John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank the Deputies for raising this issue. Deputy Connolly was probably attending the Committee of Public Accounts meeting last week when the Galway Deputies, and some strays from Roscommon, attended a meeting about the Local Government Bill 2018. It particularly focused on funding but also dealt with other issues. I have held this office for a little more than a year and the funding measures relating to the Galway County Council have been raised on many occasions by Members of both Houses.

The funding system that applies to local authorities is complex, as authorities derive their income from a variety of sources, including commercial rates, charges for goods and services and funding from the Government. Local authorities vary significantly in size, population, public service demands and infrastructure. It is not possible to compare absolute levels of funding received in local authority areas as to do so would not take account of the significant differences between them. Government funding of local authorities similarly presents a complex picture, with transfers coming from a wide range of Departments and offices and not solely from the Department of Housing, Planning and Local Government. Most of the funding sourced from the Government and provided to local authorities must be used for specified purposes and services. In 2017, funding from Government sources to local authorities totalled more than €2.66 billion.

My Department has a wide agenda, including the targeted provision of a range of necessary housing supports. To deliver on this agenda, the Department allocates significant resources to local authorities and channels local property tax receipts to those authorities, the use of which is largely at the discretion of individual authorities. Funding from the Department to Galway City Council totalled €18.6 million in 2016, €25.7 million in 2017 and €22.3 million to date in 2018. In the case of Galway County Council, a total of €71.8 million was provided in 2016, €86.2 million was provided in 2017 and €87.8 million has been provided to date in 2018. This must be recognised as significant funding. I work closely with all local authorities to ensure the local government sector generally, and local authorities individually, have the financial wherewithal to meet existing and emerging challenges. In doing so, I must operate within the parameters of the national fiscal and budgetary situation and competing priorities.

Local property tax, LPT, payments replaced general purpose grants in 2015. The role of local authorities in deciding the local adjustment factor for LPT, up to 15% annually, is vital. The decision provides an important connection between local revenue raising and local expenditure. While Galway County Council increased the LPT by 10% for 2018, by not doing so for 2019 the council has forgone €2 million of additional revenue for 2019. The adoption of a balanced budget is probably the single most important duty that the elected members are called upon to carry out each year. To achieve that balance, the members must make informed and necessary choices to balance the level of service provision with the available income, prioritising as necessary. Galway City Council adopted its budget for 2019 last week and the county council is scheduled to hold its budget meeting next Friday.

A review was established to examine local authority baseline funding more generally and to develop a methodology for distributing any available additional funding to achieve a greater balance and equity of funding outcomes. This work is almost complete and I will provide further information in due course. Separately, the expert advisory group on local government arrangements in Galway, in its report in April this year, recommended that ahead of the amalgamation of Galway city and county councils existing deficiencies in respect of both human and financial resources be expeditiously resolved as an essential prerequisite to the amalgamation process. Both the city and county chief executives participated in the group and endorsed its recommendations. My Department is currently engaged with Galway County Council with regard to additional funding, which was discussed at the meeting last week, and will continue to engage constructively in that process over the coming weeks.

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