Thomas Gould (Cork North Central, Sinn Fein)
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I spent 11 years as a councillor. We have many fine Sinn Féin councillors in Cork. I know what I am saying when I say that Cork City Council is on its knees financially and needs Government support. Cork City Council has a budget deficit of €2.5 million, excluding the rates deficit. Without support from central government, ordinary people and families will lose out yet again at the hands of Fianna Fáil and Fine Gael. Those parties are only too happy to bail out banks and big business, but not local authorities.

The Government has failed to support local authorities and now Cork City Council has been forced into proposing a rent increase for those in social housing who are some of the most vulnerable people in Cork and also major budget cuts for housing maintenance and other services. Will the Government help by bailing out local authorities the way the Minister of State's party bailed out the banks?

Pa Daly (Kerry, Sinn Fein)
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Bhuail mé Dé Luain le bord bainistíochta Chomhairle Chontae Chiarraí agus dúirt sé go bhfuil stádas an bhuiséid go dona ar fad i gCiarraí. Is contae ar an imeall é Ciarraí, le trí leithinis, agus tá an méid is mó bóithre nach príomhbhóithre iad sa Stát ann. All Deputies from the county met officials from Kerry County Council on Monday. As the Minister of State will know, Kerry is a county with a high degree of peripherality. It is also hamstrung by three peninsulas with regard to services. It has most non-national roads in the State per head of population and the fifth highest housing stock in the State. A special intervention is necessary to make up the €13 million or €14 million shortfall in next year's budget. What are called discretionary services, such as lighting, roads and disabled grants for people's houses, will be cut without a special intervention.

Rose Conway-Walsh (Mayo, Sinn Fein)
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It will be no surprise that I will talk about Mayo County Council and the people of Mayo. The estimated 2021 Covid impact is €7.2 million, which represents 68% of the €10.6 million discretionary spend which will trigger severe austerity unless the gap is filled. This will affect local roads in one of the largest counties in the country. We need to remember that people are already paying property tax. Many of them do not have proper access to their houses. Issues relating to housing maintenance will impact particularly on the elderly, the most vulnerable and the disabled. We need to step in now. I ask the Minister of State to step in to support these people given the financial impact of Covid on Mayo County Council.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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As the Minister of State will be aware, my constituency is a very rural one. In recent years, even Sligo County Council has been unable to help people out and pay housing grants that are normally supplied in most councils because it has no discretionary fund in place. Leitrim County Council is in a similar position and is under serious pressure, as are all rural local authorities. The reality is that 80% of the fund the Government gives to local authorities must be used for items that are already earmarked. Therefore, there they have very little discretion in spending that fund. I spoke to the chief executive officer of Leitrim County Council earlier today. He told me that in his estimation the local authorities would need to get an increase of €300 million in next year's budget and probably a further €200 million in the following year to deal with the crisis they are facing now.

This crisis has come about because many of the businesses from which they need to get rates are unable to pay those rates because they are not in business due to Covid. In addition, many people in local authority housing are really stretched to pay their rents. Many people also need other business services but they cannot get any money from them. Even parking charges in towns are not bringing in money. The Minister of State will understand that this is a real crisis. I would appreciate if the Government would make a real effort to try to deal with it.

Peter Burke (Longford-Westmeath, Fine Gael)
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I ask Deputy Gould to reflect on his political history because my party did not bail out the banks. He should get his facts right before commencing this debate.

I thank the Deputies for giving me the opportunity to speak on the importance of local authority funding and on the ongoing impact of Covid-19 on local authorities, and in particular their finances. The challenges are common across the local government sector, notwithstanding the differences between urban and rural authorities in scale and sources of funding. I addressed some of these issues in the House as recently as last night, and while there have been no significant developments overnight, I welcome the chance to hear Deputies directly on the financial issues.

I want to reassure the House that my Department and I are continuing to make the case for the local government sector in the context of budget. In this regard, the Department is engaging intensively with the Department of Public Expenditure and Reform on the financial challenges facing local authorities as a direct consequence of the pandemic, both in terms of additional costs incurred as part of the strong local government response, and declines in local authority income streams. These matters are under active discussion.

My Department is also working closely with the local government sector on these financial issues to secure additional support for local authorities and to ensure that any additional resources that may be available are appropriately targeted where they are most needed. It is my intention, as part of this process, to ensure that local authorities, particularly those that suffered the impacts of the previous economic downturn most acutely, can recover as quickly as possible in order to drive local economic activity, and avoid significant deficits and additional debt as a consequence of the Covid-19 pandemic.

In this regard, it is also important to recognise the role of elected members in the financial affairs of local authorities. The adoption of a balanced budget is probably the single most important duty that elected members are called upon to carry out each year. I fully recognise that this process is likely to require tough decisions by elected councils in the coming weeks. While the Government is keen to support the local government sector and is working towards that end in the context of the forthcoming budget, it is important to reflect on the role of elected local authority members, who are best placed to determine the spending priorities in their respective counties.

5 o’clock

This is also a reserved function and local authorities must balance those priorities against available resources. To achieve that balance, the elected members must make informed and necessary choices to balance the level of service provision with the available income. In advance of budget 2021, I note that 22 of the local authorities throughout the country have opted to vary their local property tax, LPT, upwards while only three have opted to vary it downwards. Arising from these variation decisions, the local authority sector will gain an additional €11.5 million from LPT next year compared with 2020. The elected members will now have to make decisions on how to balance the expenditure element of budget 2021 in line with the increase in LPT income. Some authorities have already indicated to me that, in the event of the pandemic remaining a national issue in the medium term, it will be extremely difficult to present members with a balanced budget given the negative impact on certain services and income streams and also the increased expenditure required across an array of different services. Notwithstanding that, the adoption of a balanced budget remains a requirement and I am confident that elected councils throughout the country will rise to the challenge and meet the requirements over the course of November.

Thomas Gould (Cork North Central, Sinn Fein)
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I will clarify something that the Minister of State perhaps does not know or has forgotten. Was it not a Minister from his party who gave banks 20 years tax-free on their profits? Perhaps I am wrong but I do not think so. The Minister of State can check that out. Cork City Council has increased the local property tax by 7.5% which should bring in an additional €1.5 million but there will still be a shortfall of €2.5 million. The question for the Minister of State and the Government is whether they will betray local authorities this year, as they have done for years. There have been no traffic calming measures in Cork city for the past seven or eight years due to the lack of funding from central government. That is only one of a list of issues. Are we going to close libraries and cut back funding for parks and playgrounds? The Minister of State has a lot of questions to answer.

Pa Daly (Kerry, Sinn Fein)
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I am disappointed there are not any concrete proposals but I hope that next week there will be something extra in the budget for local authorities. I hope this does not go the way of the local authorities in England where Tory cuts and a lack of central government funding have been a disaster. Kerry County Council has been attempting to drive the local economy. It has been applying to establish walkways and greenways to give people hope that tourism will come back in greater numbers because it is so vital to the county. Funding of €11.5 million to be shared among local authorities is unfortunately of no use to County Kerry when it will have a €13 million or €14 million shortfall this year.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I am disappointed with the Minister of State's answer. We cannot lay this issue at the feet of elected members of county councils. They cannot manage the austerity that is being imposed upon them and nor can the people whom the Government is trying to get to empty their pockets again. These are people who have lost their jobs during the pandemic and are already suffering severe financial stress. We cannot go back to them and ask for more. It is completely unfair for the Minister of State to argue that the solution is to increase the property tax. We will certainly not agree to that. I ask the Minister of State to rethink this and value the services provided by local authorities.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I noted the Minister of State indicated the Department was working closely with the Department of Public Expenditure and Reform to face up to these financial challenges. I understand the pressure that always has to be put on to try get the money in place for the local authorities. However, the reality for many people, as well as the workers and executives in the local authorities, is that they are trying to do their best to manage with a budget which is inadequate. To say it will be up to public representatives and councillors around the country to try to balance the books is almost to slip into something which does not make any sense to anyone. The problem is not that local authorities cannot balance the books but that they will not have enough money to pay for the services they need to provide.

Peter Burke (Longford-Westmeath, Fine Gael)
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Having been a county councillor for almost two terms, I am acutely aware of the challenges local authorities face. Perhaps the Deputies did not hear me correctly. I said we would engage intensively with the Department of Public Expenditure and Reform in the days leading to next week's budget. We are very clear about the serious circumstances that have befallen our society and the local authority sector and we are working hard to try to alleviate those matters. That is why we allocated €600 million for a rates waiver to the local authority sector. We were there to ensure that businesses could get support during this key period when this pandemic is presenting huge challenges to our society.

On the local property tax, I was only outlining what some local authorities have considered to increase their income streams. I am very clear that local authorities have seen an absolute collapse in their goods and services income, that rates income and the ability to collect rates will be under significant pressure and that the Government will do everything we can to support the local authority sector. I am also very clear that in my role I will be a very strong advocate for that sector because it has shown outstanding resilience in the face of adversity in recent years. As I mentioned last night, the community call to respond to Covid-19 was commenced in a number of days to meet that challenge for our elderly and vulnerable people. We have also seen the response of the sector to the various weather emergencies of recent times. I can guarantee Deputies I will work very hard over the next number of days to ensure local authorities will have support because they need it. We will be very clear on that and I will not be found wanting in that regard.