultural rates, irrespective of the wishes of local authority members. I am sure that there are more sensible Senators on the Government side who will probably agree with me. I can appreciate that while Senator Ferris paid a compliment to me about being from two counties, he had to say the right things here. The nice thing I found when we were in Government was that I said what I honestly believed but I appreciate Senator Ferris had to say the right things with the Minister present.

I am sure some county council members and, indeed, the public at large are by no means aware of the implications of the Bill. We have before us in this legislation charges that will become the main source of finance to local authorities in the years ahead. This can be done only by way of heavy imposition on all householders in every local authority area. While council members may not be aware of the implications today the Clare assistant county manager last Monday night told me, an elected Member of this House, that this Bill had already been signed by the President and was law. If he is confused what chance have any of us?

There is one very important point which must be cleared up and the Minister will have to explain how he intends to deal with this matter. If a group of householders decide not to use the refuse service passing their doors what will the situation be? We are living in a democratic country and we can do what we want but county managers did not understand, following recent discussions at local authority meetings, whether such people would have to pay the refuse charges or would be exempt. Senator Smith, who has had many years of experience in local government, said he would not support putting a charge on refuse collection because he could not see how it would be implemented. Senator O'Donoghue a few moments ago put forward a solution based on what he saw on one of his trips abroad, which only some of us get — most of us are sensible enough to stay at home and mind what we should be minding. He suggested a cost per bin. One can put out bins or put them up and down the road but in the end the question of who pays what for the bin will be a matter for county councillors. I am glad to see Senator Ferris is smiling.

There is so much in the Bill that I am not quite sure if the Minister, or the Minister of State, really read through it. The more local taxation collected by any means the less will be the amount of block grant to local authorities. It reduces the onus of central Government to give money to local authorities for various services. The local authorities then have to find money and tell the people who elected them that the money has to be got. We will be told that we have the authority under this Bill, that we can get the money by increasing the charges on people in towns and villages but it will finish up at my door as a councillor, and as a Member of this House, and the door of every other councillor but certainly anybody with a problem about these charges will not dare go up the avenue to the county manager's house or ring him to know why these charges are so high.

I am a bit confused about the Bill because it is different from the one introduced in the Dáil because the Minister copped himself on a little and saw his mistake. There is an old quotation the Minister should remember about certain friends when he makes the top because he might well need them when he comes down again. I do not have to tell him who they are.

Mr. Quinn

I will never forget the Senator.

Mrs. Honan

I constantly look after my constituents. I agree with the principle that local authorities should have the power to charge for services but only to supplement their income. The Minister may tell me that changes did take place in the minds of all county managers. They were totally opposed to this Bill, or any levy, last year. I would like to know who had a chat with this group of men — they have not got a woman in their group yet. We all know that when they decide to crack the whip everyone comes to heel. Who had the little chat with the county managers and told them that they would be given the power and not the elected representatives? I presume it was the Minister who has that lovely gracious way about him when having a little chat but if one thinks of what he has said it has a completely different meaning. The county managers agree with the Coalition Government but they certainly did not agree with Fianna Fáil because we had only one way, no taxation without representation. That is Fianna Fáil's policy. Councils have statutory obligations to pay other bodies — there were several comments about that — for services to ACOT, the health boards, the VECs and for public buildings. I understand that all of that has to be collected. These charges amount to a form of taxation and only elected members have the power to level any form of taxation. Officials do not have that power.

I would like to ask the Minister who will collect these new charges? What will it cost to collect them? Are we going to have another bureaucratic group? Instead of coming back and telling us in two years time that it is all working fine we could be told it was necessary to give somebody the power to double the charge. I say this because I have a horror of changes. It has not been until recently in my public life that I was prepared to accept change but I have seen so many mistakes made with change that it concerns me. I should like to pay tribute to the Minister for Health who was excellent on television the other night. Extraordinary enough, I give credit where credit is due. The Minister and I have one thing in common, our concern about the cost of the administration of the health boards. The reason I have a fear about new costs and charges is the end result — will the service be better or worse while the cost is so great? I must repeat that the Minister was excellent on the programme. He even had a sense of humour which I had not given him credit for.

Mr. Smith

He got that after a visit to Knock.

Mr. O'Leary

A flying visit.

Mrs. Honan

The Minister should give the nature of the exact power of reserved functions.

Mr. Quinn

In relation to this aspect?

Mrs. Honan

Yes. Already the Minister has said he will take a look at this again. He was so good to change his draft speech he might take a look at the few mistakes in the Bill. If he wants to survive politically he might remember who will keep him in power. I have had long experience of local government affairs and I have pride and respect for those who serve on local authorities. I say that with sincerity regardless of the fact that they are the people who make it possible for me to be a Member of the Seanad. Between my father-in-law, my husband and myself we have served local government in Clare for 62 years. There was a break of four years but I saw to it that that was a temporary break. I have a commitment to local government. The sad thing is that because so many senior Ministers never served on local authorities they do not have the same respect for those elected to such bodies that they should. In the changing Ireland the respect for people serving in local government has not changed although that is not so in regard to others. County councillors and urban councillors have held their position because they have served the nation well. In some constituencies people are stupid enough to play politics in council chambers but rarely does politics interfere with local deliberations.

If the Bill left power with the elected personnel of the councils it might be acceptable but if it gives power to the county managers I have certain reservations. I will not pay tribute to any particular county manager. The Minister in his speech said:

Local authorities are now responsible for a vast amount of public spending and cannot be isolated in any way from the need, under current economic conditions to take full account, in their demands and in their expenditures, of the realities of the times; to practice all possible means of achieving savings and to ensure the most effective possible use of their resources.

The councils have always done that and money was not wasted in any constituency. The Minister said also:

...I have undertaken to review the practical operation of the arrangements in two years time.

I welcome that. I hope the Minister will still be in power to do that. If he is not we will do it for him, if we do not do it in the local elections.

Sitting suspended at 1 p.m. and resumed at 2 p.m.

Mr. Cregan

As a local authority member I naturally have to agree with what has been said by the Minister. I am conscious, in saying that, that if the impression is given that more authority is now being given back to local authorities that will have to be questioned. Why do I say that? I have always been in favour of bringing about a situation that the money collected by our people should be collected on a broader basis rather than a narrower basis. I mean by that that if we are seen to be taking money from people that we were not taking since 1977, even though it was rates, at least we can say to another sector, the PAYE sector in particular, that we are broadening tax collection.

It is a form of tax. Even though people say it is a charge for services, it is a form of collecting other money so that the Government have to hand out less. In principle, I do not see anything wrong with creating a situation where we will say to a person, whether he is self-employed or a person who does not have to pay PAYE directly, that he will have to pay for services that local authorities provide. There is nothing really wrong with what is happening.

The impression coming from this debate is that more authority is being given to local councils and to management. I do not look at it in that light. I do not think that they are saying to us at this stage that for far too long local councils have not been getting enough recognition and they have not enough power. The Minister readily admits that after two years he is ready to have another look at the situation if he feels it is not going in the way the councillors would like. The important thing is to say that it is not what the councillors like or it is not what the Minister would like, it is what the people will say and what the people would like.

I listened to many people and I ask what the situation is with regard to collecting service charges. The vast majority of people are conscious of the fact that there must be some type of charge. The question coming across from the political side is: what are the charges for and why are they being implemented for refuse collection, water or anything else? I feel there should be a charge for all the services provided. I do not think any argument can be made by anybody, whether he has piped water or is pumping his own water, that when he comes off his own land or out of his own cottage he is getting services provided by the State. I do not see any argument in that. Are we really saying that more power is going back to local authorities? I hope so. I know, like Senator Honan, that you get a sincere effort from every side in the vast majority of councils. I would appreciate it if the Ministers would take particular notice of that because I am very conscious of it. I do not say it because I am one of them. Councillors are not recognised for what they are. You see that best at estimates time, when you see councillors fighting over £100 when they could be talking about spending, for instance, in Cork Corporation, something in the region of £30 million to £32 million a year. They are prepared to argue for an hour if they think the wrong thing is being done.

This Bill is not, in actual fact, giving councillors the recognition they deserve. It is only trying to bring about diversifacation from one area to collect money and go into another area and broaden the tax collection. It is about time it was done. We will catch many people who normally were not paying money. Local authorities do many things that I feel they should not do. There are areas they have to service which could be serviced elsewhere. These are areas that should be looked at and where a lot of money could be saved. Are we conscious of this? Is enough being done in these areas, between one Department and another to see whether it could be done without extra money being spent? In Cork Corporation, with which I am most familiar, supplementary welfare, for instance, has to be implemented at local authority level by the corporation and yet it is implemented no more than 200 yards away by somebody else. It is also implemented by the health department 300 yards away. Why do we ask three different departments to implement this at three different charges? That can be tightened up and a lot of money could be saved. Not alone do we have to implement the service but we have to pay for the person implementing it and we do not get a proper return from the Government for it.

The Minister might be creating something which I have often mentioned here before, block grants, so that we could be paying for those. I welcome that. Is he going far enough? In Cork Corporation we are asked to collect about £1 million this year. If we collect £1½ million next year — naturally I imagine it will increase — we will get less from the Government. It is most unfair to local authorities to give the impression that things are working right. That is not so because there are too many people involved and there are too many awkward areas that we cannot do anything about, that we have no say in.

For instance, we have to maintain all local government buildings, like courthouses. There is another Department that could handle them. Maybe they are saying why should the local authority not do it when they are getting the money from us? They are not properly going about doing the thing they are best able to do. There is too much involved in supplementary welfare, Civil Defence and malicious claims, which is most unfair to local authorities. The impression is given, unfortunately — I am sure this is the same throughout the country — that because of the vast amount of vandalism generally there is no problem, that Cork Corporation can pay the claims. If that situation was tightened up there is no reason why claims could not be sent to the Department of Justice or elsewhere.

Mr. Quinn

Or the insurance companies.

Mr. Cregan

Why not? They get enough out of it. I thought that I would be broadening the discussion if I spoke about insurance companies. I am quite prepared to say that the insurance companies should accept a greater onus. Unfortunately local authorities are at the head of the line in relation to making any type of claim against the State. This is unfortunate. It is an area that should be looked at because we are talking about a lot of money especially in relation to malicious claims. Perhaps there would not be need for malicious claims if there was proper supervision by the Garda and there was a sufficient number of them in the streets.

I am conscious that some local authorities can get the capital grant from the Government on a valuation basis. There are some areas where the valuation is not as high in comparison to others.

The revision of valuations has not taken place as often as it should. That has been brought before us at local level and, unfortunately, nothing has been done about it. Things seem to deteriorate over the years because of low valuations. The revision of valuations should be looked at. I am in favour of the block grant system because this Bill will bring about a situation where you will see more responsibility being given to local authority councillors. I am very confident that the councillors will take the responsibility. If local authorities are not taking their responsibilities seriously and they are getting block grants, who is to be the watchdog? That is a very serious question. The people are asking if the Oireachtas is more involved in debating local issues rather than national issues. Members of the Oireachtas should be watchdogs at local level if we are to allocate block grants to all authorities. Will we have proper watchdogs in relation to this Bill? Could we have a situation where people could do the wrong thing or will one authority be as good as another? As another Senator has already said, they could learn from a better authority because there are some authorities who are doing their work much better than others.

From my own experience of driving around the country I am conscious that much more work than is being done could be done by some local authorities. It is hoped that serious consideration will be given to the block grant system. Grants which are given to local authorities throughout the year for particular schemes come in three different forms. This is very confusing. The Minister of State said they want more authority yet they are saying that only in some schemes is a full grant or loan given to them. For instance, if new roads are built or we improve our roads a full grant is given and no further payment is required.

Mr. Quinn

Only for national primary roads.

Mr. Cregan

Yes. Loans are given for housing which are paid back over a 30 year period. The Government pay back the whole lot to us at the end of the year and they pay the interest on the loan. On sanitary services only half the amount is paid. What is the difference between a road and sanitary services? How can we say that the authorities are really getting their right amount or that they are getting fair play from the Government when we have to provide all the services which go under the national road but we only get half of it and only half the interest is recovered? I know the sanitary services and the national roads are used by people locally and national roads are used by everybody but it is unfair to say that not enough recognition is given to this area. For instance, Senator FitzGerald said that Dublin Corporation are building in the county council area. One can imagine the large amount of money being spent on sanitary services there. One can imagine what the Dublin Corporation bill for sanitary services is yet only half is recouped from the Government. They have to be constantly building in Dublin because of the population, so slowly but surely they must be smothering themselves as a local authority. How can a situation be brought about whereby one can say that they should not have to spend so much?

Mrs. Honan

Decentralisation.

Mr. Cregan

Decentralisation probably could work. At the same time who is the watchdog? Who is going to watch the money that is being spent? I do not want to bring about a situation where people will say to Dublin Corporation, "Here is £50 million, £60 million or £70 million". Who is going to watch it? That is a very serious area.

The Minister of State said that between 1978 and 1982 the poundage rate jumped by 73 per cent whereas the consumer price index rose by 102 per cent. It is appreciated that the consumer price index rose by 102 per cent but I hope the impression is not given that because inflation rose by 102 per cent or more that increases should rise by 102 per cent. Who created inflation? Why is it there? It is not right to say that because inflation rises by 102 per cent rates and everything else should rise by the same amount. The question which should be asked is why did prices rise so much? Why did we allow them to rise so much? Are we saying that managers should be spending accordingly because inflation was jumping at 102 per cent within that four year period?

These are areas at which we should not really be looking and saying we were doing the wrong thing at that time or that we were giving the impression that local authorities were not getting the right amount. Example should be given by people at the top, at Government level. The Government should tell local authorities to cut down expenditure

On the question of charges there is no objection generally from the public. There is an area in local authority where even with this Bill enough authority is not coming back. The Minister has readily admitted that some people cannot pay and he is not demanding but only recommending. He is only making a recommendation that if people cannot pay he is not asking them to pay. The local manager and council will decide what a person should pay. That is a fair point which has to be emphasised more. That was not there when we had rates. A rate demand was a demand. This is not a demand.

I would like to know if the Minister will say to every local authority at the start of each year that he will give money to be utilised in whatever way they see fit. There is a vast number of areas which I know can be improved on if local authorities are allowed to do the work themselves. Why is it that for every little thing you want to do you must ask the relevant Minister? Indeed, £1,700 million can be spent on health charges which are not questioned.

Mr. Quinn

The reason is that the Minister sees himself as the watchdog the Senator is looking for.

Mr. Cregan

I appreciate that. At the same time the Minister is saying to me that any Minister for Health can watch everything that goes on in health boards. The point is he cannot. The amount of money that is being spent in health boards is unbelievable. No Minister could watch it. The Minister should bring about a situation in which he should allow his local authority, local councillor and his local party to watch it. That is what they are there for. We are not allowed to do that at health level at the moment.

I am on a particular voluntary hospital board in Cork city where we seem to be watching every penny that can be spent because it is at voluntary hospital level. I know where every £1,000 is going but I cannot say that about the Southern Health Board. I am on an advisory board there.

An Cathaoirleach

The Senator is now getting very far away from the Bill. He was sailing close to the wind for a good while but he is moving away from the Bill altogether now.

Mr. Cregan

I want to make the point that we should do the same thing at local authority level because when we talk about that we are talking about Cork Corporation getting something in the region of £30 million a year from the Government. Yet I cannot decide to build a toilet without getting planning permission from the Minister for the Environment. I hope the Minister will look at the mandatory changes that have to be implemented by local authorities at the moment. Serious questions should be asked about fire stations which have to be paid for by local authorities. The people involved in this service do valuable work but the whole matter of their financing should be reconsidered. The extension of the services provided by local authorities means that we are unable to monitor them and check on them. Things could be tightened up a lot. Much money could be saved and at the end of the day that is what people are talking about. I know the Minister is giving more authority to local councils but I do not want to say I support the Bill for that reason. I do not think it would be right or proper to say that.

At the end of the day the manager still has the right to charge what he wants. He has a managerial function that an elected member of the council has not got. He has implemented the charges in which members have had no voice up until now. We must remember that when charges are implemented the rate to the consumer increases. For instance, if the manager increases the water rate to a commercial concern in Cork city this increased charge will be passed on. In my view managers should be seen to be doing more in that area. There are areas in which managers seem to be continuing with expenditure even when everybody else is economising. They must be told not to continue in this way. In some instances commercial firms had to pay increased water rates. That was done because the central Government wanted more money. Then they ask why are interest rates so high. In fact it is due to the actions of central Government. We have a responsibility there and I would appreciate it if it could be looked at seriously. I agree with the Government that only a certain amount should be paid out in wage claims. I think that an example should be shown elsewhere as well. The managers throughout the country are not seen to be doing enough in their areas. If a manager needs more money, irrespective of what local councillors may say, he will increase parking charges by 100 per cent. It is a managerial function. The Minister said today that we will have a say in such matters but at the moment we do not have a say. If he wants to change that, he should go the whole hog and give full responsibility to the councillors of that area.

An Cathaoirleach

A reference to county managers is in order but the Senator is dealing with that matter in depth.

Mr. Cregan

We are talking about giving authority to local authorities. The brief is before us. The Minister has told us that he will review the matter after two years. I do not think members should take responsibility for implementing changes if they have no say in the matter. I am conscious of particular areas where local authorities are seen to be providing services for which they do not get enough money and I mentioned some of the areas such as malicious claims, supplementary welfare, Civil Defence and fuel vouchers. I am under no illusion that I will have more authority at the end of this year or when this Bill is implemented. I certainly will not.

Mr. Mullooly

As a member of a local authority I welcome the opportunity to make a brief contribution to this debate on the Local Government (Financial Provisions) (No. 2) Bill. Local authorities provide infrastructure and services for the public at local level. By so doing it can be said they make a significant contribution to the well-being and development of the country. The Minister stated that the main purpose of this Bill is to give power to local authorities to impose charges for the services they provide to persons or in respect of premises. In view of the present difficulties of local authorities in so far as revenue expenditure is concerned I agree that there is a need to broaden their revenue base and charging for services is one way in which local authorities could supplement their existing revenue income.

I want to make it clear that if the purpose of this Bill were simply to enable local authorities to increase their income by charging for services which at the moment in many cases are provided free of charge, I would have no hesitation in welcoming this Bill but the Bill goes much further than that. What is proposed is the restructuring of the method of financing local authorities and the re-introduction of domestic rates in another form. This Bill will reduce further the powers of the local members and all of this without any guarantee whatsoever of an improvement in the financial position of local authorities.

Since the passing of the 1978 Local Government (Financial Provisions) Act until this year the position has been that local authorities have been paid from central funds the domestic rate relief grant which compensated them in full for the cost of the relief given. The same obtained as far as agricultural rates were concerned. The agricultural grant compensated in full for the cost of agricultural rates relief. The snag, of course, was that the Government or the Minister for the Environment put a limit on the percentage by which local authorities could increase the rate in the £. This year the system was changed. The Government did not set any limit by which the rate in the £ could be increased but the agricultural and domestic rates relief grants were replaced by block grants.

In County Roscommon, these grants were far short of what we should have received if the procedure of previous years had been followed. I assume the same applies as far as most other counties are concerned. The cash grants which we receive in lieu of the agricultural and domestic rates relief grants in the current year, represent an increase of only 6.6 per cent on the 1982 figure. Therefore, it is easy to see why we in County Roscommon — and I assume the same obtains in most other counties — are in a disastrous financial situation at present and we will continue to be for the remainder of the current year.

To say that we can make up the shortfall by imposing local charges is unrealistic. Already we were imposing fairly hefty charges for water and in a mainly agricultural county, without any major urban centres, scope for other charges is limited. It must be very obvious that all local authorities have not and will not have the same capacity to raise funds from the proposed charges. Yet from now on, if this Bill is passed, the situation which obtains this year is going to continue. As I see it, the financial problems of local authorities are going to get worse rather than better because there will be no obligation on the Minister to recoup to local authorities a specific amount in lieu of domestic rates or agricultural rates.

The position which obtained since the passing of the 1978 Act until this year, appeared reasonable enough at first glance. It seemed to be logical that in order to limit the demands on the Exchequer and to protect the interests of commercial and industrial ratepayers the Government should have the power to put a limit on the percentage by which the rate in the £ could be increased. However, a combination of different factors led to serious financial problems for the majority of local authorities. First, the percentage increase allowed did not keep pace with inflation and with the rising costs. For instance the cost of road and construction materials was referred to earlier on by Senator Ferris. He pointed out that the cost of these materials increased by anything from 25 to 30 per cent in years when we were limited to a 10 or 11 per cent increase on our rates. Furthermore, bank interest charges increased. In actual fact there was an increase in the cost of providing all the services that were being provided by local authorities. Secondly, the statutory demands on local authorities from other public bodies increased by a considerable percentage, in some cases over the percentage which was granted to local authorities. In the current year the Office of Public Works demand on Roscommon County Council is 48.9 per cent higher than it was in 1982. In the same way the statutory demands from the county committee of agriculture, the vocational education committee and the health board also increased by a much higher percentage than that which was allowed to the local authorities.

Another factor which created problems was that the revenue expenditure grants to be recouped, such as road grants and higher education grants, were not paid promptly and still are not paid promptly. This, of course, involves the local authority in interest charges which could be avoided if these grants were paid more promptly to the local authorities.

New functions and duties were assigned to local authorities since 1977 for which there was no pre-1977 rate base. In addition to that, there were staff regrading and rationalisation schemes and other wage and salary increases which put a strain on the finances of local authorities. We had the revised superannuation scheme of 1977, the increase in the number of former employees of the local authority in receipt of pensions. All these factors put a very considerable strain on the finances of local authorities and they resulted in a serious deterioration of the financial position of most local authorities in the past few years.

I hope the Cathaoirleach will forgive me if I refer again to the position in Roscommon as I am a member of that local authority. Like Senator Smith, I do not want to be parochial but I believe the position in Roscommon is a microcosm of the situation at national level as far as local authorities are concerned. Our policy since 1977 has been to provide in the estimates reasonable funds for the statutory demands and all the services other than county roads and having done this to allocate the balance of the funds available to the upkeep of county roads. What has happened? In 1977 the amount spent on our county roads was approximately £845,000. If this expenditure were to keep pace with inflation, the provision in this year's estimates should have been in the region of £2,050,000 but the position is that the amount which the council could provide in the current year was only £823,000. This represents a shortfall of £1,227,000 on what we would need. If we were to add to that the estimated shortfall since 1977 we would be talking of a figure approaching £5 million. The net result is that because of lack of maintenance and lack of surface dressing much of our network of county roads is in danger of breaking up. Since our county is a predominantly agricultural county, with a high proportion of the population living in rural areas, it is very important that our county roads should be maintained to a reasonable standard. It is essential to the general well-being and to the commercial life of the county.

As well as those county roads to which I have referred, we have also identified a significant mileage of county road which, apart from suffering from a deteriorating surface, is too narrow to take modem agricultural machinery. This, too, is causing us problems.

When I came to look at this Bill, I looked at it from the point of view of what extra funds it might help us to generate and thereby assist us in bringing our county roads up to minimum acceptable standards. I have come to the conclusion that instead of assisting us this Bill will increase our financial problems and exacerbate our financial difficulties. As an agricultural county, with a high proportion of the population living in rural areas, we will not have the same capacity to raise funds from charges as will the more urbanised counties. We will be losing out on Government grants.

Another effect of this Bill will be to reduce or curtail further the powers of the elected members of local authorities. The levying of the charges and the operation of the proposed waiver scheme will be executive functions exercised by the county manager. The elected representatives will have very little say in how these functions will be exercised. Furthermore, there is no provision in the Bill to deal with the urgent problems facing local authorities of having to meet the ever-increasing statutory demands to which I have referred. In some cases these statutory demands can be described as exorbitant.

I cannot see how this Bill will improve the situation of local authorities. The Minister will simply notify the local authority at the start of the financial year of the amount of the grant which he proposes to make to the authority. Then he will give a direction to the county manager to levy charges for services which will bridge the gap between the amount of the grant and the combined poundage of the domestic and agricultural rates. The manager must then comply with this directive, irrespective of the views or the wishes of the elected members of the local authority. It is very clear to me that the charges thus being imposed are not for the purpose of increasing or supplementing local authority income. They will not be — as we have been led to believe — a source of additional revenue for the local authorities, because it is very clear that the Minister's intention is to rely more and more on the provisions of this Bill to fund all the services provided by local authorities. That is why I say that this Bill represents the re-introduction of domestic rates.

I am also very concerned about the implications the Bill has for small family businesses in rural towns and villages. In most counties there are many small family businesses which are still paying rates. I refer in particular to the type of premises part of which is used for the family business and part of which is the family residence. The residential portion of the premises has been de-rated but the business portion is still liable for rates. The owners of such premises fell at present that through their rates they are paying for the services which they are receiving from the local authority such as water and sewerage services, refuse collection and so on. They feel that through the imposition of charges for these services they are going to be paying on the double. People to whom I have spoken are very sore about this. All small businesses are feeling the effects of the recession. They see these charges as a further tax being levied on them on top of the other penal taxes which they have to meet and which are being increased with monotonous regularity. The Government have a responsibility to ease the burden on such family businesses rather than increase it by imposing additional charges.

As I said at the outset, I am not against the principle of charges for services provided that such charges are reasonable and will provide an additional source of income for local authorities. However, I believe that any such charges — which are, in effect, a form of taxation — should be levied only by the elected representatives of the people. They are the only people who are entitled to levy taxes because they are answerable to the public and they have to face the electorate at regular intervals.

I do not agree with the proposal in this Bill that the sole power to levy such charges should be vested in the county manager. I believe that this Bill will do nothing to solve the financial problems of local authorities. Its only effect will be to increase the powers of county managers at the expense of the elected members and transfer more and more of the cost of providing local services from the Exchequer to the local community.

Mr. Howard

I welcome the opportunity to speak on and to support the Bill. I support the Bill on two accounts. First, I support what is in it and, secondly, I support it because of what I believe will be possible under it provided that the elected members of local authorities are prepared to fulfil the role the Minister has in mind they should fulfil in discharging their functions as local representatives.

I have listened to practically all of the debate today and it has been generally constructive. I find I am not in agreement with some of the contributions made and I will refer to some of these aspects. Not all the contributions with which I disagree have come from that side of the House, some of them have come from this side of the House. I will refer to them as I go along.

One of the constant themes we have heard in relation to local administration has been the erosion of powers of members of local authorities over the years. Members of local authorities themselves and others constantly have demanded that more responsibility and power be given back to the elected members of local authorities. While some of my colleagues here feel that this Bill will achieve the exact opposite of that, I disagree with them. I believe that the powers of the elected members of local authorities will be increased under the terms of this Bill. This, however, depends on one factor and that is the willingness and capacity of the elected members of local authorities to exercise the powers they have and the powers they will have under the terms of this legislation. The elected members of local authorities will in fact now be on trial and the success of the theory of bringing back more power and authority to the elected members will depend on how effectively they discharge their duties and responsibilities in the years ahead.

I wish to refer to an observation made by my colleague, Senator Cregan, who expressed concern about watchdogs. If there are to be watchdogs — and no doubt they are necessary — the most effective watchdogs we can have where local authority expenditure is concerned are the members of the local authorities themselves. I am sure Senator Cregan will accept my disagreement with him on that point.

I have said I believe the powers of local authorities will be strengthened if they are prepared to exercise them. On that point I am in conflict with Senator Mullooly who stated that the power of county managers would be increased under the terms of this Bill. I propose in the course of my contribution to cite the reasons why I disagree with that point of view. I am, however, in agreement with a point made by Senator Mullooly in relation to the small number of ratepayers who are still paying rates and who may well be affected by a double charge under the terms of this Bill. I will deal with this at some length at a later stage.

Senator Smith is not present at the moment but in his contribution earlier he criticised the condition of the road network. Without a doubt it has deteriorated substantially in recent years. I agree with the point made by him that local authority finance has been severely depleted. He also stated that the State was not living up to its financial responsibilities to local authorities. While I am in agreement with him on these three points I want to make it absolutely clear that if he was suggesting that the responsibility for this situation should be laid at the present Minister's door I am in total disagreement with him.

The Minister gave reasons for the present situation. Senator Smith thought that the less said about 1977 the better. I do not wish to provoke a political argument in what has been a very constructive debate up to now. Nonetheless, we cannot ignore that decisions taken in 1977 were a crucial factor in the depletion of finances to local authorities. The Minister gave us the figures this morning. While the CPI rose by 102 per cent, funds available to local authorities from central funds increased by 73 per cent in that period leaving a shortfall of something in the region of 29 per cent. That situation developed over a four-year period. That is one of the reasons why the foundations of our roads are crumbling and why many of the services which councils should be providing for the people in their areas have not been of a satisfactory standard.

The Minister also mentioned — and it should not be ignored — that five years ago the local authorities collectively had a credit balance of £5.8 million and that in that five-year period the situation has been changed around to a collective debit balance of £43 million. This is the answer to the argument made by Senator Smith. The road network is poor, the finances of local authorities have been neglected and the input from central funds has not been of the extent and nature that it should be. This is why local authorities find it so difficult to carry out their work programmes.

Senator Smith and another Senator referred to the question of refuse charges and Senator Smith said he was totally opposed to them.

An Leas-Chathaoirleach

Senator Honan said the same thing.

Mr. Howard

I do not think I heard that part of your contribution although I was here for most of it. The Leas-Chathaoirleach is familiar with the fact that the cost of refuse collection to Clare County Council this year will be in excess of £1 million. Refuse is collected from less than one-third of the households in the county and I see justification for a charge in providing that service. It can be done on an equity basis, a basis on the system of charging. Discretion is given under section 3 of the Act where charges can be related to the quantities of refuse in the different premises. I accept the point that it would be unreasonable that the same charge should apply to a hotel or a commercial premises as to a domestic dwelling. There is provision in section 5 that where hardship would be caused by the imposition of this charge the charge can be waived. That should meet the reservations and objections which have been raised on that point. It is important that we recognise the merits of this proposed legislation and, on balance, the merits by far outweigh the reservations expressed by some of my colleagues.

The reservations expressed here today are considerably less than those expressed in the other House and outside both Houses of the Oireachtas. One reservation has focused on the powers which the county managers are reputed to be receiving under this Bill. It is well to recognise that the powers of the county manager will not be any greater than they are present when this Bill becomes law. In relation to the imposition of charges, as far as charges for water and other services are concerned that power exists at the moment. That power, to whatever extent it increases, and I am referring to something I said earlier, will be related entirely to the measure of responsibility which elected members bring to the fulfilling of their duties on local councils. I visualise a situation where, in future, the revenue for local authorities will come through three separate channels. There will be the block grant from central funds to replace the domestic and agricultural rate, the rates from commercial properties and the new charges which will come into effect under this legislation.

The Minister spoke this morning of the relationship that should exist between the county manager and the elected members. He said that it may well be that estimate committees would be set up and operate in different counties. Irrespective of whether this legislation was to come in or not, estimate committees are an essential part of the whole administration of local government. If the elected members participate effectively in these estimate committees, discuss with the managers and the officials of the council the programme for the coming year and the financing of that programme, and ensure that every item within each programme is fully discussed and assessed on its value first of all to the community and then its value for money and that they insist and ensure that officials justify each item of expenditure, we will come up with a programme within each county that will be of value to the people in that area. We then come to the amount of revenue required for that programme. Revenue will come through the block grant and through the rates from commercial properties and then we are left with a gap. That gap is the amount to be filled from the charges for services. It is within the competence and power of the elected members to estimate what the size of that gap will be and to estimate, in addition to that, what approximately charges would be in relation to the services provided. I see no reason why that cannot be done in consultation and in co-operation with the manager and his officials and if it breaks down — and I see no reason why it should — then we have the Minister's assurance that he will review this whole set up within a two-year period.

I am not concerned that the managers will act as dictators in this situation. Perhaps they will if they are allowed to but the elected members have the power to ensure that their wishes and opinions will prevail. Within my own county council, to a certain extent maybe I am becoming parochial, there is ample evidence of where the wishes and the opinions of the elected members have been accepted by the manager and his officials. There may have been occasions when it took quite an effort to ensure that, but the reality is that the will of the elected members prevailed at the end of the day. If they want to ensure that their will prevails they have the means and the methods to do so.

I wish to refer to the principle of this whole concept of charges for services. On all sides of the House in the debate so far the principle of the concept has been accepted. That is important because anything that is free is never appreciated. If a service is freely available, as has been the case in relation to refuse collection, there is a constant demand being put on local representatives to extend that service, irrespective of the need or value of extending it. It is important that we should get away from this belief, which is damaging to society, that something can be available free. Nothing is free; somebody pays for it. The mentality of society which seeks to avail of something free when somebody else is paying for it is wrong and damaging.

I agree with the point made by Senator Mullooly and other Senators on the question of the risk of a double charge and I should like the Minister to comment on this. The number of ratepayers has diminished steadily over the years. Domestic rates went four or five years ago and, because of a successful action in the High Court, rates on agricultural land have gone also. Therefore, we are left with a tail-end as it were of ratepayers. the owners of commercial property. The majority of those are small businessmen and they are the only remaining ratepayers. But within the rate they pay, an element of these charges is there to cover the cost in part of the services that they may well be charged for under the proposed legislation, water, sewerage, refuse collection and so on. Many of the commercial businesses I am talking about, particularly small businessmen going through a recession at present are finding it difficult to survive. It would be an injustice to charge them on the double for a service that is available as a single charge to everybody else.

I am also aware that a number of them, or at least the trade associations that represent them, are conscious of the successful action that the farmers brought in relation to rates on agricultural land and that they may well be examining ways and means of challenging the rating system on their properties. I have no doubt whatsoever that if the inequity and injustice of a double charge come in as a result of legislation it will add impetus to the move to challenge the rating system. Apart from that, and I know the Minister's commitment to and belief in justice and fair play for all, I want to put it as strongly as I can that it is unjust, wrong and unfair to put a double charge on the last remaining number of ratepayers for the service they are already providing for through their rates. I should be glad to have the Minister's opinion on that point.

This morning the Minister said that there would be guidelines issued. Perhaps that is a point worthy of mention within the guidelines but that alone is not adequate. Perhaps if I have convinced him, in company with other Senators, that there is merit in my arguments, he may consider an amendment to the legislation on the point of the injustice and unfairness of a double charge for certain services to a limited number of people who, because of judicial and political decisions — I am not offending anybody by saying that — have escaped the responsibility of paying rates on their property.

This legislation will give power to the members of local authorities that they have been seeking over the years. I disagree with anyone who says that the county manager is going to have additional or greater powers. He is not, unless they are handed to him on a plate. The elected members have the authority and power virtually to decide the level of these charges. They can limit totally, depending on how effectively they discharge their function, the capacity of the county manager and limit him as it is intended that he should be limited, simply to implementing the charges that they by their decision on the expenditure programme of the council arrived at.

Mr. Fallon

I should like to make a short contribution on this important Bill. As a member of two local authorities, one of them a large urban authority, it is naturally an area that concerns and interests me. I have wondered for quite a long time — what I say today I probably have said to one of our own Ministers in the past — about the need for this Bill. It has been termed an interim Bill to last two or three years. If you examine the estimate of Westmeath that is prepared by the officials of my county council, you will find that there are items on that estimate which clearly should not be paid for by the ratepayers of County Westmeath. There is a demand for land drainage this year amounting to £267,000, yet this is an area where local councillors have absolutely no control. We asked in regard to the Inny scheme, where and why the money was being spent, and if we could be told anything more about it, but we were ignored. That is unfair to elected members, to the administration of the council and to the ratepayers.

Further down in the estimate there is an item of £97,000 for the upkeep of courthouses. Surely this is a matter for the Department of Justice? We have a figure of £90,000 for the malicious injury code and it is unfair for people in Mullingar to have to pay for a crime committed in Athlone and vice versa. The malicious injury code should be examined. Even if it means increased insurance premiums, the insurance companies should pay the claims that are legitimately covered under various policies, whether it be fire insurance, plate glass insurance or whatever. If I have my plate glass insured and it is broken in a malicious way I should be allowed to claim under my policy and not have to claim from the local authority. This is something that should be explored and examined for the future. It may mean a marginal increase in premiums but it should not be a total charge on the ratepayers.

The demand in the agricultural area is for £156,000 and there is a VEC demand for £45,000, areas which are the responsibility of the Department of Agriculture and the Department of Education. There is a demand for health and public assistances of £243,000. Surely that is the responsibility of the Departments of Health and Social Welfare? There are other areas as other Senators and members of local authorities could mention here. If this position were tackled first, if this whole restructuring and the financing of the local authorities were done now there would be no need for the charges provided for in this Bill. I sincerely believe this is true and while it may take a few years to solve the problem we have had nothing but talk about this problem. We had a White Paper in the early seventies from Deputy Molloy. We had a discussion document from the then Deputy Tully in 1973 and nothing but talk, talk, talk.

The rigid control that is exercised by the Department of the Environment on local authorities is well known and was commented on by Europeans who came to Ireland last week. This was a feature which they could not understand but it is certainly time, once and for all, to appoint a committee representative of the elected members, of county managers and of the Department of the Environment, people who know and understand the local government system, to come up with a blueprint for local government for the future. If that had been done there would be no need for this Bill.

We were discussing the Postal and Telecommunications Services Bill yesterday which is very far-reaching and progressive and doing something enormous for half the civil service, the 30,000 people in the Department of Posts and Telegraphs. Something similar is needed with regard to the local authorities, otherwise the whole system will collapse.

I do not think that this Bill will do very much to help the finances of various local authorities although that is one of its objectives. I cannot understand why the Government at a time of severe economic depression, see fit to put more and more charges on people who cannot afford them. In my own town of Athlone local authority tenants will now be asked to pay the charges referred to in the Bill although they are paying huge rents and huge electricity bills. In effect they have been working for the local authority and for the ESB, in the winter months especially. It is wrong that these people should now be asked to pay for water which has been available free to them all their lives, or to pay for refuse collection. They will find it difficult to pay these charges and in many cases they will not be paid. If a manager estimates it will cost £50 this year for water charges it will cost £60 next year.

We know that has happened in the past in other areas. These people will not be able to pay the money and the small businessman will not be able to pay them. The small businessman, or indeed the large businessman or the large business concern or the family business, are being crucified. They are now to be asked for additional local taxes which they cannot afford. Certainly, the revenue which managers around the country are saying will be collected for these charges will fall very short indeed of the amount required.

I do not disagree in principle with a service charge but it should be at the discretion of the council so that it could be used if they wanted to do extra work above the normal service or daily routine of the local authority. It should be there for that purpose but it should not be at the level which is now being suggested. It is going to do very little, if anything, for the improvement in the role of the local elected member. His powers will certainly be eroded.

Managers are enthusiastic about this Bill because they see it as extra power for them. Senator Cregan argued strongly that the functions of the elected members are still being eroded in this Bill. Rather than increase income, which presumably is the purpose of the Bill, it could have the opposite effect. The various estimates for malicious injury, the courthouses and the health and public assistance and so on, in my county alone come to well over £1 million. If that could be taken off the estimate and if this new blueprint for local government for the future could be implemented immediately we would be well on the way to giving proper power to the elected member and proper financing. He could be his own boss and get away from this rigidity of the central Government that is present at the moment.

In the other House county councillors were referred to as being ignorant and I ask the Minister of State to comment on that statement. From what I know of county councillors they are very much the unpaid servants of the community. They are doing a good day's work in difficult times. I should like to pay tribute to councillors from all parties for the work they do for the community. To suggest that they are ignorant is not fair. Ignorant means destitute of knowledge and while they may not be knowledgeable about every item that comes before them they have a very good practical knowledge of life and of local authorities generally. A Deputy made that comment in the other House because he did not get on too well with one of his county council colleagues but that is no reason to brand every councillor as ignorant. I object to it very strongly.

I have given my reasons why I think there is no need for this Bill. We could have a blueprint and proceed to a Bill which would give proper control and proper financing. That is the answer to the proper financing of the local authorities in future, not this Bill which will not achieve the aim which it sets out to achieve.

Mr. Browne

I should like briefly to take some points that have been mentioned but I will try to avoid spending too long discussing them. I have limited experience of five years on the county council and I have dealt with only one manager. I notice some Senators have difficulty in envisaging what the future role and power of the manager and the county councillors will be. From my experience — maybe we are lucky — our manager seems to listen very carefully to what the councillors say and he gets different viewpoints. He generally seems to accept the will of the councillors. I cannot see any great difficulty if that situation continues. There may be some councillors who do not have good relationships with managers but the manager will always have the difficulty that he is dealing with councillors who are elected and who have to make decisions.

It is easier to make decisions that will be popular. It is easier to keep charges down than to increase charges. Sometimes the manager will be faced with the fact that he may need certain money. I think the water charge is a case in point. For many people there is no choice. They install their own well and their electric pump and £1,000 disappears in a flash. During the winter the frost wrecks the pump; they have to pay for ESB charges and it is a very expensive business, whereas those on public water supplies often get the supply, as I did, for £10. Then it was increased to £20 which was a 100 per cent increase. A 100 per cent increase sounds severe but it depends on what the increase is from. If a person has water for around £20 a year it is almost for nothing but it is difficult to justify that when people are used to paying a very low rate for water. A percentage increase can be made to sound much worse than it is.

The Minister's speech mentioned the question of councils deciding their own rates. I wonder if that can be a hindrance. If one person lives in the midlands and there are water rates for £20 in one adjoining county, £30 in another county and £40 in another county and in some cases £60, which is very consoling when you have to pay only £30, situations are created where jealousy creeps in and questions arise as to efficiency and inefficiency and why one place differs from another. Circumstances vary and rural areas and mountainous areas differ but it would be desirable to be as near as possible to uniformity.

One aspect of local government which has worried me since I was elected is that on average we are on £1 million overdraft. That is bad enough, but we are paying about £200,000 interest. Is there any system that we could devise that would leave us that money with which to do something useful? I have in mind county councils drawing up a plan for a water scheme and having to pay architects and designers and so on in advance. When they produce the goods the money is refunded. A system whereby the Government would pay the council directly in such circumstances would obviate the need for the council to get an overdraft and would save further interest payments.

The statutory demands are a nuisance for county councils. The few people who are still paying rates should be relieved of that burden and another scheme should be devised because if the question of double payment arises they will also be paying a third tax — income tax. People feel they are paying enough income tax apart from paying local rates as well. One advantage of the local rates is that you can see the services you are paying for, whereas you can be paying a high amount of income tax and feel you were getting nothing in return. The provision for waiving the charges has been in operation in Carlow for the last five years. Old age pensioners have been exempt from water rates and so on. I do not see any great problem in that. I am glad it is there.

I was going to say much on the question of roads but Senator Smith is here and I will avoid reminding him of 1977 when we got into trouble. The difficulty about the road situation is that you can postpone things like straigthening out bends and apart from inflation, the cost does not rise, but as the standard of roads has deteriorated because of lack of resurfacing and soon we are getting ourselves into a much bigger debt to repair them. In a place like Carlow where we have the sugar beet factory and heavy lorries, which seem to get bigger every year and the tonnage increases, the roads are being driven over at the worst time and the servicing on them has diminished and so we are likely to get into greater debt because of the cost of bringing them up to the standard we need.

In the debate in the Seanad today the biggest problem seems to be the role of the managers and councillors. I would like to pay my tribute to the latter. Councillors do a very good job. Perhaps I am a little outside the scope of this Bill in suggesting councillors should be paid expenses because they are unpaid public servants who work extremely hard and do what is best. It should not cost them money to provide this service. I ask the Minister to consider this matter.

Mr. Lynch

I agree with the Minister that it is essential that local authorities should have reasonable means of raising revenue. I am aware that the problems facing local authorities at present are enormous and most Members of this House are members of local authorities who realise fully the difficulties facing local authorities in the present year and in the years ahead. We must pay a tribute to local authorities for the manner in which they have achieved a considerable amount of success under severe hardship over the last few years, especially in the eastern region of the country and my county because of heavy snowfalls, costs that they did not foresee occurred but with the resources at their disposal they dealt with the problems adequately.

Year by year we are finding it much harder to provide for maintenance of existing services, not to mention the provision of extra services which are urgently needed and vital to each local authority. I am particularly concerned that each year the local authorities will be victims of a financial shortfall. Will this Bill solve the problem? I do not believe it will. Year by year we are allowing our county roads — and important in an area like north Meath our lane network — to deteriorate to a deplorable state. Nobody in this House or elsewhere will convince me that the hard-line introduction of extra charges will even remotely solve our problem. What is to happen in the coming years? Are we to see a further escalation of these charges? I believe so, and then we will have rates reintroduced.

We are giving powers to county managers to charge for services a community who are already over-laden with taxation. As a member of a local authority I know that we have a duty to provide these services. It is all right to say that we will supply them provided people pay for them, but people maintain that they have more than paid for these services which are becoming totally inadequate. People rightly feel that they are now paying on the double for services which are theirs by right. I have been a member of the local authority in County Meath since 1967. Many householders are now being asked to pay for water. In north Meath the supply and the pressure are very poor but at least we have a scheme on hand there. I would urge the Minister to complete that scheme. In east Meath supply is not there. We are sending out water rate demands to people who telephone back to say that they have no supply. It is not the fault of the county council. The supply is not adequate. We have a scheme in hand there, and I would urge the Minister to complete the schemes that are in the pipeline.

In my county approximately 600 to 700 people are business and commercial rate payers, and a grave anomaly arises. Formerly we had rates across the board and if we introduced charges they would be across the board also, but the rating system is such now that a county like Meath would have about 26,000 householders and 3,500 farmers who are not asked or entitled to pay rates, yet 600 or so business people there are over-taxed and over-burdened. They pay their rate in the £ and yet if we introduce charges they are in duty bound to pay them.

I cite as an example a publican who would probably pay more in water rates than his ordinary rate by way of rateable valuation in the £ if he uses a metered water system to keep the glasses clean. There is an anomaly there and I will probably table an amendment to cater for that. These people should be considered exempt from payment of such rates. I would like to know if that would be the prerogative of the Minister or of the county council. I think it would have to be on a national scale. People in this sector have been pushed a bit too far.

The sliding scale should be reintroduced for all commercial buildings when they are assessed from the date of their valuation. Sometimes commercial buildings are unoccupied and rate demands in respect of them sent to people who have not properly commenced business and are obliged to approach the agencies to supplement their income to pay the rates. I would ask the Minister to have a look at that section.

I fully support Senator Fallon's suggestion that local authorities are loaded with penal claims, for instance malicious injury claims. I understand that the local authorities associations are making representations to the Minister about this. A county can be commercially bankrupted by a spate of malicious injury claims. Take the case in my own county in the past 12 months when we were trying to cope with the everyday provision of facilities and services for the county and were suddenly faced with a spate of malicious injury claims. We are liable for the provision of courthouses and other facilities. Surely the Department involved should be liable. If the Minister is serious, as he seems to be about giving autonomy to the local authorities, then he must see that the Department take their liabilities seriously.

Mr. Lennon

I am sure nearly everything has been said but I want to make a few points. I suppose I am au fait with everything that has happened in relation to the new Bill and the striking of the rates. I think we have created a record in Louth, where we have been striking the rate since January and we finished it last Monday. We struck the rate even if it took us as long as that.

As far as I can see, the Bill gives the councils some powers. We were saying for a long time that we had not got many powers. Unfortunately it has given us the power to raise more money We do not like that, perhaps. We like the power but we do not like to have to ask people for money. Part of the argument in Louth County Council over perhaps the three or four months while we were trying to strike the rate was that people did not want to pay and we could not ask people to pay. We never liked having to ask people to pay and I have never seen the time when people wanted to pay. People are always reluctant to pay. I remember about 20 years ago certain county councillors in Louth County Council walked out when we were increasing the rate by 7d. In the recent three to four months that I have referred to certain county councillors were very much opposed to introducing these new charges and they said in no uncertain manner that the Minister should introduce them.

My attitude then was as it is today, that it would be a matter of indifference to the people who would have to pay whether the Minister, the county manager or the council introduced them. I felt at that time, as I do still, that it would be better if we did it rather than the Minister or the county manager because if there was to be a soft approach it would be perhaps with the county councillors who had to go out and knock on the doors, I am not quite sure when.

Mr. Quinn

Next June.

Mr. Lennon

The Minister says it will be next June.

Mr. Smith

Have a bet.

An Leas-Chathaoirleach

Put the money down now.

Mr. Lennon

It has come as no shock to any county councillor or public representatives that these charges are coming and they are with us, probably to stay, because in about 18 months we had three different Governments and Ministers of all of these Governments reminded us that these charges were coming.

I know, a Leas-Chathaoirligh, that you did not like somebody referring to the document The Way Forward this morning. I was just here in time to hear you express resentment when somebody mentioned it. That is the trouble when you put something in writing. You cannot rub it out. Everybody remembers it and can produce it. It is true that in that document it was clearly stated that charges would be made. Most people fear that the county manager will use power that he has now that he may not have had in the past. I am not too much afraid of this. I certainly was afraid of it for the past few months, perhaps even for the past six weeks when there was a risk that the county council would be abolished and the county manager would be judge and jury and come in with whatever charges he liked when there was no council there to disagree with him. If a county council were abolished for failing to live up to their responsibilities in striking a rate and the county manager had the power to introduce whatever charges he felt were necessary to collect the amount of money that was necessary I would have certain fears because although county managers are all reasonable, decent people and always co-operate to the fullest with the county councillors, they are not answerable to the ratepayers as councillors are. We have to go and knock on the doors. We have to give an account of our movements for four, five or six years as the case may be. We must account to the people for what we do or what we do not do. Perhaps I would be happier if the manager had not so much power. I would say that all county councillors down the years have faced up to their responsibilities and we like to adopt the lowest possible rate. We always came with the minimum rate. We never liked to introduce a higher rate and the people always wanted the lowest possible rate. We have all those problems.

This service charge that we are now introducing may be the thin end of the wedge, as some Senators say here today. Perhaps they are right and next year it may be higher, but all of us are fully conscious of the debt that hangs over the present Government. When we talk about the present Government we talk about the people. We have a debt such as was never experienced in my lifetime anyway. Some people seem to think that this debt is the Government's debt, not theirs. They are wrong because this must be faced up to sometime. When the crunch came somebody had to pay. Unfortunately we are now paying for something that we had for a long time and we thought we had it for nothing. Is anybody suggesting in this House or the other House that if these charges were not introduced — I believe that local authorities have to raise £60 million at the moment — that this should have been collected by tax? We would still have to pay in some way. At least if we are introducing a service charge it is on people who are getting the service. Does the Bill make provision to charge people for a service that they may not be getting? The Minister is shaking his head. I listened in the other House when this was being discussed and some Member raised the question that if there were households 15 in a street with a water service and ten were availing of it and the other five were not whether the county manager would have power to charge all 15 for the service.

Mr. Quinn

If they all had piped water they would all be liable.

Mr. Lennon

Is that so if it goes into the house?

Mr. Quinn

If they do not use it that is their affair but they get the service.

Mr. Lennon

Is that the case if it is laid along the street?

Mr. Quinn

No, if it is connected to each house.

Mr. Lennon

If it is connected they are availing of the service. I was referring really to five people who had their own pumps and were not availing of the service as such although it was provided along that street. Over the three or four months when we were striking this rate people have asked me where the service is being laid along the road. Be it sewerage or water, they are asking, "If I do not take that water and I continue to use my own private supply and my own private septic tank will I have to pay that charge?" I took it on myself to tell them that this is a service charge for people who pay only for a service they are getting. I hope I am right still. The Minister is not quite clear at the moment on it.

Mr. Smith

You might have an extra year to make up the ground.

Mr. Lennon

I do not think any councillor would object to that. There are fears in other people's minds — not particularly in mine although it would not at all surprise me if it did happen — because we are told that this year we must raise approximately £60 million. Some people fear that next year it might be more and I suppose that as things are going it could be a little more, but most people realise that the days of getting something for nothing are over. I can understand the Members on the opposite side of the House kicking up dust about this because every political party in Opposition must get as much mileage as they can out of a Bill.

Mrs. Honan

Not dust, facts.

Mr. Lennon

We are not quite sure of the facts yet. I have never in my political life seen a situation in which all parties agree no matter what Bill was coming. We will always find some differences.

Mr. Lanigan

If they are facts they must be true.

Mr. Lennon

For that reason I appeal to Senators across the floor from Louth County Council to forget the past and look to the future with a debt hanging over our heads which is crippling the country and which must be paid. There is, of course, the problem of the collection of this debt. I hope that the Minister through his county managers or the councils will see an easy way of collecting this money, whether in rents or by some other system. People in many housing estates who are asked to pay a service charge cannot pay it all at the one time. I would hope that this money could be collected from them perhaps through their weekly rent. That would, perhaps, be acceptable.

Over my 20 years or so in public life the services we are referring to were sought by everybody. People in areas where such services did not exist were always envious of those who had a refuse collection service, water or whatever, and councillors were being approached about them. I am sure every Senator here today who is a councillor has had the same experience. People thought for a long time that they would not have to pay for these services. If these services are not introduced — as the county manager rightly pointed out to us last Monday — these services will have to be cut off. They would have to do without a refuse collection and perhaps many other services which people are not prepared to relinquish. People have got the services and they are prepared to pay for them.

I have no hesitation in saying — having worked as a county councillor for many years — that the amount of time spent by county councillors from January to December at the work they are elected to do is tremendous.

I should like to congratulate the Minister who a short time after he was elected came to our council. Being a member of a local authority he realised the work we were doing. Rarely do we have a Minister who has been a member of a local authority. They do not realise the amount of work that is done for so little by those people. If there was a little more compensation for those people perhaps some of them might do greater work. It may be that because of their financial position they are not able to devote as much time as they would like to this work. The Minister, or the Government, should give them some type of compensation adequately to compensate them for the amount of time they spend on these duties.

A case has been made by other Senators about the poorer people who cannot afford to pay. The county manager has always decided on such cases in the past. Many more will be involved now and I would like to see consultation between the Minister and county managers on this issue. If this is to be done at the discretion of the managers I have no doubt they will do their job in the future as well as they did it in the past.

We will all have to face up to this. There is no doubt that we do not like any new charges being brought forward. Mention has been made about the situation in relation to the farming community and that some farmers in County Wexford decided to go to the courts where it was decided that the poor law valuation system was unconstitutional. That is the reason they are not paying rates. This was one of the greatest ways of collecting rates in the past. We can call the new charges rates or services charges, it does not matter much to the people who will be paying, it is money. In certain counties many people in the farming community were quite prepared to pay the rates and have always done so. It is a great loss in revenue to county councils. There was not a great reluctance about paying them although they did not like certain aspects of the system. It did not apply to all the farmers. If one looked at the record of payment by the farming community one would see that at the end of the year in every county there was a 99 per cent or 100 per cent collection.

The question of small businesses was mentioned by Senator Fallon. Coming from a Border county which is going through a fairly rough time at the moment I must stress that something should be done for the small businesses there. We would not like to think that there would be a double charge on those people. They are finding it difficult to pay the increased rates this year and finding it difficult to exist.

I am glad the Minister said this was a temporary measure and he hoped to review it in a couple of years. I have no doubt he will be reminded of that by Members on all sides. At least the Minister is giving a commitment at this stage. I appreciate the great interest of the Minister and the Minister of State in local authorities and I believe they will certainly come forward if there are problems in the near future in relation to services charges or any other problems to help us out. I wish the Minister every success in his new job.

Mr. Lanigan

I am not going to delay the House very long on this Bill which is couched in language which would suggest that we are giving back to local authorities the power to levy charges and control their own destiny. In fact, when we boil it down the Minister is giving to the county manager the legal right to levy charges and collect them. The Minister in his speech stated that it was because of financial mismanagement that there was now a deficit of £43 million by the local authorities. In fact, much of that is made up by virtue of the fact that there has been a shortfall in domestic relief and in agricultural rates relief and also by virtue of the fact that in every county there is the situation because of a decision of the courts that rates on agricultural land have not been paid. The situation there is that the money due to county councils will have to be paid by somebody.

If the Supreme Court decides that the farmers have to pay, the local authorities will get this money but if the court decision is that the imposition of rates in the first place was unconstitutional the Government will have to pay. Therefore, this figure of £43 million is a red herring. It should not have been in the speech because it has nothing to do with the deterioration in the councils' finances. That has not taken place because of any deterioration in management at local authority level but because of circumstances such as the court decision and the fact that in every county there has been a shortfall in the domestic rate grant and the agricultural rate grant. Allied to that what was said by Senator Fallon must be taken into account. There are levies on local authorities which have nothing to do with those bodies and over which they have no control. The collective debit balance is made up because of many factors which are outside the control of the local authorities. The fact that local authorities have to pay for courthouses is ludicrous in this day and age. The Department of Justice should pay for the maintenance of courthouses. Why do local authorities have to give a subvention to the VEC and health boards when, in fact, they have no control over what spending is done by the VEC, health boards or the Department of Justice? In the end local authorities have to pay for these things.

The finances of local authorities are being affected at present by virtue of the fact that VAT is levied on supplies to them at 23 per cent or 35 per cent as the case may be. That money is paid by the local authority to the Department of Finance and does not come back. Therefore, the Department of Finance are getting from the local authorities the VAT that must be paid to suppliers for materials and everything that is bought for county council operations. The peculiar thing about that is that if the county council buy a load of tarmac to spread on a road they pay 23 per cent VAT but if they get in a contractor to do the job the contractor has only to pay 5 per cent VAT. The situation is ludicrous when one gets down to financing local authorities.

I am a member of a corporation and a county council and this year we have had the most acrimonious discussions since I was first elected and they have arisen by virtue of the fact that we have had an increase in rates and now charges are being brought in. I have never seen at local authority level any inhibitions on the part of county councillors to charge whatever was needed to run the county or corporation area efficiently. This year the element of proper spending by the council and the corporation has been taken away from us. We have, at the same time, an increase in rates to business people who at this stage, whether they are small or big, cannot afford an increase in taxation of any nature. Anybody in business must pay a penal tax on employment of 11.61 per cent and an increase in rates. In the case of local authority houses in urban areas water and sewerage charges were built into the rent tenants paid but we are now going away from that system and imposing charges. The rent that any tenant pays includes a charge for water and sewerage.

Another anomaly is coming up. The rents on public authority houses in general are based on the wages and salaries of the occupants. There are very few houses which are not on the differential rent system but now, irrespective of the rent the person is paying on the house rigid water charges will be imposed. On a percentage basis, the person who is on a low wage will have to pay a high water charge. That is not sustainable because it is affecting those who can least afford to pay. I wonder what the Minister will do if somebody in a housing scheme refuses to pay water charges. Are we going to have people going around the country cutting off the supply of water to houses if people cannot afford to pay or will not pay? With regard to commercial properties, not alone are people being asked to pay increased rates but they are being asked to pay increased charges also.

Taxation here is at a level that is not sustainable. It is at a level, whether it is in the PAYE sector, the self-employed or the business community, which the community cannot afford to pay. Of course, the Government through the Department of the Environment will get extra taxation from people. This is exactly what the Bill is about, the imposition of extra taxation. To say that county councillors, corporation members or urban councillors have the power but that ultimately it is the county manager who sanctions is a fallacy. The truth is that the county manager has now got the power.

I do not think the suggestion that county councils should set up estimates committees governed by guidelines issued by the Minister is sustainable. For as long as I have been a member of a local authority the estimates have been gone through in greater detail than the Estimates for central Government are gone through. Each item and section of the estimates for the forthcoming year are gone through by the councillors. The degree of questioning that takes place is something that could well be brought into central Government finances. It is only in that way that we will get a reasonable level of service from the people who have to produce the Estimates. I do not think that at Government level there is the same degree of accountability that there is at local level when it comes to the investigation of where money is going.

There is the suggestion in the Bill that within county councils there is a group of people who do not know what they are at and need guidance from above. When dealing with finance the matter should be reversed, local councillors could give a lot more than advice. They do a better job when dealing with their finances than is done at Government level. The Bill is fraudulent in the sense that it seems to give back powers to local authorities which it does not. It is equally fraudulent in the sense that it is suggested that there is a dereliction of duty by local councillors in the way they deal with their finances. For that reason, I do not feel the Bill should be supported.

Mr. Burke

I am glad to have the opportunity to give support to this Bill. I welcome it as a genuine effort by the Minister to give back to local authorities the power to raise local finance which will restore to them some of the autonomy that was taken from them as a result of the 1978 Act. The fact that rates were abolished at the time was widely acclaimed by the Fianna Fáil Party who saw political expediency in it. It is unfortunate that we have since regretted that. Most county councils and local authorities throughout the country have progressively gone into a situation where they are now on the point of bankruptcy.

My county council in Galway is at that point at present. Were it not for the fact that we came in a deputation to the Department of the Environment, as probably every other local authority in the country have done, and met a very receptive Minister and officials of the Department, who gave undertakings that that will not happen, we would now find ourselves in a straitjacket. As a result of this Bill, there is a small bit of light at the end of the tunnel inasmuch as not only local authority members but also the public will be slightly elated because they will get services which they pay for. For the first time, most authorities were toying with the idea that they were going to have extensive lay-offs and cutbacks in services far in excess of what they have had over the last few years. The whole local authority system was grinding to a halt.

It ill behoves the Members across the House to complain that now we are introducing rates by the back door. They are pressing the alarm bells working on the general public outside to accept it as rates by the back door. This is not the case. If it is examined it will be seen that the people who have the services will pay for them and that rates, which have proved to be an inequitable measure of taxation in the past, are gone. Everybody, regardless of income or ability to pay, had to pay. I welcome the Bill in so far as it asks people who benefit from the service to pay. I would like to set the record straight with regard to the Fianna Fáil claims that it is rates by the back door.

I wish to make a few short points with regard to special items in the Bill. One is the question, which has been mentioned by Senator Howard, of duplication of charges with regard to small businesses. I urge the Minister to reconsider that whole system. The other point is with regard to planning charges. Under this Bill charges are put on planning applications but also — this is of particular importance in some cases, and one such has arisen in my own county in the very recent past — local authorities have, as well as the charge, the ability to build in as a condition of that planning permission the right to demand service costs from the applicant before the planning permission is granted.

I ask the Minister to investigate the impasse that has arisen in County Galway where the Galway county manager has served an injunction on Bord na Móna, a semi-State body, who he claims were flouting the law. He made a charge as a condition of the planning permission of £300,000 on that semi-State body so that necessary road improvements could be undertaken before work on the briquette factory at Ballyforan was allowed to continue. From a local authority point of view it is a very serious situation when a semi-State body flout our planning laws. At the same time a very serious situation has arisen where demands like that can be placed on a semi-State or private body who applied for planning permission for an industry in a suitable location. Such opportunities for industry in the west are few and such development should not be hindered or postponed in any way as a result of this charge. I ask the Minister to investigate this kind of situation so that this case will be settled very quickly and so that the job of construction, leading to eventual production, can start immediately.

I would like to raise the whole question of whether this is a way by which local authorities are expected to become self-sufficient in regard to financing in the future. I could see there a great danger which might arise where the limited resources that might be available to a local authority might not be available in other areas. I particularly mention the regional imbalance that exists in a county so large as County Galway where by and large the area east of Galway city would be the richer part of the county under the rates system in the past and the western area of Connemara might be without rates. As a result of the charging of rates, or the imposition of taxes of any kind, the income would not be there within the local authority in general to finance basic services and to maintain the roads in the area.

As a result of this regional disparity I ask the Minister to investigate not only the local authority contribution but the Government's contribution so that the maintenance of services in the isolated and more disadvantaged areas within the county may be kept going. I would also like to know what contribution Roinn na Gaeltachta can make towards the development of these areas within the local authority structure. Údarás na Gaeltachta at present claim that they have jurisdiction in various ways and make demands on local authorities for services to industries being located in the area. That is a great demand in areas that have not even the basic foundations of any services. It is not only in regard to local authority services but also the whole infrastructure that is at a very early stage there.

Demands usually fall first and foremost on the local authority to provide basic water and sewerage facilities to industrial centres that might develop. I ask the Minister to make sure that as a result of the levying of charges by certain local authorities block grants coming from the Government will recognise the inability of many local authorities to have comparative income of their own relative to the great urban areas that have rates coming from business premises, factories and so on. It is in regard to the imbalance that is of great importance to the poorer authorities that I would like to see a guarantee for the future.

Will the Minister investigate the possibility, with regard to charges that have been implemented in relation to planning, of alleviating the hardship experienced by community groups who are providing facilities in certain areas where they are not otherwise provided but who, through their initiative and voluntary work, have provided such things as community centres, parks, car parks and other facilities for general recreation for which it is now necessary to have planning permission? At the same time they are charged the same rate. I would be grateful if the Minister would see his way to alleviating as quickly as possible the charges demanded by the local authorities for planning permission in the first instance before ever the facility gets off the ground. I am glad that the Minister has incorporated into the Bill the waiver in regard to charges in certain hardship cases. It is a sign that the Minister and the Department are human, that they see a humanitarian element within the whole structure and we can see that Departments which have been very glibly referred to in the past as faceless individuals are now given that recognition.

An Cathaoirleach

There is a division in the Dáil. My information is that there will be a number of divisions during the rest of the evening.

Mr. O'Leary

We should carry on. We have no objection to carrying on.

An Cathaoirleach

What will we do then? The Minister can reply on Tuesday morning to the Second Stage if he is unable to get back in.

Mr. O'Leary

We can consider the matter.

Mr. Quinn

I will come back after the division.

Mr. W. Ryan

It is about time that some arrangement was made. It was brought up time and time again that there should be some arrangement that when a Minister is in this House he should be paired. If he was out of the country, in Brussels or anywhere else, he would be paired automatically. This House is as important as any of those places.

An Cathaoirleach

I have already taken that up with the Ceann Comhairle of the Dáil, and somebody else, in writing, pointing out the situation and asking for this to be done.

Mr. W. Ryan

Today takes the biscuit.

Mr. O'Leary

I believe all sides of the House would like to agree with what Senator Ryan has said. We should ask the Committee on Procedure and Privileges to have another look at it and to hear a report from the Cathaoirleach on what has been done.

An Cathaoirleach

I wrote the other day about it and I could not have a reply yet. I believe I am the first Cathaoirleach to take the matter up. The Senators are pushing an open door as far as I am concerned.

Mr. O'Leary

I appreciate that. We are not speaking to you because we appreciate your constitutional position. It is a matter essentially for the Government and the Opposition in the other House. We have to put on the pressure there, on both sides, to ensure that this will happen because it is ridiculous.

An Cathaoirleach

I should have a reply next week and I will take it to the Committee on Procedure and Privileges.

Mr. W. Ryan

Could we do something at this late stage? We want to try to get over the Second Stage of the Bill this evening but if there are to be divisions like this we cannot. If the Cathaoirleach went with me to the two Whips at this stage could we get them to agree to let the Minister be paired?

Mr. O'Leary

Could I be helpful to Senator Ryan in that regard? The temperature in the other House at present would not be conducive to arriving at that agreement today.

Mrs. Honan

That is what I was trying to do a few moments ago because the Minister at the last division became aware that there would be several divisions. He was trying to help us to get it over before this next vote. It just did not work out.

An Cathaoirleach

We will carry on.

Mr. Burke

I welcome the waiver in regard to rates at local level, where the local knowledge is. The Minister will provide guidelines for the local authorities so that they can attend to demands for waiving these charges. A speaker across the House mentioned the charges on local authority tenants. I ask the Minister to investigate the possibility of having the charges incorporated into the weekly rent of such tenants so that there will be no great burden for the services from which they benefit as well as all other citizens who have those facilities. If there is a case of hardship these people will have the opportunity, like all others, to come within the guidelines set out by the Minister. If they do not and the charges are incorporated within the general level of the weekly rent there will be no great excessive demand because it will be set out on a yearly basis.

I also urge the Minister in this time of crisis in local authorities to give further consideration to giving the block grant to various county councils for emergency work in the councils. It is strange that various local authorities are forced to continue with such unnecessary immediate work such as hard shoulders along national primary routes while county roads and second-class roads are left in a continually deteriorating condition. Very often they are in a very dangerous condition. Hundreds of thousands of pounds are expended on the hard shoulders on national primary routes while other roads are deteriorating even futher. I ask the Minister to investigate the possibility of allowing flexibility in this time of great stringency within the councils when finances are scarce. The managers and the councils should be allowed to divert finance to maintain employment and to carry out work on roads that are in a dangerous condition.

I would also like to ask the Minister to reconsider the question of a charge for fire services where individuals or others who call on the fire services will be charged some set charge in the future. I consider that dangerous in so far as that the public safety of many people is involved in the case of a fire in an individual's place or premises. It should be seen as a public service rather than an individual service. I would ask the Minister to investigate the possibility of revoking that charge at the earliest possible opportunity.

The question that has been raised here throughout the whole debate has been that of the power of the county managers to override the wishes of local authority members. There is a danger in some instances that some individuals may see here an opportunity to impose their wishes as opposed to those of the local authority members. I would like the Minister to make some arrangement whereby local authority members who find themselves saddled with such a situation will have some recourse to the Department or to some intermediate body so that agreement can be reached outside the local authority, when agreement cannot be reached within it.

As somebody on the other side of the House said this afternoon, county mangagers were particularly enthusiastic about this Bill. I can see them being enthusiastic in the light that it is an effort to bring back the local authorities from the verge of bankruptcy. It is a question of managerial function within the counties and how various managers work to the best of their ability under very stringent control. At the same time it is also necessary to make sure that there is a safety valve there in a situation where the local authority members unanimously agree that certain charges should be made and where managers do not adhere to that.

I welcome the Bill in so far as it is a first effort in a very short time in office by this Minister to bring back to local authorities some small power. I hope it is only the first of many steps in the future when local authorities will get back the authority and esteem they had in the past. At the moment councils are only talking shops, with no authority or control. I welcome the Bill in so far as it is the first step towards throwing off the shackles of central Government on local authority and on local authority members. In the future, I hope we can meet the demands that will be made on us. The Minister has restored some of the power to the authorities and hopefully this is the first step in restoring the autonomy they had in the past.

An Cathaoirleach

Will we continue without the Minister?

Mr. O'Leary

I am quite happy to do so. I would like to take this opportunity of putting on record a few of my thoughts about the Local Government (Financial Provisions) (No. 2) Bill. Those of us, like Senator Eoin Ryan and myself, who have been in the House all day will no doubt have been greatly moved by the eloquence of the Members of the House who also are members of local authorities. Any Bill which comes before this House which is entitled a local government Bill is sure of a searching examination because of the close ties which exist between the members of the local authorities on the one hand and membership of this House on the other. This arises, of course, not only by reason of the peculiar system of election which we have but also by reason of the dual membership of many Members.

I am in a rather different position from most other Members in that I was for ten years a member of a local authority and left it in 1977 before I had the honour of being nominated to the Seanad for the first time. Drawing on that experience of ten years, even though it is now five years out of date, and the continued interest that I have taken in local government since that, I would like to put some of my thoughts on record. It would be nice to have the Minister here but I well understand the position. I think it is important that the Second Stage of this Bill should be completed this evening. I think in general that the objective of the Bill is to be widely welcomed and for that reason the Minister can be assured that the Second Stage of this Bill will have the enthusiastic support of the people on this side of the House who are members of the Fine Gael Party. That is not to say that we are not critical of many parts of the Bill and I will deal with those criticisms at a later stage.

We were greatly enlightened during the course of the day by the contribution of Senator O'Donoghue who analysed the situation with regard to the position that has existed since the first move to abolish domestic rates in 1973 and traced the history of the movement from that on, encompassing as it did membership of both political parties and culminating in the abolition of domestic rates subsequent to the 1977 general election. I thought his analysis of the situation was good. I thought his suggested way forward for the future and his analysis of the block grant situation at least had the benefit of his having thought about the problem and analysed the problem and he should be congratulated on that. I was disappointed that Senator Honan criticised, or appeared to criticise him, for the manner of his analysis because an analysis like that should not be dismissed as being just woolly thinking or theoretical nonsense or anything like that. It should be encouraged because it is one of the functions of the House to examine how we can improve the approach towards public life in the relatively calm atmosphere which normally prevails in this House. Senator O'Donoghue should be congratulated on his excellent contribution which we should read carefully.

The Minister in his introductory statement made a number of points. He noted the deterioration in local authority finances since 1978 and he contrasted the increase in the rate poundage of 73 per cent with the increase in the cost of living in the same period of 102 per cent as if this was a significant comparison. It is not a significant comparison at all. I do not see anything wrong with the rate in the £ increasing by only 73 per cent when the cost of living increased by 102 per cent. On the surface that would appear to show an organisation which was improving in efficiency and giving better value for money. The Minister touched on but did not emphasise the fact that this was achieved by changing the balance from a credit balance of £5.8 million to a debit balance £43 million. What the Minister should have enlightened us on was what the increase in expenditure was during that period. I suggest that the increase in expenditure in local authorities in that period was in excess of the increase in the cost of living. Therein lies the problem not only in regard to local authority finances but with regard to finance in the country.

There has been little or no attempt to restrain the unrestricted growth of public expenditure in this country. I do not see anything in this Bill or anything in the charges which are suggested may be imposed as a result of its passing which will curb that. We should not confuse two things and it is important that the Government get this message clearly. They should not confuse cutting expenditure with the alternative method of solving our financial problems which is increasing the range and rate of charges.

Increasing the range and rate of charges is not solving our problem. Our problem is that too high a percentage of our gross national product is being spent by the State. It is true to say that too much of it is being spent in the wrong way and that would be a better way of saying it. We do not require more imaginative ways of extracting more money from people but more imaginative ways of extracting less money from people, and spending the money in a more just and meaningful way. In so far as that it represents another alternative method of extracting money from the unfortunate citizen it represents a failure of government in general. That is something we should try to emphasise.

In future if charges such as these have to be imposed, it should be against the background that the imposition of charges like these will enable the reduction of other levels of taxation elsewhere. As a result of the chronic state of our country's finances, the reasons for which we need not go into but are well known to Members of this House, these charges will unfortunately be additional burdens on people. I say this as someone who supports these charges. I believe, contrary to the policy of my own political party, that it was a mistake to abolish domestic rates. The system could have been reformed so as to make a meaningful contribution both to revenue rating and social justice.

The Minister made a favourable comparison from the rural point of view of the different benefits which the rural and urban populations have got as a result of the adoption of the system of local government finances since 1978. Other Senators have mentioned that urban authorities are subjected to their own individual extra charges. There is a charge which county borough councils have to impose towards supplementary welfare. That does not apply in the county. There are various other charges as well. There are very significant charges in the city in which I had the honour to be a member of its council and to be its Lord Mayor. They were in respect of the extension of the city boundary which did not apply to county councils. That additional charge to an urban area is ridiculous and has no basis. It is not true to say that the people in the urban area have been subsidised by people in the rural area. I do not think that is right.

On the provision of services in rural areas, the contrasting styles of the various speakers were interesting to examine. Senator O'Donoghue on the one hand pointed out quite clearly that the provision of services in remote areas has been an expensive lesson as far as this country is concerned. While he was doing so he received indications of approval from Senator Ferris. When Senator Ferris spoke he boasted — and I could not call it anything else — that they had supplied water through the length and breadth of the Tipperary County Council area. He was boasting about the fact that they had done precisely what Senator O'Donoghue said they should not have done, that they should have concentrated their expenditure in the urban areas and encouraged people by the proper use of planning permission to build their dwellings in those areas. That is the lack of a complete political philosophy. Our approach to these things is that we do not have a complete political philosophy. On the one hand we are saying we are in favour of the concentration of resources but we are not in favour of it in respect of our own county. We thing our own county should be an exception to the rule. It should get all the facilities which are so expensive to provide.

This Bill does not tackle the problem of planning permissions and I regret that. It is not a question of the abuse of planning permissions but the granting of planning permissions in remote places. As other speakers have said, following on the granting of these planning permissions, whether it is as a result of the council's decision, of the manager's decision, or of planning appeal board or as a result of the Minister, tremendous pressure has built up for the provision of services in these out of the way places. As a result of that, the general level of expenses to be met by local authorities has grown enormously. This is a lack of a planned approach towards our country and the abandonment of the concept of central planning as it deals with physical structural matters.

I am glad the Minister is back in the House to hear the next point I am going to make. Having been so kind to him in his absence, I can now be unkind to him when he has arrived in the House. The Minister should take back this Bill and seriously examine the question of who should have the ultimate power to impose the charges. I speak as someone who enthusiastically supports the concept of charges. I am not speaking as a person who supports it merely peripherally or a person who supports it because it is necessary. It is right that there should be charges of this kind. We are not treating local authority members as mature people. As a member for ten years of a local authority under the control of any number of groups and coalition of groups because the power changed within the local authority many times, I always found that the control was exercised in a reasonable fashion and faced with the problem on the last day of having to make a decision as to where they were going to get money the councillors made a sensible decision. I have no doubt that they will continue to do that.

What has happened is that after 1978 and because, as Senator O'Donoghue said, the financial provisions of 1978 were only introduced as a stop-gap measure, and he admitted that, the responsibility has been drained away from the members of local authorities. They have become almost like children in so far as their control of financial matters is concerned and if you treat people like children they will respond accordingly. They have responded accordingly. That is why you have them unable or unwilling to face the question of the imposition of these charges.

I accept that, faced with the problem which the Minister had, he had to ensure that the charges would stick this year. If the Minister said that it was the manager's job to determine the level of charges this year I would go along with that because I think it might be necessary in the short-term. But I can see no reason why the Minister cannot re-examine the problem now. He said he was going to examine it in two years time and include a new clause in this Bill on Committee Stage which will have the effect of making the level of charges a reserved function at the expiry of a two or three-year period. Until the thing has settled down and the charges have been established, let the manager accept the responsibility in the initial stages and from then on let the councillors accept the responsibility. If you do that the councillors will respond, irrespective of the political party to which they have allegiance and irrespective of whether that political party are in power. I have found that councillors do not act in support of a Government for a political reason only. They only support policies which they agree with and if their own party happen to be in Government and they disagree with the policy they are quite willing to say that at local level. I think that is very important and I appeal to the Minister to have a look at it because it is most important.

The Fine Gael Party which I have the honour to represent have proportionately a very strong say in local authorities and have had for the past ten years, in proportion to their normal strength in the country. We have had a fairly strong representation consistently in Seanad Éireann for that reason. The members of my party are, by and large, of the view which I have expressed, that you must give responsibility to local authority members and they will respond if you trust them. They will respond and behave like the adult intelligent men and women they are. Let us go back to the situation we had pre-1977, when you trust them to set the level of charges. Even though these are not rates they are more akin to rates than they are to the level of charges which existed up to this. As I understand it, the determination of the level of charges in respect of water and the level of charges in respect of other things up to this was the responsibility of the manger but the determination of the level of the rates was the responsibility of councillors. We have moved beyond the threshold of the charges being incidental charges. Any charge that will apply to such a large proportion of the ratepayers of a county area should be determined by the members of local authority and not by the officials.

The last point I would like to refer to is in section 9 of the Bill. This is about the grant to rating authorities. It is a good idea and it is better than the previous one. We can only see how it will work in practice when it actually works but I think it would have my support. The Minister should consider, in exercising his discretion in this, the type of local authority with which he is dealing. It is fair for me to say, and I am being political here, that there exists a number of local authorities in this country who are not taking their responsibilities with regard to representing the people seriously enough. There exist a group of local authorities who are freezing out up to 50 per cent of the membership of the local authority from responsibility within that local authority. A group of local authorities exist in this country who refuse to allow those who are not members of the majority party their proper share of sub-committees. They should be looked upon with less favour than other local authorities. The Minister should seriously consider using section 9 in this way.

It is wrong that there is a series of authorities down the western seaboard who are not behaving in a democratic fashion and who are freezing out members. I am not saying whether they are controlled by Fianna Fáil or Fine Gael because from time to time they are controlled by both. That is not good enough. All members of local authorities are entitled to fair representation on the sub-committees in exercising the powers which have been devolved on these sub-committees by statute of the Oireachtas.

With those points I would like to welcome the Bill. I would like to congratulate the Minister on starting the immense job which he has of reconstructing the whole area of local government, on reconstructing the financial basis on which we operate. I would like to commend to the consideration of the House the very salient points made by Senator O'Donoghue in his contribution this morning. Above all, I would like to ask the Minister to go back and see whether there is anything he can do within the framework of this Bill to ensure democratic control on the level of charges which arises in respect of section 2 of this Bill, to see if it can be written into the Act as it will be, that it would automatically revert to the members of local authority while allowing for a transition period. I accept the necessity for that transition period. I welcome the Bill and it will have the enthusiastic support of the Fine Gael Members in the House.

Mr. J. Higgins

I will be very brief because I know there is an anxiety on the part of everybody to get away from here and a particular anxiety on the part of the Minister of State to get the Second Stage concluded this evening. I would like to express my gratitude to the Minister for taking the Bill because I am aware from a contribution he made to Mayo County Council, where he did us an honour by visiting us last week, that he has a particular knowledge and insight into the gymnastics and the workings and the vast internal conglomeration that is part and parcel of the local government scene.

I have been a member of the local authority since 1979. I have sat through four series of estimates meetings and I have listened to the gripe that commenced in 1978, but which has accelerated since then, that there has been a gradual and indeed in some cases an accelerated diminution of the powers of local authority members. I welcome this Bill as giving back, restoring somewhat, some degree of political financial autonomy to local authorities.

I agree that in 1978 it was unfortunate that with one sweep of the pen the power to exercise the overall right as to what level of rate and on whom rates should be levied was withdrawn from local authority members. I agree with the observation of Senator Smith that we were in the process of dismantling the rate system but we were not doing it in one sweep. We were doing it as a gradual process over a period of years when, in fact, we removed the health charges. The money, therefore, had to be found automatically in one massive grant or funding from the Exchequer. I agree that it was a stop-gap effort and in that respect, therefore, I welcome this Bill.

The Bill is an enabling Bill in that it enables local authorities to exercise the discretion to charge for services they have supplied. I do not think it is a fraudulent Bill as has been alleged from the other side of the House. We should first of all look at the principle of charges. It is gradually dawning on people, although more slowly on the Opposition, that the good old days are over and that it is ludicrous to go on believing that we can continue providing a whole vast array of vital, expensive services without changing for them. I have grave reservations about the principle of providing goods and services free, except in the case of the elderly, handicapped and the disabled.

The attaching of the label "free" to so many things has added to a certain degree to a general breakdown and disrespect for public things. I include public representatives in that as well. In addition to the general reduction of the level of respect for services and public things it has also added enormously to our financial burden. I should much prefer to see somebody who could not afford something given the wherewithal to purchase or provide it rather than giving it out free.

It is the intention in the Bill that each county council are to decide on the global amount to be raised. That is a considerable power and while I agree it is an executive function of the county manager to decide on the mechanics and the levying of it, nevertheless to vest in a local authority the power to determine the overall amount that is to be raised is a power I welcome. I welcome also the commitment by the Minister that there will be a review after two years. It is a good idea for the first two years to give this power to the county manager to allow him with his expertise, his professionalism and his training, to show the way to the local authority members so if at some stage it is decided by the Minister to divest the county manager of the power local authority members will have adequate headlines set for them. One of the fears of the Opposition and of opponents of the Bill is that local authority members may pitch the charges too high. I do not think that this allegation could be fairly levelled at local authority members in the past when they had discretionary rights to strike an arbitrary rate on domestic dwellings.

How can we expect to have new roads built, existing roads improved and to have road services retained at a satisfactory level unless we get the money in? You cannot have an expanded refuse collection service to meet the requirements of growing suburban areas or connurbations unless more money is provided. Fire fighting services, water and sewerage are not fuelled and maintained by fresh air; it takes increasing amounts of money to finance the growing demand for these facilities. People are becoming more expectant about the level of services. I know many people in rural areas who have not got those services and who would gladly pay the levy anticipated in this Bill if it could be guaranteed that the services would result therefrom.

One of the underlying themes of the Opposition seems to be that these services should continue to be funded from the direct grant from central Government, but where is the Government going to get the money? This is the key factor. There is only one place that it can come from. From additional taxation, and where does additional taxation come from? From the PAYE sector, PRSI, from further levies etc. Nobody wants to see that happen. I know many colourful words have been used about this Bill in this House and in the other House, words such as "penal" and "punitive". The level of water charge that we are applying in County Mayo this year cannot be described as being either penal or punitive. The amount involved is £45. The production cost in County Mayo of 1,000 gallons of water is £1.2p; the average consumption of water is 60 gallons per head per day; the average number of people per household is four; therefore, the overall consumption per house is 240 gallons. That means they are getting £105 worth of water for a charge of £45. The point was made by Senator O'Donoghue that these charges should be related to the cost. In this case it compares most favourably and they are getting double the return for their money.

A great fear has also been expressed that if we impose charges for refuse collection services it will lead to indiscriminate dumping. I agree that this will happen occasionally and that everybody will not conform but there are laws, if properly applied, to deal with this also. I do not think in the ultimate analysis that the vast majority of citizens will resort to indiscriminate dumping because of an imposition of 50p per week.

I should like an assurance from the Minister in one regard because it is believed that certain people are going to be asked to pay for services that they will not receive. This would be most unfair. People in rural areas who have to provide their own sewage disposal methods, such as septic tanks etc., cannot be expected to pay a sewerage charge in this case. I do not think any court would be likely to issue a decree in such a case either. People who are not receiving these services would welcome the opportunity of paying these charges if they could have some commitment that the services would be provided.

One of the main criticisms that has been echoed time and time again in this House and in the other House is in regard to giving the executive function to the county manager. I can also see a situation arising that in certain local authority areas where an Opposition party have a majority, they could impede the imposition of charges, which would lead to total chaos.

I welcome the commitment by the Minister that after two years he will have a thorough reappraisal of the position. I hope in that period we will have taken the guidelines and the headlines from the county manager with whom the vast majority of local authorities have excellent relationships, that we will be given sufficient credit at that stage and that the Minister will have sufficient confidence in us to allow us the discretion to decide individual charges ourselves.

I welcome the Bill. I know the Minister has a thorough knowledge of the nittygritty that is part and parcel of local authority make-up and I trust that when we come back in two years' time to reappraise this Bill we will have seen it as wise, good, judicious and practical legislation that will have worked and that will not have earned the slurs that have been cast on it.

Minister of State at the Department of the Environment (Mr. Quinn)

I wish to thank Senators for their co-operation today and by way of reply I will take all the contributions briefly in sequence. I thank Senator Smith who led for the Opposition for his contructive contribution to this debate. He set a tone that permeated the entire debate.

All the Members of this House who have a direct or indirect relationship with local authorities, but particularly those Members who have been or are currently members of local authorities, are quite well aware of the difficulties facing local authorities in the question of finance. Senator Smith referred to it initially and Senator O'Donoghue gave it substance. The abolition of domestic rates in 1977 was not specifically the problem. All political parties were in favour of their abolition. The specific problem that resulted in the difficulties now being experienced by local authorities was the way in which the local government financial provisions legislation was introduced in 1978. In fairness to that administration, as we heard from Senator O'Donoghue, it was seen by them as an interim measure when there had to be, obviously, protection for central Exchequer funds with the ceiling on rate poundage. As it operated it was envisaged, according to his contribution, that it would be an interim measure pending the restructuring of the entire basis of local authority finance.

I welcomed the tone of his speech, what Senator Smith had to say and indeed what all the Senators said about the Bill being an interim measure on the road to providing the correct basis for local authority finance.

I want to repeat the assurance the Minister gave to the other House, and which I gave on his behalf and that of the Government in the opening stages of this debate: that we see this as an interim measure. It will be reviewed in two years' time. We recognise that the main thrust of local authority finances will have to be restructured because of the circumstances to which well-informed Senators on both sides of the House made frequent reference during the course of the debate.

In no way is it conceivable that these charges could even begin to approach the level of income that the old system of rating provided before it was finally abolished in 1977-1978. We are spending about £1,000 million a year on the current account expenditure by local authorities. Of that, £250 million is raised at local level already in the current year from local authority receipts and from various charges of one kind or another. Within that round figure of £250 million, only £14 million would be raised by means of the industrial and commercial rate, which is itself tax deductible for corporation taxation allowances or for personal self-employed income allowances. Based on the knowledge that we have today the maximum we envisage being raised by local authorities under this legislation at £20 million, that is out of a total expenditure of £1,000 million.

When rates were abolished in 1977-1978, the average household rate was of the order of £200 or £250 or thereabouts. There has been, as we have seen from the figures, an increase of nearly 102 per cent in inflation during the period of time we are talking about. Therefore, for these charges to begin to approximate to what the level of rates were in 1977, when there was a degree of relief anyway from central Exchequer funds the charges that local authorities would have to make — referred to by Senator Higgins in his informed contribution — would have to be of the order of £500. The highest single charge that any local authority envisage is somewhere in the region of £70. The average range is between £40 and £60 for a water service. That is in the region of £1 a week for a combined water and sanitary service charge of one kind or another.

It has been suggested — I know it is all part and parcel of the political process — that somehow or other this is rates by the back door and that once it starts it will inevitably increase. First and foremost, it is not rates by the back door in any legal sense, although it may be perceived as such since it is a Bill dealing with local authorities and that it is the beginning of an escalation to the kind of figures that were there before. Since it will take two years to review this whole question, there is no way I can see a local authority allowing a manager to think in those terms.

Senator O'Leary raised the question of the role of elected members, which is the second major issue that runs through this entire debate and that has run through the debate throughout the country at local authority level. The elected members have specific power to determine the gross amount that any manager may collect by means of charges. Some Members seem to have the impression that a manager can unilaterally decide to double or treble the charges. The process of charge making is a traditional one that we have used from time immemorial in relation to the collection of a water rate.

Any member of a local authority where a water rate is collected will recognise and understand the process involved in the formulation of the estimates where income tallies are made and the manager and his officials establish what the projected income for the year is likely to be. Provision is included for local sources of finance, including the water rate. On the expenditure side the total amount required is set up and a balance is struck. From that balance comes a figure that needs to be raised at local level by means of water charges. It is the elected members, in their reserved functions, who determine that overall set of figures, as is right and proper for a board of management in any kind of organisation. It is subsequently the executive function of the chief executive — in this instance the county manager — to decide what is the most effective way by which that gross figure can be collected at local level. That is the first form of veto power the elected members have. Therefore, they can set the ceiling in relation to how much needs to be raised at local level.

The second power a local authority member has under the existing legislation, which will be reinforced by the Bill we are introducing here today, is that by way of resolution they can require the manager, in advance of the collection of any charges, to come forward with the details of how he proposes to raise the money, the scheme of waiver and hardship clauses that he might care to operate before the scheme is implemented. Not only can the elected members set a ceiling as to how much needs to be raised by these charges but they can, through the formal process of local government legislation open to them already, require, in advance of any bill ever going out from the local authority, the manager to come forward and give details of how the charges will be collected at local level, including details of the waiver scheme, the categories of people who will be exempt, the facilities for phased payment, if that is appropriate or if it is envisaged.

For example, I envisage that local authority tenants will have the water charges or combined charges levied by the local authority added on as a weekly increment to their rent. It is obviously the most administratively efficient way of collecting that money and it was the traditional way in which rates were collected when local authority tenants paid rates. But so painless was that phased payment over 52 weeks that many people in local authority houses did not even realise they paid rates. Many ill-informed people outside the local authority housing stock repeatedly accused local authority tenants of not only not paying rates but of being subsidised by the rates. Those powers are there and therefore we do not see the necessity to give to members in this legislation — to come to the point that Senator O'Leary was making with some degree of passion — the specific reserved function that he is requesting. We believe the powers are already there and that it is bad legislative practice to clutter up the Statute Book with alternative options doing the same thing. The road is fairly clear and it exists already in legal terms.

In addition, there is substantial evidence from the knowledge that we have from around the country, to which Senator Higgins has already referred — I have visited 12 to 13 local authorities in the manner in which I visited Mayo last weekend — that managers are working in conjunction with their local elected members. Indeed, in Sligo County Council the manager originally brought in a proposed set of charges which the elected members felt were too high. They felt that the level of charges would not be accepted locally and he revised them accordingly and they adjusted their estimates to accommodate that change. That kind of co-operative practice exists in our experience in the vast majority of local authorities. The power to reach an accord that is mutually acceptable to the manager in his executive capacity and to the elected members in their responsible position on local authorities is there. Therefore, we do not see, in response to Senator O'Leary, the need to add to it in that way.

However, if for some reason, and no one can be sure what the future holds in relation to anything, over the next two years managers are straying totally away from the will of the elected councils, or there is some substantial divergence from the practice that I have described under the existing local government legislation that the Minister for the Environment already has to operate, he can by regulation assign the making of detailed charges to those categories of functions that are deemed to be reserved functions under the Local Government Act, 1956. All the necessary power is already there to provide adequate safeguards and controls for the democratic process. The safety net is that we can formalise that by making it a reserved function if the wildest fears turn out to be justified, which I do not believe they will.

There were a number of other points. I hope that I have dealt with that as substantially as I possibly can. On the general question of local government financial reform, Senator O'Donoghue gave a very informed view from his unique experience as adviser to the Taoiseach in the early seventies, of what the options are. The House will at some stage in the future have an opportunity to return to that debate. I do not propose to go into it at this stage because, with all due deference to the Chair, it is not directly relevant to Second Stage. I found myself very much in agreement with the way Senator O'Donoghue closed off the various options that frequently have been discussed and found myself travelling substantially down the same road.

Senator Alexis FitzGerald raised the question of the precise responsibility for the payment of service charges in buildings which are multiple dwellings. We have reverted in this instance, following an amendment in the Dáil, to the practice that obtained when rates were collected. Where a block of flats is owned by the local authority then the individual tenant obviously pays directly because there is a contractual relationship there. Where a block of flats is custom-owned, so to speak, by individual owners, the object essentially is that one can identify the occupant of the individual tenancy. Long term lettings in blocks of flats owned by individuals, obviously on long leaseholds, can be identified in law and, therefore, can clearly be made liable for a service charge in the event of a collection. Short term furnished lettings obviously provide no kind of security from the point of trying to get a legal charge in the event of non-payment. Therefore, we are making the landlord or owner of such premises responsible for the payment of the charge. The charge, depending on how the local authority wish to do it, can be for the entire building or for the number of lettings if it is a multiple letting. That option is there for them.

Various people referred to guidelines and the way in which they might work from local authority to local authority. We are trying deliberately not to give guidelines in anything other than in the broadest sense because we want to turn around the whole thrust of local government in this country from the position of decline which it found itself in, as Senator O'Leary described, when people who previously had been very responsible found that their powers and their responsibilities were taken away and that, therefore, having been treated like children they tended on occasion to act like children. The process of re-orientation will take some time. In that process, we are saying to local authorities, in the main, to produce a scheme with waivers and so on but that they know best how to organise it. We will, however, assist local authorities in establishing such schemes if required but I think they will be more than happy to do it themselves.

It is in that context that any guidelines emanating from the Department will be to assist local authorities rather than a model which they should themselves follow. That is fully in line with the principle the Minister has enunciated since coming into the Custom House. The first tangible evidence was that for the first time since 1977 and 1978, local authorities and the elected members in their reserved functions capacity had the power to set the ceiling for the increase in the commercial and industrial rates.

I think Senator Burke raised the question of planning applications for community buildings and various other things. They are really related to other types of legislation and are not relevant to this legislation. Senator Howard spoke about the possible precipitative action that these charges would have for people who could claim that they are now being doubly taxed. We do not accept that view. I am familiar with the argument and we have heard it before. Anybody in business and paying industrial or commercial rates can claim allowances for the rate paid, either under the corporation tax schedule or, if they are self-employed, running a small family business, can claim allowance for that amount in the completion of their taxation forms. While it is, therefore, a circular transfer which is perhaps highly inefficient the double taxation element is considerably reduced because it is allowable at 100 per cent, to the best of my knowledge, but it is something that we can clarify on Committee Stage.

Many other points were made but they were essentially centred around those two main themes. To summarise it very quickly, there is a recognition of and a concern for the state of local authority finances throughout the country and a desire and, indeed, a commitment from most but not all Members to have something substantially done. There is also a recognition that the deterioration since 1977 was a combination of a number of factors. I recognise there was a political generosity on both sides of this House. They saw that those charges were necessary, that paying for something is a good principle. I do not think that anything ever was free. I think that this free education and free health are misnamed. Everybody knows that in paying their taxes they are providing a service which is not directly charged but is indirectly charged by taxation. The introduction of the word "free" is totally misleading.

There has been, I believe, a very serious decline in the public perception of the work and the role that local authority members perform. That decline is attributed uniquely and exclusively to the activities of journalists, not to the activities of the local authority members themselves. Journalists seeking a cynical or a humorous headline will frequently ignore three to four hours work that a local authority member will engage in and at the end of an evening, will take an item that may not be ranked very seriously by most of the members, and the Anglo Celt or the Nationalist and Leinster Times— in deference to Senator Browne — will headline this as the main issue that preoccupied the council for the duration of the meeting. That denigrates entirely the work of the many councillors who do voluntary work for their constituents. They do it all hours of the night and day and are expected to do it seven days a week. The public automatically assume that a councillor should be at the end of a telephone or should be at home when they call and it is a case of “Where were you, if you were not there?” This applies to an urban district councillor as much as it applies to a full-time professional TD.

In closing on this point, I would say that the Minister and myself served our political apprenticeship in local authorities. We probably learned more — I certainly did — about the operation of politics and the administrative difficulties related to turning political resolutions into tangible reality at local level than anyone would learn here on the back benches in either the Seanad or the Dáil, or indeed for that matter in the front benches in Opposition.

Therefore in the context of the legislation that we are enacting here today on Second Stage and in relation to some of the other matters that Senator Lennon brought up, we want to give a firm and clear assurance that this administration, Labour and Fine Gael, fully recognise the role that all councillors throughout the country, of all sides, play for the safe and secure operation of the democratic process. It is a process that we do not automatically take for granted. It is a precious flower that needs constant attention and cultivation. Few gardens in the world of nations around this globe have firm, secure flowers of democracy. The base and the foundation of that democracy in this country is undoubtedly our local authorities and the members who serve on them. I commend the Bill to the House.

Question put and agreed to.

An Cathaoirleach

When is it proposed to take Committee Stage.

Professor Dooge

It is proposed to take Committee Stage next Tuesday.

Committee Stage ordered for Tuesday, 5 July 1983.

The Seanad adjourned at 6.02 p.m. until 11.30 a.m. on Tuesday, 5 July 1983.