Seanad Éireann díospóireacht -
Wednesday, 1 Jul 2009

Vol. 196 No. 8

Local Government (Charges) Bill 2009: Committee Stage (Resumed).

Question again proposed: "That section 11 stand part of the Bill."

Senator Paudie Coffey

Before the break I was outlining to the Minister my concerns and those of the Fine Gael Party about the Private Residential Tenancies Board. I requested clarification from the Minister, if possible, on the €10 million sitting in the bank accounts of the Private Residential Tenancies Board that has not yet been transferred to local authorities to fund their inspections and enforcements. I raised also the issue of the lack of adequate IT systems to manage registrations and new registrations coming in to the Private Residential Tenancies Board. That will play a large part in the information on which local authorities will depend to set up their own databases for the administration of charges that will apply under this legislation.

In section 11(2)(b) and (c), “relevant person” means the Electricity Supply Board and the Revenue Commissioners. My understanding is that under this legislation local authorities can require those agencies to transfer any data or information they may have on their databases that will assist in compiling the database for the administration of these local government charges. The Minister can correct me if I am wrong but I understand difficulties could arise in this area and that it could be open to legal challenge because as far as I understand it every agency must comply with the Data Protection Acts. I ask the Minister specifically if his Department has consulted the data protection office regarding this element of the Bill. If a requirement under this legislation is made of local authorities and a request is made either to the Revenue Commissioners or the ESB for information personal to a householder, I am not sure if that agency will be in a position to give that information but it is stated explicitly in the Bill that they possibly can.

I point out also that the Electricity Supply Board has been sub-divided as regards supply. I note from the explanatory memorandum that the reason the Electricity Supply Board is listed as a relevant person is that the Minister can look for usage trends in electricity in regard to its supply but the Electricity Supply Board is sub-divided into various departments and divisions. I am sure the area the Minister is referring to is ESB Customer Supply, which is responsible for metering, monitoring and registration of usage in particular households. If that is who the Minister is referring to I suggest he also needs to imply the other suppliers in the independent marketplace such as Bord Gáis, Airtricity and many others because the legislation as drafted does not capture all electricity suppliers in the manner in which the Minister requires it.

An issue arises around data protection and whether the ESB will supply that information. If it does, has consideration been given to the fact that the ESB is a semi-State company and a commercial enterprise? If it is required to give that information, how much will it charge local authorities for providing it? Has that been considered?

My understanding of the recent legislation on medical cards is that no data requirement for transfer of information was required from doctors or any health practitioners, yet under this Bill there is a requirement. How far is the State prepared to go to acquire this information and will we supersede all previous data protection Acts? The provision of PPS numbers is referred to in paragraph 11(2)(a) “in relation to an individual, that individual’s personal public service number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005).” I presume this means that the PPS numbers of individuals can be transferred from the Department of Social and Family Affairs to a local authority to ensure its registration database is complete.

When I was a member of the joint committee which looked at improving efficiencies in the electoral register, the Department of Social and Family Affairs told the joint committee that data protection legislation precluded the Department from providing PPS numbers to third parties or State agencies, in that case the Electoral Commission. Does the same barrier apply in this instance? If not, are we creating a precedent for the wider use of PPS numbers by the State, for electoral register or other purposes?

Questions remain to be answered regarding this Bill, and these are some which I feel require further clarification.

Senator Paddy Burke

The Bill provides for the trading of information between local authorities and the Revenue Commissioners. The Revenue Commissioners might request information from a local authority regarding all owners of second homes in the local authority area. The local authority is then obliged to provide the Revenue Commissioners with a list of properties owned by people within its area.

A local authority may also ask the Revenue Commissioners for any notice of assessment made against individuals who have properties or second properties in its jurisdiction. That is a fierce invasion of a person's privacy. We are giving a major power to local authorities. Individuals have a right to keep their dealings with the Revenue Commissioners private. This section appears to allow such information to be given to a local authority. Thus, information about individuals, who may or may not own second homes, will be made public. An individual may have recently disposed of a second home or may not have one at the time the information is sought. I ask the Minister to clarify this matter.

Senator Maurice Cummins

Does the term "relevant person" include community welfare officers, who administer the rent allowance scheme in many instances? I am sure local authorities would need information from community welfare officers regarding landlords and so on. If this is so, the term "relevant person" should include community welfare officers. Are they covered by data protection legislation? Community welfare officers and officials of the Department of Social and Family Affairs will not give information to public representatives and officials of local authorities.

Minister for the Environment, Heritage and Local Government (Deputy John Gormley)

I assure Senators that I have looked at all these issues and I am assured, by the Attorney General and others, that I am not overstepping the mark with regard to invasion of privacy, etc. I will answer the points raised one by one. First, for Senator Coffey's information, I will read part of a letter from the Private Residential Tenancies Board:

Significantly increased resources are being provided to local authorities for inspection purposes and funding more than doubled between 2005 and 2008, rising from €1.5 million to €4 million. Funding will be maintained at this level for 2009, bringing funding allocations for this purpose since 2004 to €15 million.

The letter sets out the number of inspections carried out and the PRTB registrations. I will pass the letter to Senator Coffey. It is clear that funding has increased significantly from 2005 to 2008. The letter also states:

The payment to the local authorities of their portion of the income stream is dependent on levels of inspection performance by those authorities and while that has increased over the years, unused surplus funds are held by the PRTB in a fiduciary capacity for the local authorities. By the end of 2008, that accumulated fund was in the region of €9 million and it is currently estimated to be in the region of €10 million.

This provides a strong platform from which to fund more onerous inspection activities, in light of the new rented accommodation standards regulations. [Those new regulations were introduced in February 2009 and I think Senator Coffey will agree they were necessary.] These regulations set down a more rigorous set of minimum standards, most of which have immediate effect. However, those elements having cost intensive implications for landlords must be addressed by them within a four year window concluding on 1 February 2013.

Conscious of the need to reduce this accumulated fund and aiming to move the PRTB to a more self-sufficient financial standing, the disbursement ratio referred to above was readjusted on 1 April 2009. Over a number of years, as inspections activity continues and increases, the accumulated fund will be run down.

The Department will continue to monitor the situation taking the long-term funding requirements of the PRTB into account and further adjustments to the registration fee income disbursement ratio will be made as deemed necessary.

I am happy to give Senator Coffey the full reply — I read only part of it — as I know the Senator has an interest in this matter.

I will try to recall some of the issues raised. Senator Cummins asked about community welfare officers. It was not necessary to include a reference to community welfare officers because we are already dealing with the PRTB, which has access to that information.

In reply to Senator Burke, local authorities will only have access to information relevant under the legislation. They will not pry into people's other affairs. I assure Senator Burke of that.

Senator Coffey asked if we are covering all bases when we deal with the PRTB and the ESB and whether there are other sub-groups which should be included. The advice of the Department of Communications, Energy and Natural Resources is that all bases are covered by the legislation.

Senator Paudie Coffey

I thank the Minister for his clarifications. However, he has not answered my question. Has the Department consulted the Office of the Data Protection Commissioner regarding the provisions of the Bill? The legislation will require data held by agencies — State, semi-State and others — to be shared. The ESB, for example, is now divided between ESB Networks and ESB supply. Data protection legislation precludes the transfer of information between those two ESB divisions. That is because of the open market in the supply of electricity. I do not believe the legislation covers all bases. The explanatory memorandum explains that information from the ESB is included to measure electricity usage in holiday homes and other homes used as second dwellings. Many such houses can now be supplied by suppliers other than the ESB, which are not included in the legislation. That base is not covered.

I would like to hear more about the Data Protection Acts. Has the Minister consulted the Data Protection Commissioner? Does the Bill comply with data protection legislation? I have concerns regarding this area and they were outlined to the joint committee by the Department of Social and Family Affairs.

This is where legislation should be debated and analysed and its shortcomings identified. I seriously suspect there are shortcomings in this section.

Senator Maurice Cummins

If a person is in a nursing home for three years, that person is liable for the charge even if the house is not rented to others. In most instances, families will have control of their parents' house and they will not disrupt it by letting it to others. However, that charge will be imposed on the person in the nursing home. I do not believe this is what the Bill was meant to do. I ask the Minister to find a way to deal with this. People will be going into nursing homes under the fair deal scheme and when they pass on, a percentage of the value of their property will have to be paid. Surely that should be sufficient compensation for the State rather than also asking for €200 per year while people live out the last few years of their lives in a nursing home. I urge the Minister to address this on Report Stage.

Senator Paul Coghlan

Senator Maurice Cummins has made an important and relevant point. Everybody——

An Cathaoirleach

The section deals with data sharing.

Senator Paul Coghlan

Where a person is in a nursing home, perhaps suffering from dementia, and has a large family, the family is not in a position to do anything about the house. Nobody can touch it. The parent is in a nursing home as a result of ill health or mental infirmity. It is ludicrous to expect that person to make a payment annually to the local authority. I echo Senator Maurice Cummins's appeal that this situation be specifically excluded.

Senator Paddy Burke

Why would the Revenue Commissioners seek data from the local authority? I can understand why, under this Bill, the local authority would need data from the Revenue Commissioners, but not why the Revenue Commissioners would require data from local authorities. Getting information from the Revenue Commissioners is the same as sharing data with the ESB. However, there is a specific provision in the Bill under which the Revenue Commissioners can request from the local authority the number of people who have second or third homes. I presume the county manager will provide that information. I also presume there will be no charge for this information. The sharing of information can cost money, whether the Revenue Commissioners would charge the local authority or vice versa. I can understand why the Revenue Commissioners might need the information but I do not know why the obligation would be on the local authority to provide it under this Bill.

Deputy John Gormley

I am reliably informed that the Revenue Commissioners try to build up a matrix on tax compliance. The reason is that individuals who are not tax compliant in a certain area tend to act the same way in other areas as well. It can point the Revenue Commissioners in a certain direction. That is the reason for the provision.

On the points raised by Senator Paudie Coffey relating to data sharing and exchange, the first line of section 11 is very clear: "Notwithstanding any enactment or rule of law...". We have been given the best legal advice on this and we are advised that those matters are covered. The Senator takes a different view and I accept that.

I am not sure, a Chathaoirligh, if I am allowed to address the points raised by Senator Maurice Cummins or if it will arise under a different section.

An Cathaoirleach

It might arise later in the Bill.

Deputy John Gormley

I will be happy to do so.

An Cathaoirleach

It is not relevant to section 11.

Senator Paddy Burke

If the Minister deals with it at this stage can there be further debate on it?

Deputy John Gormley

I hope there will be no further debate because I wish to clarify the situation.

Senator Paul Coghlan

We should hear the Minister's response.

Deputy John Gormley

The Senators need to be assured on these issues and that is why I facilitated dialogue and consultation during the interval in the debate. The Senators raised the question of liability for the charge in circumstances where a person who is in long-term care due to ill health still owns but does not occupy what was their principal private residence. The Senator is correct that it was never the intention that the Bill should seek to charge people in this position or that any liability for the charge would apply in these circumstances. For the avoidance of doubt, I will seek advice on the matter before the Bill is debated in the Dáil and will take whatever steps are necessary to ensure that liability for the charge does not arise for such people. I give that undertaking to the House.

Senator Paudie Coffey

I thank the Minister for that clarification. I expect we will see the clarification regarding people in nursing homes on Report Stage. With regard to the Revenue Commissioners, is there a precedent in principle in the Bill? The Revenue Commissioners already acknowledge that where a dependent relative is living in a dwelling that is mortgaged by a son or a daughter, interest relief can be claimed on that dwelling. In light of that and applying the same principle, there should not be a charge on dependent relatives who are living in a granny flat or in an annexed dwelling to the house. A precedent has been set. This section is about data sharing with the Revenue Commissioners. The Revenue Commissioners are already giving tax relief for dependent relatives. In concurrence with that principle, this charge should not be applied to dependent relatives living in a granny flat or shared accommodation that might be attached to a main dwelling. Perhaps the Minister will clarify the position.

Deputy John Gormley

A number of Senators have referred to a granny flat. The question of whether these are separate dwellings is relevant and was part of our discussion during the interval. Given the different arrangements people make regarding adjacent living accommodation for their parents, for example, in terms of access and the extent of living accommodation in the flat, some granny flats are likely to constitute separate accommodation within the provisions of the Bill and some will not. Those that are not separate will not be liable for a charge. I accept, however, that other granny flats will constitute separate accommodation and liability for the charge will depend on ownership of the property where it is used as a principal private residence. Where those living in the accommodation do not own the granny flat the owners will, in common with others who own second properties, be liable for the charge.

With regard to the Senator's point about the Revenue Commissioners, those discussions will have to take place with the Revenue Commissioners. If the Senator is saying that what occurred previously sets a precedent now, he will have to flesh out what he means. As far as I am concerned, this legislation is clear. If the Senator is saying that we should make an exemption, it does not arise in this case. We cannot make an exemption. I have set out how it applies to that accommodation, and I do not believe an exemption arises with regard to how the Revenue Commissioners have acted heretofore.

Senator Paudie Coffey

I will respond briefly, and I thank the Cathaoirleach for his indulgence. There is a precedent whereby a person such as a dependent relative, perhaps a parent, is living in a second residence, not the principal private residence of the owner, and there is no income. The Revenue Commissioners realise and acknowledge that and offer interest relief on the mortgage for that dwelling. In the same light I ask that an exemption be provided for those who have dependent parents living in a house or a granny flat where there is no income because it is not an investment property. A person is looking after a dependent relative and that must be made clear. The Minister tells me that there is no such provision in the legislation and such people will be charged. I am disappointed with that outcome.

Senator Paddy Burke

I support Senator Coffey on this. The Minister is applying this levy to granny flats or apartments or separate living quarters.

Deputy John Gormley

It is as I stated. It is very clear.

Senator Paddy Burke

We all know what these are. They are located throughout the country. Provisions are made within families for a parent or parents to live separately but under the one roof. In most cases that provision is made to prevent people going into nursing homes or similar accommodation. This is wrong. I support Senator Coffey who also feels very strongly about this issue.

The Minister has not addressed another issue about which we spoke, namely, where people who may be living in poor accommodation apply for planning permission to build a new house. The old house still stands as a house. Later, that house can made into living quarters. In some cases it may take a considerable amount of money to make the place habitable. In others it may not cost much. The Minister has not been specific about such houses and we know there are very many such throughout the country. My reading of the Minister's statements is that such a house will be liable for €200 per annum even if nobody is living in it. In some cases such houses are derelict or nearly so but are still houses. It seems they are liable for the charge.

Under section 11, the local authority will provide information to the Revenue Commissioners and in this case, it will declare the owner to have a second home. I do not know what use the Revenue will make of such information but it will have it. I can see that being a problem but I want the Minister to be more specific in respect of such a type of house — the derelict, the nearly derelict or the kind that may not take much money to make it habitable.

Senator Pearse Doherty

I refer to Senator Coffey's point, which was expanded upon by Senator Burke. I was unfortunate to miss about 45 minutes of the earlier discussion. Amendment No. 6b that I proposed dealt with the granny flat issue. It can be made exempt. We are all happy that if the flat is part of an existing dwelling it will not come under the charge and we should not muddy waters by talking about that case. We are discussing a self-contained flat which adjoins a residential property with both properties owned by the same person.

I commend the Minister on the Bill but what he is doing in this regard is very wrong. Many people build granny flats onto their house for different reasons, one being that they can provide care at close proximity for their dependent parents so that there is no need for them to go into a home. That saves the State a great deal of money. Another reason concerns isolation in rural areas where people do not want to live out in the countryside on their own and wish to feel protected.

The State is now going to penalise a son or daughter financially for building a place for their mother or father in their later years. That is unacceptable. Sometimes when we are dealing with legislation we speak of line 22 and all the rest of it but we need to think about real-life experiences. We need to talk about the son and daughter whose mother and father live in a rural isolated area in an old house in which they have lived all their lives. They decide to build a granny flat onto their house and the mother and father leave their house to move into the granny flat, on which there will be a levy of €200. The house they left will also have a levy of €200 every year because of a decision made by the son or daughter. It was their right decision to build a wee extension to the house, a self-contained unit to help their parents get through the later and final years of their life in close proximity to the son and daughter and grandchildren.

I commended the Minister on this Bill but it was not supposed to be about penalising our elderly people or their sons and daughters who build granny flats for them. It was supposed to be about those who had enough wealth to accrue second properties or rental properties throughout this city and in other areas and who used the water and sewerage services of the local authority and did not pay their fair share. The old person or the son or daughter who dug into their own pockets to extend their house should not come under the terms of this Bill. I plead with the Minister at this late hour on Committee Stage to consider this matter once again. It can be made exempt. There may be difficulties and perhaps my wording or that of other Senators was wrong.

I believe we are coming at this in the right spirit. I shall raise the issue outside this Chamber although I do not want to do so because I have been seeking this Bill for a long time. It is very close to being ready. Other concerns were raised that I do not share but this issue is fundamental. The Minister is sending out the wrong signal. We are talking about 4,000 properties — only a handful — but this will go to the core in communities throughout rural Ireland. I am sure it happens in cities too although I am not familiar with that situation. In rural Ireland it is a major issue and should not arise in this legislation.

Senator Ciaran Cannon

I thank the Minister for his most conciliatory approach to the legislation up to this point. He even engaged in a conversation with Members outside the Chamber and this is very much appreciated. On his part he proposed to consider addressing the anomaly in respect of elderly people who have to move into permanent nursing care so that they might not have the levy applied to them. I hope he will arrive at that conclusion.

Senator Doherty is correct in pointing out that this issue arises time and again in rural Ireland. Sons or daughters who are willing to take on the care of their often physically or mentally very ill elderly parents and choose to accommodate them within or immediately adjoining their own dwelling are taking the burden of care from the State and agreeing to undertake it themselves. The State has encouraged this over recent years through the provision of home care packages and it is a very laudable aspect of our health care provision. On the one hand, therefore, we encourage people to do this but on the other we seek to extract €200 per year from them for choosing to assist the State in the care of its elderly people. It will cost €200 per year this year but who knows what it will cost next year or the year after.

Like Senator Doherty, I do not believe for a moment the Minister intended this should occur when he first began to look at and propose this legislation. He cast a very wide net to go fishing for tuna but he is catching a great number of dolphins which is not what he intended. He conceded he will go back and look again at the issue of the elderly people moving to permanent nursing home care. I implore him to undertake to look at this issue too.

Senator Paul Coghlan

Given the Minister's fair mindedness, he must see this is absolutely ludicrous. As Senators have stated, it is against good State social policy. Effectively it concerns the same house. I do not want to be repetitive but these are people who are doing the State a favour. This must cut against everything the Minister believes in. I salute his fair mindedness and, in common with my colleagues, I appeal to him to exempt this.

Deputy John Gormley

I again thank the Senators for raising these points which I know are sincerely made. I found the discussion very useful. That is the purpose of debating legislation, that we tease out any outstanding difficulties.

Let me be very clear, I do not seek out individuals on whom to impose a €200 levy. I do not wish to give the impression this is some kind of tax on the elderly. People might construe it as such which would be unfortunate.

Reverting to Senator Cannon's points, if one's elderly parents live beside one, I assume they would be located there so that they could be looked after. Therefore, it would not be fair to categorise them as being independent. I do not know how the issue of individual cooking facilities, etc. arises. I would imagine it would not.

Senator Paddy Burke

For their independence.

Deputy John Gormley

I have just stated that, in many cases, they are present to be looked after. Let me——

Senator Ciaran Cannon

Yes, but——

An Cathaoirleach

Allow the Minister, please.

Senator Ciaran Cannon

Okay.

Deputy John Gormley

We are meant to examine these issues and there may be an issue I may need to reconsider.

The matter raised by Senator Doherty is not the intention. I am not someone who looks for tuna or dolphins. I want to be as fair as possible. I will consider the matter overnight to determine what clarity can be provided.

An Cathaoirleach

For Report Stage.

Deputy John Gormley

I will seek advice from the Attorney General and others to see whether we can nail the issue down. That is all I can do.

Senator Paddy Burke

What of the issue of the rural house that may need——

Deputy John Gormley

The house must be habitable. If it is not, it does not fall under this legislation. I meant to refer to Senator Doherty's point in this regard.

Question put.

The Committee divided: Tá, 25; Níl, 16.

Tá

• Boyle, Dan.
• Brady, Martin.
• Butler, Larry.
• Callanan, Peter.
• Carty, John.
• Cassidy, Donie.
• Corrigan, Maria.
• Daly, Mark.
• Ellis, John.
• Glynn, Camillus.
• Hanafin, John.
• Keaveney, Cecilia.
• Leyden, Terry.
• MacSharry, Marc.
• Ó Domhnaill, Brian.
• Ó Murchú, Labhrás.
• O’Brien, Francis.
• O’Donovan, Denis.
• O’Malley, Fiona.
• O’Sullivan, Ned.
• Ormonde, Ann.
• Phelan, Kieran.
• Ross, Shane.
• Walsh, Jim.
• Wilson, Diarmuid.

Níl

• Bradford, Paul.
• Burke, Paddy.
• Buttimer, Jerry.
• Cannon, Ciaran.
• Coffey, Paudie.
• Coghlan, Paul.
• Cummins, Maurice.
• Doherty, Pearse.
• Donohoe, Paschal.
• Fitzgerald, Frances.
• McFadden, Nicky.
• Norris, David.
• O’Reilly, Joe.
• Regan, Eugene.
• Ryan, Brendan.
• Twomey, Liam.

Tellers: Tá, Senators Camillus Glynn and Diarmuid Wilson; Níl, Senators Paudie Coffey and Maurice Cummins.

Question declared carried.

SECTION 12.

Question proposed: "That section 12 stand part of the Bill."

Senator Pearse Doherty

How did the Minister determine the fine, which is not to exceed €2,000? Some people who will be subject to this legislation have multiple properties. We received representations today from people in the self-catering industry whose annual levy will amount to €150,000. Those with private rental properties may have a larger levy. The fine is not to exceed €2,000. Approximately 52 people went to prison for not paying their television licences over the past two years. I am not suggesting that people go to prison for not paying their holiday home levy or granny flat levy, which I hope will not exist this time tomorrow. Is the fine of €2,000 per individual property?

Deputy John Gormley

Yes.

Senator David Norris

I am floating in on this rather opportunistically. Senator Doherty raised the spectre of self-catering units and asked whether the fine was to be applied to each unit. I received communication at a very late date from somebody I know who is engaged in the self-catering chalet business. The cost of levies and fines would apparently be sufficient to put him out of business. If possible, I will send a copy to the Minister and consider tabling some amendment. I know it is not practical for the Minister, having yielded to much public persuasion on the matter of mobile homes etc., to exempt every single category one by one. If he did, he would be left with absolutely nothing in the kitty. However, I want to fire this shot so I will be able to say I mentioned the issue, tabled an amendment or sent the communication to the Minister for his consideration.

An Cathaoirleach

Does the Minister wish to reply to Senator Doherty on section 12?

Deputy John Gormley

I tried to indicate that the fine will be per individual property. Therefore, there would be an accumulation of fines.

Question put and agreed to.

Sections 13 and 14 agreed to.

SECTION 15.

Amendment No. 13 not moved.

Question proposed: "That section 15 stand part of the Bill."

Senator Pearse Doherty

My question is loosely related to the payment to town councils. In the Minister's Second Stage speech, he referred to the website facilitating the payment of a charge, which was designed by the Local Government Computer Services Board and which, if it is like the on-line system for the payment of motor tax, we all welcome. The Minister stated the revenue accruing will be relayed automatically and at intervals to the bank account of the city or county council in whose area the property is situated. What does "at intervals" mean? Will it be every week, month, three months or six months? I hope the local authority in Donegal will raise €4.6 million through the revenue that accrues. One problem the local authority has relates to cash flow and high interest rates. If the money became available quicker, it would relieve some of the pressure on the authority. Will the Minister clarify what "at intervals" means in respect of the on-line payment system?

Senator Paudie Coffey

This section refers to mechanisms to allow local authorities to transfer what I understand is the income from the charges to town councils that are concerned about the administration in their own areas. Senator Doherty mentioned the income from these charges. Thanks to the Oireachtas Library and Research unit we have a very good graph with estimates of the income that various local authorities can expect from this charge. Dublin City Council is high on the graph, as are the large counties, Cork and Donegal. The income for small counties such as Monaghan, Carlow and Longford and even Waterford city is low down the list. Waterford county, where I come from, can expect a fairly low income compared with other local authority areas.

There are some town councils in its administrative area, including Tramore and Lismore, but other towns such as Portlaw, Kilmacthomas and Dunmore do not have town councils although they are larger than some that do have councils. How will the local authorities be required to spend this charge when they take it in? Will there be any requirements by ministerial order or otherwise to ensure local authorities share the income from this charge among the towns that do not have councils? There seems to be no facility for that. Do we have to rely on good management in the local authorities, through their managers and directors of services?

Senator Pearse Doherty

Section 15(1) provides, "A county council shall, each year, make a payment to each town council within the county". Should it be prescribed in the legislation that this happen within a certain timeframe? The date of collection will be 31 March next year but a local authority does not have to hand the money over to a town council until December of that year. There might be late payments but should the payment be made within a month of the deadline and the late fees be paid the following year? I am thinking of Senator Glynn's comment about the large town councils in whose area there are many rental properties. County councillors might hold onto the money because they know that having money in the bank is a major issue for local authorities which have overdrafts with high interest rates and so on. The speedy release of money is a big issue for county and town councils.

Senator Camillus Glynn

I have made my position on this matter clear. The Minister cannot accede to my request. The Bill provides, "A county council shall, each year," which means that every year it must make a return to a rating town council within its administrative area. This does not apply to the former town commission county councils as I understand the Bill. The rate struck by the former town commissions is a statutory demand on the county and is quite different from the rating town councils.

Deputy John Gormley

Senator Glynn is exactly right.

In response to the question about on-line payments, the computer boards disburse the money at intervals, probably once a month.

The question of which town councils receive how much is a matter for the local authority, or the manager. I hope that as we discuss these issues in more detail in the context of the White Paper we can examine the powers of the members. We seem to agree that the managers have excessive power and the local members do not have those powers. This must be addressed. There is no question that there is an imbalance there. It is recognised on all sides of the House. That is what I intend to do in the White Paper. I hope we can get broad agreement on those issues because reform of local government is urgent. We do not have real local government, we have local administration. The people at the top, the managers, have the power. As democrats none of us can be too happy about that situation.

Senator Pearse Doherty

I agree with the Minister's latter comments. That is why I think we could or should have grabbed the Bill by the horns and allowed local authorities to set their own rates but I note the Minister's comments on this and know that he is disposed to examining the point. I welcome the fact that he has agreed to consider some of the other issues, three of which are covered in some shape or form in my amendments. I am glad of the Minister's interaction with Members here.

I did not put down an amendment under section 15 but my point is that the section commits the local authorities to paying the relevant money to the town councils but does not state when. The local authorities will receive the money at the end of March but can hold onto it under the legislation until December.

Deputy John Gormley

Is the Senator talking about town councils?

Senator Pearse Doherty

Yes.

Deputy John Gormley

It is an annual payment.

Senator Pearse Doherty

I have spoken to those in the finance departments of local authorities who say that cash flow is a massive problem. If a county council has €1 million which it must give to its town councils having collected it in March 2010 and holds on to that money until December that will benefit the local authority, not the town council. Holding onto the money for eight months makes a massive difference because it reduces interest rates and has the opposite effect on the town council. Most local authorities run on overdrafts and high interest rates. Should the legislation not state that a county council shall each year within one month of the 31 March deadline pay each town council? The Bill gives them the scope to do this any time within the year.

Deputy John Gormley

The difficulty is that one does not know what the payments will be. The local authorities have to collect the money and will not know at that stage how much has been collected. That is why we do it annually. The Senator's points on cash flow are correct and no doubt people want to get their hands on money as quickly as possible but the local authorities have to go out and collect the money, then disburse it to the town councils.

Question put and agreed to.

SECTION 16.

Question proposed "That section 16 stand part of the Bill."

Senator Paudie Coffey

As we come to the end of Committee Stage I acknowledge the engagement of the Minister and his officials with all sides of the House in respect of clarifications that we requested during the day. The Minister understands that we raise these concerns about the legislation for genuine reasons. Fine Gael generally supports this Bill which is a welcome development to try to broaden the revenue base for local authorities. I acknowledge the Minister's engagement today, taking on board the views of all sides of the House because that is good parliamentary practice.

An Leas-Chathaoirleach

I can let the Senator speak at the end of the discussion on the Bill.

Senator Paudie Coffey

That is what it means to analyse legislation. I thank the Minister.

Question put and agreed to.

Title agreed to.

Bill reported with amendment.

An Leas-Chathaoirleach

When is it proposed to take Report Stage?

Senator Camillus Glynn

Tomorrow afternoon.

An Leas-Chathaoirleach

Is that agreed?

Senator Paudie Coffey

What time tomorrow?

An Leas-Chathaoirleach

That will be a matter for the Leader on the Order of Business tomorrow morning.

Senator Paudie Coffey

I acknowledge the engagement today by Senators on all sides of the House and the Minister and his officials. I do not want to finish on a negative note but it is unfortunate that this charge was announced in the budget in October 2008 and as Senators we are grappling with the fact that we are squashing much legislation into the last few days of the session. Very relevant issues of concern are been raised in the Bill and it is unfortunate we find ourselves with the time constraints we have. I know it is up to the Leader to outline when Report Stage will be taken but it would be in the best interests of the Government and the Opposition if we could defer Report Stage until next week.

Senator Pearse Doherty

Echoing the sentiments of Senator Coffey, it is disappointing we did not get the time to tease out the amendments. As other Senators and the Minister were providing explanations, it was difficult to think on one's feet, particularly when dealing with this type of legislation. As somebody stated, the net is out there and we are catching people that we should not catch with these charges. However, we are where we are. I welcome the Bill and I called for it prior to the Government being willing to accede to the request. It is important because it empowers local authorities and provides them with additional revenue. If anything good has come out of the recession perhaps it is the widening of the tax base for local authorities.

On my behalf and on behalf of my party I thank the Minister for the interaction he and his officials have had. I am glad he took the approach he did to the Bill, not only in the debate today but in shaping it initially. There are still a couple of bumps which we will try to smooth out on Report Stage. I wish the Minister and his officials well in drafting the amendments he indicated he would consider on the three areas we raised today.

Senator Camillus Glynn

I have always been an advocate of giving additional powers to local government and its members but with power comes responsibility and those members must take on board the responsibilities devolved to them. This often involves taking hard decisions. I look forward to the remaining Stages of the Bill. I thank the Minister and I was particularly pleased that in his opening statement he honoured the commitment to create additional town councils. That is extremely important; more important than some people realise. Town councils, even the non-rating town councils as they are known, constitute a very important link. They perform a very important service for the community. They have an elected voice and often use it to articulate problems in their administrative area which are then taken up by the county council or by the Government. All round, this has been a good day for local government and I look forward to Report Stage tomorrow afternoon.

Deputy John Gormley

I thank Senators for their engagement today. It has been a very fruitful discussion. I believe in teasing out issues as best we can. The legislation was published a week ago and I appreciate the pressures that Members are under in trying to grapple with complex legislation. This is a relatively short Bill but undoubtedly any time a levy is imposed sensitivities are involved, and particularly at a time of economic recession people are sensitive to any hikes in personal taxation. I understand this and that Senators have a job to do. Today shows that the two House system is one we can be proud of because it enables us to go through not just five Stages in one House but ten stages so when we are telescoping the time involved we are still in a position to go through the Bill in the detail required. I thank all Senators for their engagement and I hope we can go through more of the issues tomorrow. I have given assurances to Senators that I will consider those issues and they can be assured that I will do so.

Report Stage ordered for Thursday, 2 July 2009.