Catherine Murphy (Kildare North, Social Democrats)
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The Department has responded to an issue I raised in note 6, which relates to development contributions received by local authorities. I wanted to know whether restrictions were still in place on spending. The correspondence includes a table setting out the amount of income and the audited date available in respect of development contributions for the financial year ending 31 December 2021. In that one year, there are very large sums in respect of some local authorities where there are high levels of development. The third paragraph of the note states:

When a commencement notice is received, contributions collectable within the next 12 months are usually treated as income by the relevant local authority.

However, according to a later paragraph:

The spending of development levies is spending on reserves and impacts on the general government balance [this is the part I was getting to] and was restricted following the financial crisis.

They can take it in but they do not have the freedom to spend what they like at will. It continues:

Local authorities have been directed that, similar to their revenue account activity, capital expenditure should not exceed capital income within the reporting year.

The following paragraph states:

However, within those overall limits, there is capacity for the expenditure of built up capital balances and own resources, or expenditure supported by borrowing...

It seems to me that you can borrow against what you are owed in development levies but you cannot spend the development levy. Am I reading that right? There is a difficulty. If there is a very high level of development in an area and the local authority needs to put in works associated with that development, it has the development contributions but it cannot spend them or it is restricted in how it can spend them. That has been the case since after the crash. In my area, where there is a consistently high level of development, people complain that you get the housing but not everything else; if it follows at all, it comes much later. We see here that when there is money available, there is a restriction on the local authorities from spending the money. Given that the cost of borrowing may get unattractive, this is a balance that cannot be spent but can be offset against borrowing. Maybe I need an interpretation of this or a further interpretation by the Department. As well as the 2021 development levy income, I would like the Department to provide the committee with the 2022 income, when it has it, and to provide us with what is in the local authorities' accounts that is on deposit, as it were. That information would allow us to get a proper picture on this.