Simon Coveney (Cork South Central, Fine Gael)
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Is the Chairman referring to the 80-20 issue and seeking earlier decisions so people know what they have to spend? My officials have just informed me that we will try and do that at an early stage so that when budgets are being put together in September, there would at least be some clarity as early as July. This might give local authorities some lead-in time rather than obliging them to try to cope with the dramatic change in budget just before they have to put it together. We will endeavour to give a much clearer signal earlier to allow them to plan.

With regard to the rates issue, I share the view that we are raising hundreds of millions of euro through rates each year and it is really only a tool to raise revenue. We could be using rates to do lots of other things. We use tax as a revenue-raising measure but we also use it to change behaviour or incentivise certain types of approaches. Local authorities in different towns and cities should have more flexibility in how they use rates and in how rates are calculated in order that they might be able to encourage certain types of investment. In areas where there is very high unemployment, I am of the view that companies should be given a rates reward for locating into those areas to try and improve the quality of life in certain parts of cities or towns. Likewise, in certain rural areas, if businesses are willing to relocate to locations where there is a real need for investment, I would like local authorities to be able to use rates to try and change that type of behaviour. If businesses are making a significant contribution towards the public realm in terms of the condition of their buildings and contributing to the quality of the main street of a town, I would like there to be a more considered calculation of rates that may go beyond simply the valuation of the property. That obviously opens up a whole debate on how one uses rates. Primarily, we need to make sure that it is business friendly so we are not putting people out of business by overcharging them. However, rates should be a much more significant tool for local authorities to encourage people to locate into areas and to see the kinds of businesses local authorities need on main streets and so on. There will be a consultation process around that and we will have a review. We will not rush it because rates have a big impact on businesses so we need to be careful with how we manage matters. We could and should be doing more to help businesses that perhaps feel they are being overcharged on rates and also to empower local authorities to be able to make more informed decisions about how they use the very significant rats revenue stream to be able to impact on business behaviour and so on. The straight answer is that, yes, we are going to look at that issue and I would like to return to the committee before we make any decisions on it to get some feedback from members as to what they think about that.

With regard to housing taking up a significant part of local authorities' funding, most of the new initiatives for housing involves new money for local authorities. Local authorities need to gear themselves up in staffing and expertise to get back into the business of building houses in order to meet the needs of those on the social housing list. To be fair to the former Minister, Deputy Kelly, he fought for and received a significant increase in capital expenditure for social housing provision which is feeding into the local authority system.

Some 420 staff have also been granted across the local authority system for housing. In terms of staffing ceilings this shows an increased commitment on spend but also increases the capacity within local authorities to be able to respond to the housing needs. I agree that housing is probably a bigger percentage of overall spend in local authorities now but that reflects the priority that needs to be given to the area. It is, currently, the biggest challenge for local authorities in responding to the needs of the people they represent.

A one-off payment of €16 million was made to local authorities last year for the valuation of utilities within local authorities. As this valuation happened mid-stream, or during the year, local authorities were, in effect, asked to cope with something without having had any notice of it. A one-off payment was made to try to recognise that and compensate for it. This is not an ongoing payment that will be made each year. Local authorities will essentially be asked to address their overall financial management in the context of the change that was made last year to the system of rating utilities. In other words, we will not be handing out another €16 million this year.