I thank the Chairman and committee for the opportunity to discuss the Revised Estimates I look forward to working with the committee on matters relating to the environment, community and local government.
It is appropriate that we are addressing my Department's expenditure Estimate for 2011 at our first meeting. It covers a wide range of activities and I look forward to our discussion. I am accompanied by the Minister of State, Deputy Penrose, who has responsibility for housing and planning and the Minister of State, Deputy O'Dowd, who has responsibility for NewERA policies and will speak on the water policy elements of the initiative.
These are indeed changing and challenging times and the new ministerial team will work constructively with the committee structure in the coming period. Reflecting the transfers of function announced on the formation of the Government, the Estimate for my Department includes provision for supporting communities and promoting rural development, which were previously the responsibility of the former Department of Community, Equality and Gaeltacht Affairs. Heritage spending is now the responsibility of the new Department of Arts, Heritage and the Gaeltacht.
The overriding aim of the Government's economic and budgetary strategy is to return the economy to sustainable employment growth and ensure jobs for our citizens. A key condition for doing this is to restore order to the public finances in full compliance with the EU-IMF programme of financial assistance. Substantial efforts are being made across government in this regard and are reflected in the Estimate before us. Departments are working on reviews of capital and current spending that will give options for substantial savings and form the basis of Government decisions in the autumn. The committee can be under no illusion that tough decisions lie ahead for us all and we cannot and will not shy away from them.
The Vote for the Department in 2011 amounts to almost €1.61 billion, a substantial sum. Members may be assured that we will work to maximise efficiency and secure the best value for our citizens from that resource. The Estimate before the sub-committee is complemented by a briefing note we have prepared on the 2011 Estimate as a whole. I propose to comment on aspects of the Estimate and I will be happy to deal with these or other issues, as required, in our later general discussion.
Under local government finance-efficiency, in 2011, it is estimated that local authorities will invest €2.2 billion in essential local infrastructure, and a further €4.8 billion is budgeted for the provision of local services. With its democratic mandate and broad range of responsibilities, the sector is pivotal to promoting and facilitating economic development and providing vital public services at local level. Income levels for local authorities have continued to fall in 2011, reflecting the ongoing impact of the downturn on all income sources received centrally and obtained locally.
The local government fund is not immune to the general downturn in the economy. The fund will receive an Exchequer contribution of €164 million in 2011 together with estimated proceeds of motor taxation of €953 million. Allocations from the local government fund to local authorities have been reduced by 9.2% on average for 2011, following a reduction of 3.9% on average in 2010. I acknowledge the efforts made by the local government sector to moderate demands on the commercial sector in the form of rates and charges. Despite a range of pressures on programme funding, I am pleased that the national average rate on valuation has been contained this year by a further 0.6%.
The non-principal private residence charge, which was introduced in 2009, broadens the revenue base of local authorities by levying a charge on certain domestic dwellings. The charge has put in place a new and relatively stable local source of funding. It represents an important step change in how local government is financed, with the moneys generated being retained by the relevant local authority and spent on local services. The yield from the charge was €68 million in 2009, €66 million in 2010 and a similar amount is anticipated from this source in 2011.
The EU-IMF programme of financial support for Ireland commits the Government to the introduction of a property tax for 2012. In light of the complex issues involved, such a tax, requiring a comprehensive property valuation system, would take time to introduce and, accordingly, to meet the requirements in the EU-IMF programme, I have indicated my intention to introduce a household charge in 2012 and I will shortly bring proposals to Government.
The local government efficiency review group reviewed the cost base, expenditure and numbers of staff employed in the sector, including a review of the effectiveness of programmes and proposals to enhance efficiencies. The group acknowledged that savings of more than €300 million had been achieved by the sector since 2008. It identified further savings totalling €511 million, comprising €346 million in efficiency savings and a further €165 million in revenue raising recommendations, which have short-term, medium-term and long-term horizons for delivery purposes.
I have established an implementation group to advance relevant recommendations contained in the efficiency review group report, initially those related to shared services, procurement, ICT, audit, etc., to realise further savings. Other substantive recommendations in the report will need to be considered in order that we can be sure that the sector operates with maximum efficiency and effectiveness and makes the fullest contribution to national recovery.
My Department is responsible for a range of programmes to support communities, including the local and community development programme, which tackles poverty and social exclusion in disadvantaged communities; the RAPID programme, which tackles the spatial concentration of poverty and social exclusion in designated areas; and the Rural Development Programme 2007-2013 which implements measures to improve the quality of life in rural areas and facilitate the diversification of the rural economy. Axes 3 and 4 of the RDP, part of the Common Agricultural Policy of the EU and co-funded at 55% , has an allocation of €62 million in 2011 and is playing and will continue to play a significant role in addressing employment and quality of life issues in rural Ireland.
Two main priorities of this programme fit well into the overall ethos of my Department. These are to promote and facilitate the diversification of the rural economy and to improve the quality of life in rural areas. The programme is designed to address directly many of the challenges facing rural communities, including the need to increase economic activity and stimulate job creation, improve access to basic services for rural dwellers and encourage rural tourism based on sustainable development of natural resources.
The local and community development programme aims to tackle poverty and social exclusion through partnership and constructive engagement between Government and its agencies and people in disadvantaged communities. It is a key support to the Government's job initiative, as it provides supports to increase access to formal and informal education, recreational and cultural development activities and resources and to increase people's work readiness and employment prospects. I am pleased, therefore, that we have been able to secure €63 million for the programme in 2011. This allocation will allow for the participation of more than 5,000 individuals in accredited education-labour market training, the support of 1,500 in employment and 3,000 in self-employment.
The programme for Government has committed to reviewing the delivery of services at local level with a view to reducing duplication, providing more efficient and effective local services, and ensuring greater democratic accountability in decision-making. An important means of achieving this is through greater alignment of local government and community functions at a strategic, operational and administrative level. Work has commenced in the Department on developing proposals for the introduction of more coherent service delivery of services at local level.
Ensuring that we have a modern, adequately resourced water services sector which will manage and deliver critical infrastructure to support economic recovery and employment creation, is a key priority for this Government. The Minister of State, Deputy O'Dowd, will address this matter later. An allocation €435 million is being provided from the Exchequer this year to fund the ongoing investment in water services infrastructure. Of the investment in 2011, €350 million has been allocated to the Water Services Investment Programme 2010-2012. This investment is required not only to expand infrastructural capacity, but also to upgrade the water supply distribution network to tackle uneconomic levels of leakage and improve operational efficiency. Good progress is being made with 100 contracts under way. The funding in 2011 will allow for a further 60 major public water services contracts to commence construction this year. While the funding available in 2011 is lower than in 2010 , more activity can be achieved, by comparison to previous years, as a result of the more competitive tendering market. In the case of the rural water programme, the main objective of expenditure continues to be the addressing of drinking water quality issues in the group water sector and on smaller public schemes.
The programme for Government commits to the development of a coherent national waste policy, adhering to the waste hierarchy, which will aim to minimise waste disposal in landfill and maximise recovery. I am prioritising this commitment, as I am anxious to provide early regulatory certainty, in the form of both policy and legislation, to ensure the necessary actions and investments are progressed to achieve those aims. I have signed regulations, which transpose the waste framework directive into Irish law, giving statutory recognition to the waste hierarchy. I have also made regulations streamlining and consolidating how we administer hazardous waste movements within the State, delivering an efficiency dividend committed to in my Department's Croke Park action plan.
During the Second Stage debate on the Environment (Miscellaneous Provisions) Bill in the Dáil, I outlined the guiding principles which will inform the waste policy development process. These principles will serve to ensure that future waste policy will be designed to minimise the volumes of waste generated and to extract the maximum value from the waste that arises; founded on a firm, evidence-based understanding of the many scientific, economic and social issues involved; and designed to facilitate necessary investment in infrastructure, within an appropriately regulated waste market framework. I look forward to engaging with colleagues and the range of interests in the waste sector in the development of this policy framework. As part of this process I have also published a discussion document on household waste collection to help inform the development of policy. Next week we will have the opportunity to discuss the Environment (Miscellaneous Provisions) Bill which will deal with the landfill levy.
As members will be well aware, Ireland was slower than many other member states in modernising our policy and legislative frameworks governing the waste sector. While we now have a strong regulatory regime and programme of enforcement in place, we still find ourselves dealing with a range of legacy issues. My Department has provided funding of €93.5 million to date for a variety of legacy activities associated with the remediation of illegal sites, the remediation of former landfills, the repatriation of illegal waste deposited in Northern Ireland and a range of other actions required to respond fully to a significant judgment against Ireland by the European Court of Justice in 2005. It is not possible to be definitive on the matter and it is clear that further significant expenditure in this area will need to be made in the years ahead, including keeping funding in place for 120 waste-enforcement staff.
I have touched on a number of areas in the Department's broad remit with particular emphasis on those with significant financial provisions in 2011 and I ask the Ministers of State, Deputies O'Dowd and Penrose, to complement what I have said regarding their areas of responsibility. I would be happy to deal with matters members may wish to raise during the meeting.