Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank the Deputy for giving me the opportunity to outline for the House today the importance of motor tax revenue in supporting local government in general and particularly in providing funding in respect of the local and regional road network.

The estimated income to the local government fund in 2014, as set out in the Revised Estimates for Public Services 2014, published by the Department of Public Expenditure and Reform, is €1.71 billion. This includes motor tax receipts of €1.16 billion, which will contribute over two-thirds of the fund's estimated income in 2014. The balance of the fund's income will be made up by local property tax received in 2014 and interest earned from local government fund moneys invested with the National Treasury Management Agency.

A number of factors have an impact on the level of motor tax revenue collected each year. The Non-Use of Motor Vehicles Act 2013, which came into effect on 1 July 2013, introduced new arrangements which only allow for prospective off-road declarations by vehicle owners; these have been fully in force since 1 October 2013. The primary purpose of this legislation is to provide for a system of declaring vehicles off the road in advance for motor tax purposes. This closed a loophole whereby owners could declare retrospectively that a vehicle had not been in use on the public road, which was unverifiable.

Other factors that determine the level of motor tax revenue include the increase in rates announced in the December 2012 budget and the year-on-year reduction in income arising from the private vehicle fleet due to the switch-over from motor tax based on engine capacity to that based on CO2 emissions, given that vehicles taxed under the latter regime carry a lower average annual tax rate. Motor tax income in 2013 was €1.13 billion, compared to an estimated expected level of income of €1.16 billion in 2014. I will consider, in conjunction with the Minister for Transport, Tourism and Sport, measures to evaluate the effectiveness of the new provisions for off-road declarations in due course.

In respect of expenditure from the local government fund, an amount of €363.9 million has been allocated to the Department of Transport, Tourism and Sport from the fund for 2014 for roads and public transport infrastructure. With effect from 1 January 2008, responsibility for regional and local roads was transferred to that Department and it now has responsibility for the allocation of regional and local road grants to local authorities. A further €12.5 million is allocated from the fund to the Minister for Transport, Tourism and Sport for management of the national vehicle and driver file.

The local government fund provides general purpose grants to local authorities to support their general operational activities. It is estimated that €281 million will be provided in 2014. I also expect that the fund will provide up to €486.5 million to Irish Water in 2014. This amount will fund the water-related expenditures incurred heretofore by local authorities and met by them from their own resources and general purpose grants.

The total estimated expenditure from the local government fund in 2014 also includes a payment of €600 million to the Central Fund and a further €35 million for other local authority projects including shared services.

Local authorities have statutory responsibility for regional and local roads with funding being substantially met from grant programmes administered by the Department of Transport, Tourism and Sport. However, current overall funding requirements are met from both grants and local authorities' resources. It is a matter for each local authority to determine its spending priorities in the context of its annual budgetary process having regard to both locally identified needs and available resources. The elected members of a local authority have direct responsibility in law for all reserved functions of the authority, including adopting the annual budget, and are democratically accountable for all expenditure by the local authority. Councillors, by reserve function, adopt their annual budgets based on what they see as their local priorities.

The Government continues to be committed to maximising the funding available to local authorities from the local government fund to support the provision of local services to our communities, including the maintenance of the regional and local roads network. The National Roads Authority's primary function is to secure the provision of a safe and efficient network of national roads. I take on board Deputy Jim Daly's message that when people see the money from their area going into the Central Fund the large counties are often expected, in the interest of the common good, to take up some of the financial obligation of small local authorities or areas with small populations. The same argument could be made about the local property tax. That was always the case and it is a difficult matter for the counties involved. It is for Cork County Council to prioritise local roads, the drainage works required to alleviate the storm damage of recent months and the programmes that are available in addition to the allocations to Cork County Council, and ensure personnel are on the roads dealing with the particular drainage problems he identified.

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