Tuesday, 28 June 2022
Saincheisteanna Tráthúla - Topical Issue Debate
I am here to address the very significant and gross underfunding of Galway County Council, which has been a factor in seriously diminishing the capacity of that local authority to be able to offer the service to people that it should seek to offer. This gross underfunding has been going on for many years and the history is quite complex, so I will not go into that. It is stark in terms of the figures presented to us right now, however, by the executive management team within Galway County Council.
Looking at the budget per capitaallocated last year to local authorities with a similar demographic and similar make-up in terms of their rural-urban divide and of a similar size, Longford had a budget per capita of €1,500; Waterford had a budget per capitaof €1,320; Tipperary had €1,200; Mayo, €1,250; and Kerry €1,200. Then we go to Galway, with a budget per capitaof €800. That significant underfunding is seriously impacting on the recruitment and retention of staff within that local authority. In 2008 there were 1,006 people employed by Galway County Council. Just last year, that figure had reduced to 804. We contrast that staff figure of 804 for Galway County Council with a figure of 1,800 for Tipperary, 1,240 for Kerry and 1,025 for Mayo. Both the public representatives, the members of the local authority and indeed the management team there tell me that in order to address that gross underfunding, we are looking at a shortfall of roughly €20 million.
Whenever this case is raised with the respective Ministers responsible for the funding of all of our local authorities, we are told we must wait for the outcome of an ongoing review of our local property taxation system to see how we can use the proceeds of that local property tax to bring about an equalisation of all of the funding that is made available to local authorities across the country, and that we will then move forward collectively following that review. Before that review is finalised and before we set about carrying out its recommendations, Galway County Council in order to be brought to a level footing with all of those local authorities needs to have that immediate injection of €20 million.
Right now, the funding shortfall is impacting seriously on its capacity to deliver services, for example in the area of planning. Planning enforcement is now virtually non-existent within Galway County Council. Indeed, dealing with the massive additional number of planning applications that have arisen over the last 12 months has been very difficult indeed. In the area of housing grants for older people, what should be a very straightforward process of assessment of those grant applications is now taking up to nine months because there simply are not enough people working in that section to be able to adequately assess the grant applications and make the necessary grants. Particularly in the area of housing, every local authority in the country has been rightly charged with delivering on a major local authority housing programme. Again, in this area Galway County Council simply does not have the engineering or administrative staff to even go close to delivering on its commitment for local authority housing delivery over the next five to ten years.
This needs to be addressed. It has been going on for far too long. The underfunding of €20 million needs to be looked at in the immediate future and not in the long term after some ongoing review.
I thank the Deputy for giving me this opportunity, on behalf of the Minister for Housing, Local Government and Heritage, to outline the funding and Government support for local authorities with particular reference to County Galway. Local property tax, LPT, was introduced to provide a stable and sustainable funding base for the local authority sector, providing greater levels of connection between local revenue and associated expenditure decisions. The LPT broadens the tax base by reducing the level of Central Funding required by local government.
Local retention of local property tax began in 2015 and since then the overall principles and allocation methodology have broadly remained the same. Currently, 80% of LPT is retained in the area it is collected, with the other 20% supporting equalisation for local authorities with LPT bases lower than their funding baseline. LPT allocations to local authorities for 2022 amount to €523.9 million. These allocations include the Exchequer contribution to equalisation funding of €34.3 million. Galway County Council was allocated €14.5 million under this process for 2022.
In addition to the LPT allocation, the Department of Housing, Local Government and Heritage has also agreed a provisional allocation of €4.44 million for Galway County Council in respect of the additional costs that will arise in 2022 as a consequence of the national pay agreements. This allocation relates specifically to increases in rates of pay and public service pension reduction resulting from the unwinding of financial emergency measures in the public interest legislation, and increases in pay and pensions relating to Building Momentum - A New Public Service Agreement 2021-2022. The overall aim of the allocation is to ease the burden on local authorities of the increased payroll costs in 2022. As part of the budget process, the Department engaged with the Department of Public Expenditure and Reform concerning the financial impact on the sector and secured the allocation, which will assist local authorities to meet the costs arising.
Across all schemes and funding sources the Department provided €82.9 million in 2020 and €85.9 million in 2021 to Galway County Council. The payments in 2020 also included an allocation to Galway County Council of €1 million. This funding was linked to the operation of municipal districts and was subject to a small number of requirements, including that the funding be divided equally among the municipal districts. The payments in 2021 included an allocation of €600,000 for additional discretionary income. The programme for Government, Our Shared Future, commits to bringing forward LPT reforms including providing for all money collected locally to be retained within the county. The Government has signalled its intention that the move to 100% local retention of LPT will be introduced over the 2023 and 2024 budgetary cycles. It is expected that the LPT yield will change following revaluation last November and the distribution model will be reviewed when new yield per local authority is fully quantified; however final figures are not yet available. Given the need for timely information to be provided to local authorities for their budgetary process and the need for final LPT figures to inform that, it is not expected that baselines will be reviewed in advance of the 2023 local authority budget process.
Each local authority situation is complex and it is important that sufficient time is taken to analyse and assess potential options in that respect. Preliminary census data will also form an important input to that deliberation. The Department of Housing, Local Government and Heritage will, however, be considering, in consultation with the Department of Public Expenditure and Reform, the potential for a move towards 100% retention for 2023.
I am not laying any blame at the Minister of State’s door for that response. He is delivering a response that was provided to him by officials within the Department. However, I am saying to those officials right now that this is totally unacceptable. I made the point in my earlier contribution that there is an ongoing review of the local property tax and then we move forward collectively once that review is completed. That does not address the situation that Galway County Council, even after that review and after the allocation of additional LPT across all local authorities, would still be at a major disadvantage with the €20 million shortfall. What needs to happen right now is for that inequity to be addressed. Galway County Council needs to be brought into line with other local authorities of similar demographic make-up and similar size. It is not acceptable that a local authority in one part of the country has to cope with doing its work with 800 staff while another similarly sized local authority has 1,800 staff. That inequity has existed for a very long time. It needs to be addressed completely separately from this ongoing local property tax review. That is the message and I would be very grateful if the Minister of State could bring it back to the Ministers responsible for this budgetary allocation. The local authority members in Galway County Council are about to begin their own budgetary process, trying as best they can to allocate scarce resources across all of the provision within that local authority. They are doing so with one hand tied behind their back with that ongoing €20 million shortfall. It is not acceptable. It needs to be addressed now rather than later.
I hear the Deputy loud and clear. I will bring his suggestions and deliberations back to the Minister. LPT allocations for 2023 have yet to be decided. We acknowledge the current funding pressures on local authorities.
As such, the funding from Galway County Council and other local authorities will be kept under review as part of the normal Estimates process for 2023 in the context of the aforementioned LPT yield, following the re-evaluation process.
There was unprecedented support for local authorities during the Covid-19 pandemic. One of the earliest priorities of the Department of Housing, Local Government and Heritage was to secure funding to provide a waiver of commercial rates for businesses impacted by the pandemic, while simultaneously supporting local authorities. The cost of the waiver for the local authority sector for 2020 and 2021 was €1.2 billion, and €191 million was paid out in additional support towards lost incomes and expenditure for the same period. In addition, the limited quarter 4 rates waiver has been extended to the first quarter of this year at an estimated cost of €61 million. Over 2020 and 2021, Galway County Council has recouped a total of €17.5 million in respect of the rates waiver and €3.5 million towards Covid-related income losses and expenditure.
The funding position of Galway County Council will continue to be kept under review during the 2023 Estimates process. However, the Deputy has stated that there is a €20 million shortfall. It seems the issue is that the Deputy is looking to see if that €20 million can be addressed in some way or another. That is quite reasonable. Again, it is not my Department, but I will certainly bring it to the attention of the Minister.