Dáil Éireann Debate, Thursday - 27 September 2012
124. Deputy Brendan Griffin asked the Minister for the Environment; Community and Local Government the measures he is taking to reduce the administrative costs of local development companies; if he will provide the most up to date comparative data available in relation to administrative costs in recent years; and if he will make a statement on the matter. [41109/12]
Amharc ar fhreagraMy Department does not have a role in setting the overall administration costs of Local Development Companies, as these are independent, private limited companies. There are 51 companies nationally contracted through Pobal to deliver the Local and Community Development Programme (LCDP), on behalf of my Department and 35 Companies contracted to deliver the Rural Development Programme (RDP). It should be noted that the administrative arrangements for each of these programmes are different reflecting the fact that one is grant based (RDP) and the other (LCDP) is service based.
There is an onus on all Local Development Companies to strive to improve service delivery and at a significantly reduced cost to the public purse. One step to achieving this is the reduction in the administrative costs charged against the Local and Community Development Programme. There is currently a cap of 33% in Local Development Companies on the level of funding allocated towards the Local and Community Development Programme administration costs. It is proposed ultimately to cap the level of administration costs at 25% of the overall Local and Community Development Programme allocation. The cap is being introduced on a phased basis over the period 2012 – 2014.
My Department has asked Local Development Companies to consider reducing the costs associated with the running of outreach offices and main offices. To achieve this, the Department has asked the companies to approach their respective Local Authorities to discuss the possibility of providing some assistance in identifying suitable low cost, or no-cost, facilities which might be used by them as a service delivery base within disadvantaged communities.
In light of, inter alia, the fiscal imperative to reduce programme budgets significantly in 2013 and 2014, my Department has also requested Local Development Companies to consider further options to achieve cost savings, including the non-filling of any management team/non front-line vacancies which occur within the companies for the foreseeable future. My Department has also requested companies not to award any salary increases to staff and to ensure that administration costs, operating costs and overheads are kept to a minimum at all times.
The Local and Community Development Programme budget of Local Development Companies is defined in a manner which clearly differentiates overhead from programme costs and all returns are scrutinised by Pobal to ensure that all savings reported are accurate.
There are 35 Local Development Companies also contracted by my Department to deliver Axes 3 & 4 (LEADER) of the Rural Development Programme (RDP). Since the Programme commenced in 2009 the running cost element has registered expenditure of over €48 million. The running costs for the delivery of these elements of the RDP are capped at 20% of the total expenditure over the lifetime of the programme. The table below shows the Administration expenditure per year since the Programme began in 2009 to date.
RDP Administration expenditure
|
2009 to Date |
Administration Expenditure |
|
2009 |
€12,542,386.22 |
|
2010 |
€13,745,043.36 |
|
2011 |
€12,009,671.00 |
|
2012 |
€10,553,961.60 |
|
Total |
€48,851,062.18 |
