Oireachtas Joint and Select Committees

Thursday, 12 March 2015

Committee of Inquiry into the Banking Crisis

Context Phase

Mr. Frank McDonald:

There is no doubt that this was going on, not just in terms of development levies which became a huge source, at least theoretically, of new revenue for otherwise cash-strapped local authorities. There was an incentive for them to grant planning permission because they would get, say, €60,000 or €200,000 in development levies in return. It became one of their major money-spinners during the boom period. Many of these levies, as we now know, were not paid, however, because the market had collapsed and the developers had gone to the wall or whatever.

It was not just development levies. The other factor that played a crucial role in determining whether something was permitted or not was the long-term benefit to the council of the rates revenue that a development could generate. For example, every shop in the huge complex of Dundrum Town Centre is paying rates to Dún Laoghaire-Rathdown County Council. The council, not surprisingly, facilitated that scheme even though it contributed to the death of the Main Street in Dún Laoghaire.

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