Noel Ahern (Dublin North West, Fianna Fail)

I realise local authorities have additional expenses this year but these huge increases, five times the rate of inflation, will pay for benchmarking and leave plenty more for efficient running of services and new projects.

All in all, this represents an excellent outcome for the local government sector. The result of the new funding system is that local authorities are operating on a sound financial footing. I expect to see some good work next year, not just the maintenance of existing services.

Capital funding also increased during the lifetime of this Government. In 1997, the value, excluding roads, of Exchequer public capital programme expenditure in Estimates for the then Department of the Environment was marginally in excess of €500 million. The Abridged Estimate for the Department for 2004 will contain comparable expenditure of €1.6 billion for the same services. Virtually all this expenditure will be advanced to local authorities for a range of services which are mainly infrastructural.

The announcement of the capital envelopes initiative in the budget will bring more certainty to the financing of multi-annual programmes, as well as more flexibility in the carryover of funding from one year to the next. While there may have been good funding of projects previously, people were not sure what would happen in the future. With an overall investment envelope of almost €34 billion in the five year period to 2008 our infrastructure will continue to be modernised in a planned and systematic manner.

Developers have paid development contributions since 1964, they are nothing new. They contribute towards the cost of the infrastructure necessary for all new developments. If they were not levied, the total cost of servicing land for house and office building would fall on taxpayers and rate payers. Without contributions, local authorities would not be able to invest in the facilities, such as parks and playgrounds, that make our communities better places to live. We all know it is not just about building houses, it is about building communities and giving them the services and facilities that allow them to grow.

Until now, the city and county manager decided how much to levy in contributions. Rates were not published and no justification was needed. This system was rightly criticised at local authority level. The Oireachtas, with cross-party support, introduced a new, transparent system in the Planning Act 2000. This system will offer predictability to developers because they will know in advance how much they have to pay in development contributions.