Catherine Murphy (Kildare North, Independent)

I thank the Ceann Comhairle for allowing me to raise this important matter.

The way in which local authorities are funded has a bearing on their ability to deliver services. I will focus on developing counties such as Kildare. The needs and resources model of funding is a historical one. When it was put in place guarantees were given that no council would lose funding. This guarantee automatically placed growing counties at a disadvantage. While the fund has increased over the years, it is not fairly distributed.

I will outline several practical examples of this unfairness. Kildare County Council does not produce water but buys it from Dublin City Council and Fingal County Council. Given the county's rapid increase in population, the cost of buying water continues to increase. The 2002 census bears no relation to the current population of County Kildare, which has increased by at least 30,000 in recent years. This has resulted in the county's funds being stretched even further.

While the people of County Kildare are delighted that several new, albeit long overdue, playgrounds have been built, these facilities are expensive to supervise and maintain and receive no funding for maintenance until they are in place and costs can be calculated. The problem with this approach, however, is that there is no guarantee that these costs will ever be included in maintenance funding. In other words, councils take a gamble when they introduce new services.

Yesterday, during the debate on housing Deputy Fleming criticised some councils for not including sufficient funds for disabled person's grants, for which one third of the cost must be covered by local authorities. The reality is that Kildare County Council has little discretionary spending. Counties Laois and Offaly, on the other hand, do very well from the local government fund and have lower than average commercial rates, which indicates the discrepancy between councils and the improvements that could be made.

I have analysed a series of figures. Allocations under the local government fund in 2004 indicates that south Dublin receives the lowest per capita transfer at €97, while County Kildare is third worst off. The highest per capita amount is paid to County Leitrim which receives more than €500. The figures demonstrate the considerable variations between local government fund allocations.

A second set of figures relates to the disabled person's grant. County Kildare receives a per capita allocation of €5.70, the lowest in the State, while Leitrim, at €103 per head of population, again receives the highest allocation. The key issue in this regard is discretionary spending and the failure to understand the dynamics of a growing area. When calculating budgets, certain items, for example, salaries, pensions, insurance, loans, materials, heat and lighting, must be included. However, it is only when one examines areas over which one has discretion that the budget becomes interesting. In a wealthy economy the public has a right to expect services in discretionary expenditure areas, such as community and leisure facilities, libraries, traffic calming and management, but it is in these areas that counties with growing populations are paying the price in terms of a lack of funding.

I have also analysed levels of commercial rates. The business sector is critical of increases in rates above the rate of inflation but frequently the choice facing local authorities is whether to reduce services or increase commercial rates. The Minister will no doubt provide figures to show how much the local government fund has increased over the years. It is sobering to note, however, that when I examined the allocation for County Kildare under the fund last year, it was only sufficient to buy additional water for new residents and pay increased costs arising from upgraded wastewater facilities and benchmarking and did not allow an increase in discretionary funding. This is indicative of the problem I have highlighted.

I ask the Minister for the Environment, Heritage and Local Government to bring the issue of discretionary spending before the Government. Areas such as Kildare, west Dublin, Meath, Wicklow, Louth and north Wexford are entitled to equity in services. It will not be possible to ensure such equity until the disparities in the funding model used is addressed. I ask the Minister to do so.

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