Dáil Éireann Debate, Tuesday - 14 July 2020
386. Deputy Donnchadh Ó Laoghaire asked the Minister for Housing, Planning and Local Government if his attention has been drawn to the financial challenges of Cork City and County councils; and if he is considering direct financial support in view of the loss of key income streams. [14658/20]
Amharc ar fhreagraI intend to continue to support measures taken by my Department to assist local authorities, including Cork City and Cork County Councils, with the financial challenges they are experiencing since the outbreak of the Covid-19 pandemic.
At the outset and to minimise cash flow challenges, my Department arranged for the early payment of Local Property Tax (LPT) to all local authorities. As a short term measure, €136m was made available to local authorities as cash flow support in early April, in order to ensure that vital services that local authorities deliver can be maintained. This support was comprised of the early payment of the LPT allocation ordinarily paid from the Local Government Fund in May and July. Further to these measures, my Department arranged for the payment of 50% of each local authority’s individual Payroll and PSPR allocation, amounting to €54.8m, in mid June. This interim payment would ordinarily be paid later in July.
On 2 May 2020, a waiver of commercial rates was announced for businesses that were forced to close due to public health requirements, from 27 March 2020, for a three-month period. The administration by local authorities of this measure will be by way of a credit in lieu of commercial rates. The approved Programme for Government – Our Shared Future, commits to setting out how commercial rates will be treated for the remainder of 2020, as a priority action for the new Government. This is under active consideration in the context of the July stimulus.
In addition to the challenges faced from Covid-19 there are financial implications to the two authorities arising from the boundary alteration between Cork City Council and Cork County Council. The Local Government Act 2019, which provided for the boundary alteration, also provided for a financial settlement to be agreed jointly by the local authorities in accordance with a statutory Implementation Plan. The financial settlement is made up of two parts; an annual contribution, and a financial adjustment that caters for future adjustments. The annual contribution methodology has been agreed between the two authorities, and is currently the subject of independent audit and verification. The financial adjustment is also close to agreement and I expect to have final confirmation of agreement in the coming weeks.
A separate provision in the Local Government Act 2019 provided for a recoupment to Cork City Council in respect of income incurred from May 2019 to December 2019. The transfer of administrative responsibility caused by the boundary alteration took place on May 2019. Financial responsibility did not transfer until 1 January 2020. The city took over full responsibility for the delivery of services on 31 May 2019, but the county continued to be the rating authority until the end of 2019. Agreement on the amount to be recouped is also expected in the coming weeks.
