Paudie Coffey (Waterford, Fine Gael) | Oireachtas source

I am taking this Topical Issue on behalf of the Minister for the Environment, Community and Local Government, Deputy Alan Kelly. I thank the Deputies for providing me with an opportunity to clarify the position on the financial difficulties of Sligo County Council. The continued deterioration of the council's financial position is of serious concern to the Minister, notwithstanding the achievement of savings in recent years, as outlined by the Deputies. On Thursday, 13 November, the Minister met the chief executive of Sligo County Council and his senior management team to discuss these very issues. It was a constructive and useful engagement.

The council has been incurring revenue deficits for several years such that the cumulative deficit now stands at €19.67 million. Long-term debt is in excess of €120 million. It is a matter for each local authority to determine its own spending priorities in the context of the annual budgetary process, having regard to Government policy and 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, which include adopting the annual budget and authorising borrowing.

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Elected members are democratically accountable for all expenditure by the local authority. The Minister wishes to be clear that the financial difficulties of Sligo County Council have not been caused by the financial model used to fund local authorities. While it is true that general purpose grant funding to Sligo County Council has decreased from a high of €22.22 million in 2008 to €15.58 million in 2013 - not halved, as Deputy Colreavy stated - this reduction of 29% has been less than the national average of 35%. Local authorities are independent bodies, with members being responsible for budgetary and borrowing policies, and Sligo County Council has had the same requirements regarding implementing Government policy placed on it as all other local authorities.

Other factors such as poor income collection have significantly contributed to Sligo County Council's financial difficulties. The commercial rates collection level for the county and borough in 2012 was 62% compared to a national average of 75% and the council's collection level declined even further to 59% in 2013. Sligo County Council has an uncollected rates debt of €6.8 million. Its water collection levels have averaged 48% over the period from 2008 to 2012, resulting in an estimated loss of income of over €1 million per year. Collection levels for housing loans are also poor, at 47%, with arrears of €1 million. Housing rent income collection is 80%, which is below the level achieved by comparator local authorities.

While it is a matter for individual local authorities, including Sligo County Council, to manage their day-to-day finances in a prudent and sustainable manner, the Department is in regular consultation with the council regarding its financial position. The Minister has set aside an allocation of €1 million in additional funding for 2014 for Sligo County Council to assist it to take the steps necessary to move to a more sustainable financial position. The payment of this is fully conditional on a realistic and achievable financial plan, which charts a path to long-term financial sustainability, being agreed between the Department and the council. Financial stability must take precedence in all of Sligo County Council's planning in the coming years. It is essential that the 2015 budget addresses the gravity of the financial situation in Sligo County Council, building on the savings achieved to date.

The Minister and the Department are committed to continuing to support the council in its efforts to restore financial stability. However, as the Minister pointed out at his meeting with Sligo County Council, the next steps need to be taken by the council, through a firm commitment, reflected both in its budget for 2015 and through the agreement of a long-term financial plan with the Department. By ensuring Sligo County Council is supported in making these difficult decisions that will, in the longer term, place it on a more realistic and sustainable path to growth and renewal, the Minister is certain Sligo can put its difficulties behind it and focus on consolidating its position as a leading economic centre for the north west in the future.

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