Dáil debates

Thursday, 23 October 2008

Priority Questions

Local Authority Funding.

3:00 pm

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 5: To ask the Minister for the Environment, Heritage and Local Government the finance available via the local government fund; the impact reduced funds will have on services administrated by local government; and if he will make a statement on the matter. [36817/08]

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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In 2009, some €1.6 billion will be available for allocation via the local government fund. General purpose grants are the contribution my Department makes to local authorities to meet the gap between the cost to them of providing a reasonable level of day-to-day services and the income they obtain from other sources. A total of €935.2 million in general purpose grants will be provided to local authorities from the local government fund.

The fund also provides significant funding to local authorities for the improvement and maintenance of local and regional roads. An amount of €564.5 million has been allocated to the Department of Transport from the fund for 2009 for this purpose. An additional amount in the region of €80 million will be allocated for particular purposes including the operation of water services, group water schemes and the vehicle registration unit.

General purpose grants are important in assisting local authorities to balance their budgets. However, they comprise only about one fifth of the funding required by authorities to provide their day-to-day services, although the proportion varies between authorities. Local authorities receive income from a range of sources including rates, charges for goods and services, specific State grants and general purpose grants from the local government fund. It is a matter for each local authority to prioritise its spending within the resources available to it, across the range of services it provides. Equally, local authorities must ensure full value for money for the resources invested and seek the maximum efficiency across their operations. I am satisfied that the general purpose allocations provided for 2009, together with the income available from other sources, will enable local authorities to provide an acceptable level of service to their customers.

4:00 pm

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister will be aware that the local government fund is down 5% on what it was last year. Also, there has been a 6% reduction in the Estimates for local government despite the fact that a 5% decrease was provided for in the Estimates volume pre-budget. I am not sure if the amount has been subtracted from or added to since then. We will not know the position until the Finance Bill is published.

Will the Minister clarify if he proposes to prioritise additional resources for the home improvement scheme for the elderly and disabled and for the adaptation grants scheme, which is under pressure in each local authority area? Every local authority has received a flood of applications in this regard. We should either allow people in the local authority system to issue letters of approval in order that works can be undertaken or we should scrap the scheme. While I acknowledge the scheme is now much more attractive, following changes introduced last year, funding has not been increased and this has resulted in a huge backlog of applications. Whereas previously people could get only a €5,000 to €6,000 grant, they can now get up to €20,000.

Does the Minister plan to encourage the rationalisation of quangos across the board in other Departments or at local level in an effort to make savings?

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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First, I must correct the Deputy in respect of his estimate of the reduction in the local government fund for 2009. Some €1,580 million is available to the local government fund in 2009, a reduction of 1.4% when compared to the total of €1,603 million expected in 2008.

The Deputy may have been referring to the general purpose grants for which I will now provide the figures. The total amount allocated to general purpose grants for 2009 is €935.2 million, a reduction of 6.4% on the record amount of €999.2 million allocated in 2008. The Deputy also asked about a number of matters which come within the bailiwick of my colleague, the Minister of State with responsibility for housing, Deputy Michael Finneran.

I am trying, as best I can, to ensure a sound economic base for local government. The Deputy will be aware the current system is strange in that part of the money received from motor taxation goes to local government. This is one of the reasons — I was up-front about this — for the increase in motor tax which will go to the local government fund. This measure was actually opposed by the Fine Gael Party.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is correct.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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One cannot have it every way.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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That is correct.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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One cannot oppose a measure and then direct councillors, as I understand Fine Gael has done, not to co-operate in regard to the striking of a rate.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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That is not what I said. I will send the Minister a copy of the letter.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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Let us try to interpret it benignly. Fine Gael is trying to ensure there is no major rate increases for businesses. I agree with the Deputy on that point.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Good.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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However, if Fine Gael is trying to incite councillors not to co-operate in the striking of a rate, I would regard that as the height of irresponsibility.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I will allow a brief supplementary from Deputy Hogan.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Perhaps I can clarify the position for the Minister who is, in his usual way, trying to twist what was said.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Hogan should be asking rather than answering questions.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I suggest that the Minister reads accurately what I said.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I read about the matter in a newspaper.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I know the Minister reads the papers every day. He has many people available to him to provide him with cuttings from the papers. However, I suggest he reads the article accurately. Fine Gael takes seriously its responsibilities at local level. We want to ensure charges for commercial rate payers and customers of local government services remain low.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy must ask a question.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Does the Minister agree with this? Also, will he indicate if he has plans to increase the resources of the various schemes under the remit of his Department in respect of housing for elderly and disabled people?

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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As the Deputy will be aware, I am trying to broaden the revenue base of local authorities. We are commencing the process this year with the introduction of the €200 levy on second properties, some of which are holiday homes. It is hoped this will net €40 million, although the final amount could be higher. This is an innovation which I hope will start the process of broadening the financial base for local government. I agree with Deputy Hogan that there is too much of a burden on some rate payers.