Joe Flaherty (Longford-Westmeath, Fianna Fail) | Oireachtas source

While the revision in the property tax bands is largely a good news story for the people of County Longford, on a personal level there is concern about the threat to future funding of Longford County Council as a result of the proposal. At present, just over 17,000 properties are registered in County Longford for the LPT and 79% of them or more than two thirds of the properties are in the lowest band, that is, bands 1 and 2. In the proposed bands, more than one third of Longford households will face a smaller LPT bill. The reality is that 99% of properties will pay the lowest LPT charge under the proposals. That in itself is welcome news but there are unnecessary consequences for Longford County Council with a sudden shortfall of €1.5 million in revenue arising from the changes.

For several years, the council has leveraged a maximum 15% increase in local property tax. This in turn has enabled it to borrow and finance an ambitious capital regeneration programme. All of that is now very much in doubt. This is an issue of major concern for the management of the council. For the council to offset the €1.5 million shortfall in LPT revenue, the county would need to see an additional 10,500 new houses in the county, which is unlikely in the extreme. I welcome an assurance from the Minister that no local authority will be worse off because of the proposed changes to the LPT. As it stands however, Longford County Council is facing a €1.5 million shortfall under these proposals.

We must also address concerns regarding equalisation funding. As much as 14% of the funding for Longford County Council arises from the LPT equalisation process. Some 11 counties, including the local authority in Longford, will be penalised if there are changes to the equalisation model. I ask the Minister to have a careful look at that. At the very least, we need a commitment that hard-pressed local authorities such as Longford County Council will not have to pay an unconscionable price in the LPT revision proposals.

I wish to also address another issue that is on my mind that concerns Longford County Council. It is one of the most challenged counties in the country when it comes to its finances. Notwithstanding such a low revenue-generating base, it had an ambitious capital programme over the past six years. That bears testimony to the expertise and resolve of the local authority's senior management team. Over that period, it has emerged as one of the fastest growing and most industrious local authorities in the country. It has more than doubled its annual expenditure from €37 million in 2006 to €77 million last year, a 115% increase. Key financial challenges however include the low value of the LPT base but also a low rates base and high vacancy rates. The loss of €1.2 million in rates as a result of the closure of the ESB power station in Lanesborough has been a major challenge. That is the equivalent of 15% of the total rates base for the county or is indicative of the financial contribution of the average 661 rate payers in the council. If the council were to set about compensating itself for this shortfall it would result in an unthinkable 15% hike in rates in the current financial climate.

I thank the Minister for Finance and his colleagues, the Ministers for Public Expenditure and Reform and Housing, Local Government and Heritage who collectively provided €1.2 million to the council this year to head off the loss in revenue. The report of the just transition commissioner, Kieran Mulvey, stated:

It would be extremely unfair in circumstances over which...[Longford County Council]...had no responsibility and for a decision which was not expected until 2027 that they should be burdened with this sudden loss.

I recommend that an urgent engagement takes place with the...[local authority and]...the funding Departments so that a suitable emergency arrangement can be agreed to alleviate the rate losses over the period 2021-2026.

I am afraid the just transition has had an unconvincing start. The Government must send a strong message of solidarity to the midlands, specifically counties Longford and Offaly. A budgetary undertaking later this year to underwrite the annual €1.2 million rates shortfall for the next five years would certainly go a long way to providing the solidarity and assurances that Longford County Council desperately needs at this time. I appreciate that I have strayed from the LPT, but I am sure the Minister will appreciate that this is a major issue for the council, and I hope he will pursue it in his budget 2022 deliberations.

See this speech in context