Mr. Des Dowling:

I thank the Chairman for giving us this opportunity to brief the committee. We are due to be joined by another colleague, Mr. Aidan O'Reilly, from our community division. He was unable to make it for the starting time, but I hope he will join us later.

We are grateful for the opportunity to brief the committee on the Government's recently launched document, Putting People First - Action Programme for Effective Local Government. We are at the committee's disposal to provide as much clarification as we can with regard to the programme which was published on 16 October following Government approval. We are keen to report to the Minister the views of the committee which could help to inform the more detailed development and implementation of the reform programme. This opening statement outlines the main features of the reform programme. It may help to set out a context for the committee's deliberations. We will be happy to deal as fully as possible with its questions on the contents of the programme. We note the issues the Chairman has drawn to our attention.

The action programme sets out Government policy for reform in all the main areas of local government, including structures, functions, funding, operational arrangements, governance, the role of the executive and the elected council and engagement with local communities. It addresses several fundamental issues in local government structures that have been problematic for several years, including outdated structures and the fact that the functions of local government are much narrower than in most democratic states. It draws on the constitutional status which local government enjoys as the second tier of government in the State. It also recognises the uniqueness of local government compared with other elements of the public service in terms of engaging with the public as citizens, as well as clients or customers.

The programme is based on a strong rationale and purpose for local government which is expressed in the vision for the future of local government set out at the start of the policy document. It states local government will be the main vehicle of governance and public service at local level, leading economic, social and community development, delivering efficient and good value services and representing citizens and communities as effectively and accountably as possible. In keeping with that vision, the document contains a firm commitment that local government will not in the future be bypassed by the establishment of other structures of local administration outside the local government system, unless there is a compelling reason for doing so. The logic of this principle is that it is wasteful and inefficient for local government in Ireland to be under-utilised. Since we have an extensive system of local government that extends throughout the country, with more than 28,000 staff and a total spend of some €7 billion, it should be used as fully as possible to perform the functions of public administration and service delivery at local level. Local government, rather than centralised agencies, should be the first port of call to solve local problems, decide local issues and provide local services. The action programme states the potential of local government will be maximised through effective, accountable representation and efficient delivery of services; a strong sense of local ownership and responsibility; and decision making close to the local community by those who best understand its needs and appreciate its potential.

The programme sets out a course of action to achieve the vision outlined for local government. The qualities and achievements of local government in Ireland are acknowledged, not least the response to the recent financial crisis, in respect of which, despite shedding 25% of staff and making savings of more than €830 million, local authorities have maintained services at a good standard. However, the shortcomings in the system and issues that need to be addressed are clearly and frankly identified. The document identifies a key problem with local government for many years, that is, a lack of confidence and credibility in the system. This was a key reason previous proposals to devolve functions from central to local government came to little. Lack of commitment on the part of central agencies and perhaps unrealistic expectations of what could be achieved quickly were probably also factors. There has been a reluctance to devolve functions that are standard activities of local government in most countries and a view that the current system of local government needs reform and modernisation to build credibility and confidence.

The local government system is often seen as outdated with anomalies, inconsistencies and structural and other deficiencies. These include structures that have changed little since Victorian times; a disparate array of authorities, many lacking the scale or resources to support significant functions; some small towns with their own council, while larger ones are without municipal status; boundaries that bear little resemblance to current realities; some neighbouring authorities that compete instead of co-operate; elected bodies with limited revenue-raising powers and, as a result, limited accountability, responsibility and self-reliance; fragmented operating arrangements, with duplication and diseconomies; and systems of governance, performance measurement and public engagement that have lagged behind best modern practice. The action programme for effective local government aims to address the weaknesses in the system, enhance capacity and improve performance throughout the entire system. This involves reform of all its key elements, including structures, functions, resources, operational arrangements and governance.

Strengthening the role of local government is a fundamental aim of reform. Several measures are being taken to bring this about. Local authorities are taking on key functions in the economic and local development areas. The incorporation of the micro enterprise support function was a landmark decision for local government. This will be augmented by several further enhancements to the economic function at local and regional level under the action programme.

Alignment of the local development and local government sectors will be carried forward on the basis of the report of an alignment steering group which has been published in conjunction with the launch of the reform programme. An initial programme of devolution from central agencies to local level will be undertaken, together with a process of delegation of greater responsibility to local authorities in respect of a range of matters in which they are involved but where there is scope to reduce the degree of central controls. Local authority involvement with other sectors will be increased. An ongoing process of devolution and widening of the role of local government will be implemented as reform of the local government system takes effect and there will be engagement with other Departments to identify additional functions that may be suitable for devolution.

The most fundamental reorganisation of local government structures since the current system began in the 1800s will be undertaken. A number of city and county local authorities will be unified. There will be extensive change at regional level, with rationalisation of structures and updating and upgrading of functions. At sub-county level, a new system of municipal governance will be introduced. The existing local authority towns and larger centres that do not have local authority status will be combined with their natural hinterlands within their own counties to form municipal districts. Members will be elected in the first instance to the district, with the members from all the districts in a county combining to form the county council.

Members will perform a substantial range of functions at district level on a fully devolved basis, including, for example, adoption of local area plans, housing services plans, by-laws, approval of annual roads programmes and so on. Matters of relevance to the district will, as far as possible, be decided by the municipal district council while those of wider strategic interest, such as the county development plan, overall estimates, housing allocation schemes, development contribution schemes, and new functions under the programme relating to economic development plans and local and community plans will be dealt with county level. While a range of reserved functions will be performed at district level, the administrative and operational organisation will be integrated on a county-wide basis and that strengthened resource will be at the disposal of the members at both county and district level. It will be for the members and executive in each county to determine the most effective organisation and delivery of the various services within the county.

The action programme envisages a range of benefits arising from the new arrangements. Anomalies and inconsistencies will be removed and the current uneven assortment of town councils will be replaced by a comprehensive and streamlined system of municipal government closer to the European model. Functions will be matched to structures and resources and duplication will be eliminated. Decision making and the business of councils will be brought closer to local communities. The practice of having duplicate town and county services, multiple processes and documents such as development plans within a county - for instance, as many as ten in Cork and nine in Tipperary - will be ended. Similarly, the practice of people in a town and its suburbs having to deal with different offices will no longer apply. In other words, there will be no duplicate representation in towns.

The action programme confirms that the city or county will continue to be the core element of local government. However, the system will be strengthened by unification of authorities in some areas, while fully maintaining county identities. This process is well under way in Limerick and Tipperary and reports by the implementation groups have been published. The Government has now decided that Waterford city and county councils should also be combined to form a single local authority, with Waterford city at its centre becoming a much more dynamic force for growth in the future. The identity and civic status of the city, including the office of mayor, will be maintained in the new municipal system. This decision is based on the strong recommendation of the statutory committee whose report has also been published. The next phase will be the appointment of an independently chaired implementation group to oversee and guide the reorganisation process.

The Minister will announce the appointment of an independent statutory committee to carry out a local electoral review on which the new municipal districts will be based. Criteria and parameters for the new sub-county system are set out in the action programme and will be reflected in the committee's terms of reference. The electoral review will have a specific goal of achieving better balance and consistency in representational ratios, while taking particular account of factors such as the location of towns and local identities in the new municipal governance arrangement. The terms of reference for the review will contain the parameters defining the total number of seats on each council. These will take account of the significant population changes that have taken place since the current numbers were decided while, at the same time, ensuring adequate numbers for effective representation and governance in lower population counties.

Local government funding, accountability and governance will be strengthened in a number of ways. The combined budgets of local authorities totalled approximately €7 billion in 2011, made up of €4.8 billion of current expenditure and an estimated €2.2 billion in capital outlay. Some 41% of current expenditure is funded from central sources, with the remainder being funded largely by a combination of commercial rates, which accounted for 30%, and charges for local authority goods and services at 27%. The action programme recognises the role of an equitable property tax, which is the subject of a report by an independently chaired interdepartmental expert group, in funding local authority services. The programme also acknowledges the logical link between financial responsibility and local democratic decision making. The Minister has referred to the objective of giving local authorities an appropriate measure of discretion in regard to the level of property tax.

A new system of local government oversight will be introduced, involving the establishment of a national oversight and audit commission. Aspects of the local government audit system will be strengthened. The role and functions of the elected council will be increased and policy-making structures will be reviewed. The local government ethics code will be strengthened and merged into a single national system. Important changes will be made to the directive powers of councillors arising from certain recommendations of the Mahon tribunal. This involves excluding the use of powers under section 140 of the Local Government Act 2001 and decisions involving financial or other benefit to an individual or a specific organisation.

The action programme incorporates a major efficiency agenda, based particularly on implementation of measures arising from the local government efficiency review. Significant annual savings will be achieved through efficiency measures and workforce planning in local authorities. There will be a more robust system of performance monitoring with a focus on key indicators, outcomes rather than outputs, value for money, and comparative performance of authorities. Customer service arrangements in local authorities will be further enhanced. Ways of promoting greater community and citizen engagement with local government will be explored, and local authorities will be required to provide better quality public information. It is estimated that the measures outlined in the programme will lead to savings of more than €400 million per annum when all the reforms are in place. These will be enduring savings in the budgets of local authorities.

The Government has decided that changes such as the introduction of an office of directly elected mayor in Dublin, as has been suggested, should not take place without a more fundamental, rigorous review of local governance generally in the area. It has, therefore, decided that a forum on local governance in Dublin should be convened. Based on these deliberations, proposals will be put to a plebiscite in conjunction with the 2014 elections. However, the electoral review will be based on increased representation in the Dublin areas, to address current high ratios of population to councillors. The question of replacing sub-county structures does not arise in Dublin as in other counties. However, the county councils will be given power to operate a system of devolved decision making at electoral level if they so choose.

The shape of future governance arrangements in Dublin will depend on the outcome of the proposed forum. However, the action programme indicates there is a case in principle for a metropolitan council or assembly, but only in the context of revised and efficient local governance arrangements. Such an authority would need to have significant functions and budget, with the possibility of a directly elected mayor, depending on the outcome of the forum and a subsequent plebiscite. Functions and funding would inevitably come from transfer from the current local authorities and central Departments and agencies. The types of sectors from which metropolitan level functions might, in principle, be drawn include transport, economic and spatial strategy, education, policing, emergency planning, waste management and a co-ordination and oversight, or "call-in", role in respect of certain local authority functions having a metropolitan impact. Proposals for revised local government arrangements in Dublin must, however, take account of cost implications and will be subject to prevailing economic circumstances.

Implementation of the reforms will be challenging, both at local and national level, requiring a major programme of legislation and reorganisation in the coming years. It is essential to deliver that programme successfully ahead of the 2014 local elections. Indeed, some elements, like the electoral review, must be completed at least 12 months in advance of those elections. As well as implementing significant changes from 2014, the action programme has the objective of positioning the local government sector for continued development.

By putting in place stronger structures, functions, resources, governance and operational arrangements, the reforms should enable the local government sector to play a much wider and more effective role in the longer term, with the possibility of taking on a much wider range of functions of the sort that local authorities perform in other European countries.

The reform programme will move quickly to the implementation phase and there will be opportunity for interested parties, including the committee, to make an input particularly in the context of the legislation. Today's meeting is a very good way of beginning that process. My colleague, Mr. O'Reilly, has now joined us.