Dáil debates

Tuesday, 15 June 2021

Saincheisteanna Tráthúla - Topical Issue Debate

Local Authorities

9:50 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I thank the Leas-Cheann Comhairle for the opportunity to discuss this important issue, which I have been raising at various forums in recent years, namely, the disproportionately small amount of funding that is being allocated to Cork County Council for the county under various headings. Cork County Council commissioned a report by Maynooth University to examine its funding streams, including the roads budget, the town and village renewal scheme, the rural regeneration fund and LEADER. It is not getting a proportionate amount of funding. The Department has to accept there is a funding shortfall for County Cork.

County Cork is not just Cork city. It is a vast county. I represent its Duhallow and Charleville regions right down to Dunmanway and from Ballydesmond to Ballincollig. It is a huge area. Our constituency is as large as some counties. The geographical spread of the county needs to be reflected on by all Departments that are issuing funding. While they can tick a box and say that so many projects are funded in each county, a proportionate amount of funding is not being given to the County Cork.

Down the years, the local authority has administered the county in three different regions: the north, the west and the south. These areas could be three independent units for funding. The Government and its Departments need to consider this matter seriously. Despite the amount of CLÁR and rural regeneration funding that has come to Cork in recent years, some fantastic projects are still without funding. Through LEADER companies or the local authority, they have made significant efforts to apply to, or make expressions of interest to, Departments for funding, but they have been shot down.

I would like to see a recognition that there is a lower amount of funding going to the county per capita. The size of the county needs to be reflected on. There are ways of ensuring more funding goes to the county. Since it already has three administrative areas, legislative change is not required to ensure sufficient funding can be provided. I could talk about the amount of funding coming through other schemes as well. It does not reflect the county properly.

I am raising this matter because there is a significant opportunity. We have fantastic communities across the county. I am privileged to represent some that have proposed great and innovative ideas. As we have seen in recent months, people are now looking at rural areas as a viable option. Despite the crazy planning policies of the past 20 years, they view rural areas as the best places for them and their families to live. We should follow them and enable that.

We should examine rural areas to ensure adequate funding is being provided to them under the various headings and schemes. Those Government schemes are innovative, excellent and well thought out in terms of their aims and aspirations, but it is important County Cork get a fair and balanced amount of funding under each and every heading through which funding is provided by the Government to local councils.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I thank the Deputy for giving me the opportunity to outline the Government's supports for local authorities, with particular reference to County Cork.

The All-Ireland Research Observatory, AIRO, report the Deputy refers to was received by the Department of Housing, Local Government and Heritage on 9 June and is under consideration by officials. It is a wide-ranging report which covers funding from a variety of different Departments for a range of issues and schemes. Many of the funding lines are outside the remit of the Department. The report has also been sent for consideration to other relevant Government Departments.

The funding system for local authorities is complex with authorities deriving their income from a variety of sources, including local sources such as commercial rates, charges for goods and services and funding from central Government. Most of the funding from central Government must be used for specified services. These can be grouped into five broad programme categories: recreational, education, environment, housing and transport.

On funding streams specifically from the Department of Housing, Local Government and Housing, €135.3 million and €167.5 million was provided to Cork County Council in 2019 and 2020, respectively. The increase between 2019 and 2020 is due to an increase in housing funding, as well as funding in respect of the Covid-19 commercial rates and other Covid-19 related expenses which occurred in 2020. It is a matter for each local authority to consider how it can maximise local income sources and manage its own spending in the context of the annual budgetary process.

Local authority members may decide, as part of the process, to vary the annual rates on valuation, ARV, and local property tax, LPT, in order to increase the revenue available to them. I note for 2020 and 2021, Cork County Council raised its LPT rate by 5% and 7.5%, respectively, forgoing the maximum 15% raise, or just over €3 million in 2020 and €2.4 million in 2021.

I also refer to the recently announced plans to reform the local property tax. These reforms will involve bringing new homes which are currently exempt from LPT, into the taxation system, as well as providing for all money collected locally to be retained within their county. This will be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer, as is currently the case.

The Minister for Finance, Deputy Donohoe, recently published the heads of the Finance (Local Property Tax) (Amendment) Bill 2021. The Bill will give effect to a package of measures, in line with the programme for Government, to address the future of the local property tax. The legislation required to implement those changes falls under the remit of the Department of Finance, as a tax policy matter, and will be considered by the Houses of the Oireachtas in due course. The Minister, Deputy Donohoe, also signalled the Government's intent to move to 100% local retention from 2023. Any changes to the allocation process may be considered in that context.

10:00 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I might take the minute left over from the Minister of State's response, if that is allowed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It is not allowed.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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The local property tax, LPT, is a separate argument. The issue here is the findings of the report we are talking about. The report stated that we are not getting our fair share of funding under various schemes. The report has been independently verified. The research was commissioned by the county council.

The residual and persistent shortfall in financial allocations to Cork county is evident across several Departments and public bodies and these are associated with a failure to allocate it on the basis of three established administrative divisions and the persistence of a county basis or a branded tiered model. That is the finding of the report. The independent report states residual and persistent shortfalls in financial allocations to Cork county are evident across several Departments.

It is as clear as that. I can talk about all the schemes and communities which need funding. They are all worthy of being mentioned here, but the reality is there is a residual and persistent shortfall. I ask the Minister of State to take my concerns back to the Department, to the officials who are going through this. We need clear political leadership to say County Cork has had shortfall across all Departments and that shortfall will be addressed, whether it is in the town and village renewal scheme, CLÁR, the rural regeneration programme or the roads programme.

I plead with the Minister of State to take these concerns back. I am raising this issue out of the most genuine concern for the communities I represent, because they need funding from the Government. When we are not getting our fair share of Government funding, it is clearly an injustice to our people.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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That report was received by the Department on 9 June and is under consideration. I will be relaying Deputy Moynihan's message to the Minister of State, Deputy Burke, and the Minister, Deputy O'Brien. As I stated, the report has also been shared with other Departments.

I refer to the unprecedented support for local authorities during the Covid-19 pandemic. One of the earliest priorities of the Minister, Deputy O'Brien, and the Minister of State, Deputy Burke, was to secure funding to provide a waiver of commercial rates for businesses impacted by the pandemic, while supporting local authorities. In 2020, Cork County Council applied a 100% commercial rates waiver to just over 9,000 businesses and recouped €34.7 million from this Department.

In recognition of Covid-19-related income losses and additional Covid-19-related expenditure incurred in 2020, the Department of Housing, Local Government and Heritage provided funding of €6.7 million to Cork County Council. Given the ongoing impacts of Covid-19, the Government's support for local authorities continues. The Government has introduced a commercial rates waiver for 2021, which has been extended to the end of September, at an estimated cost of €480 million. This waiver applies to businesses most seriously affected by ongoing restrictions.

As with all public health measures and associated supports, the waiver of commercial rates will be kept under review, as has been the case since the outset of the Covid-19 pandemic. The Department will continue to engage with the local government sector and individual local authorities on the financial impacts of the pandemic and provide them with the necessary financial supports.