Oireachtas Joint and Select Committees

Tuesday, 3 March 2015

Committee on Environment, Culture and the Gaeltacht: Select Sub-Committee on the Environment, Community and Local Government

Estimates for Public Services 2015
Vote 34 - Department of the Environment, Community and Local Government (Revised)

5:10 pm

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail) | Oireachtas source

I will follow the order in the Minister’s opening statement, starting with local government fund payments. Notwithstanding that the Department is no longer paying the general purpose grant to replace the local property tax allocation, the local government fund is being robbed of the rates associated with Irish Water. Even at that, the valuation throughout the country is €60 million. In early December the Minister gave me details of the rate applicable in each county, which brings the total figure to €48.7 million.

The estimate valuation of the assets on transfer was €11 billion. Now we see applicable commercial rates of only €59 million or €60 million. If I look at my constituency, the rate bill in Offaly was €15,000 for last year. There was a lot of money spent on building new plant during the course of the past ten years in the county. It amounted to a multiple of millions; far in excess of €1 million. The general rule of thumb one might expect on commercial rates on property is 1%. When the figures are €11 billion and €59 million, something does not add up.

This plays into the subvention issue and the ongoing process on whether we are on or off balance sheet to be adjudicated by EUROSTAT. We never paid the commercial rates of the ESB, Bord na Móna or the parent entity of Irish Water, Bord Gáis. However, the Government is subventing the commercial rates which were to accrue to the local authorities. This is one issue. The local government fund is another issue. I would have expected a lot more funds to accrue to the revenue streams of the local authorities. This is not the case.

As we know from the Taoiseach's response to a parliamentary question tabled by Deputy Fleming, Fianna Fáil's spokesperson on public expenditure, there is a delay concerning the process involving EUROSTAT and the CSO. The CSO continues to deliberate on the process of making the application to EUROSTAT. We now understand that this will not be returned until June at the earliest, which is a bit longer than we had expected. However, it is vital that we state definitively if €59 million is or is not the exact figure. If it is not, and if it is to increase in the coming year further to continued re-evaluations - it has been completed in only three counties - will the local authorities, which have a wrong rate at present, be reimbursed in the future? The other issue is the on-off balance sheet issue. It may be no harm if it is off balance sheet or if it is on balance sheet because it would be two and a half times less than what Irish Water is paying for the €300 million it borrowed recently. This is my question on the local government fund.

What level of subvention cuts, if any, are being rolled out to the group water schemes in the coming year? What process or level of finance is being put in place for subvention levels to proposed new group water schemes in the future? Are there any changes to the mechanisms which were in place prior to this?

On community and rural development, when will the new social inclusion and community activation programme, SICAP, be rolled out? Is money being put aside for potential legal action which may arise from the tendering process? I am not being facetious, but rather I am conscious of the representations I am receiving from many of the staff in the various programmes throughout the country who are worried and nervous that their role will be diminished by this new body. Will the same level of funding that was there in the past be put in place? Is there a threat to the existing employment rights of those who are involved in various schemes which will now fall within the remit of SICAP?

Will the Minister address the issues raised about the local government fund and, in particular, the commercial rates that have been apportioned to the assets that are now in the ownership of Irish Water. The payments to local authorities are far less than I had expected. It could be argued that this is the difference between passing the EUROSTAT test or not. It, therefore, needs to be clarified.

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