Pat Gallagher (Donegal South West, Fianna Fail)

I thank all the Senators who contributed to this important debate. Like all of them, I am glad when the issue of local government is subjected in most cases to detailed and rigorous debate and examination. Local government is a key element of our democratic system and it is important to keep it at the centre of the political agenda.

The contributions were wide-ranging and covered many of the functions of local authorities. This is appropriate, having regard to the purpose of the Bill, which is essentially about funding local authorities. References were made to other taxes but my brief is in the Department of the Environment, Heritage and Local Government and we are pleased and proud that, during our term in Government, we have established record levels of funding. This is in sharp contrast to the level of funding available in the mid-1980s, which Senator Mansergh referred to when he mentioned the Building on Reality programme.

A reference was made to the Minister not being in the House. That is not important. The Minister has other duties and functions. He is in the country. I am dealing with the Motor Vehicles (Duties and Licences) Bill on behalf of the Department and it is no reflection on the House that the Minister is not here. It was important that the Minister was there while we were negotiating with the Department of Finance regarding the additional Exchequer funding. As Senators are aware, the funding for the non-national roads does not all come from the local government fund. There was additional funding from the Exchequer. It was important we were there when that was being decided.

I am pleased that Senator Mansergh and Senator Moylan referred to the mid-1980s. I had the honour of being chairman of Donegal County Council in 1985-6 at a time when there was a fund of about £210 million nationally for roads, both national and local. I always recall the proposal made in the summer of 1986 that we should abandon half the roads in Donegal and simply try to maintain the remainder. We have come a long way from that situation. Senator Bannon is perhaps fortunate that the Minister is not in the House because he might have a better memory than me. There is no point saying we do not look back. The commitment I mentioned was the one given at the time.

I will also deal with Objective One status and with the BMW region issue. The Fianna Fáil Party negotiated Objective One and got no assistance from the other side of the House at the time. I was standing for election to the European Parliament and it was very much a part of my election manifesto at that time. The outcome was thanks to the Taoiseach, Deputy Bertie Ahern, leader of the Fianna Fáil Party at that time, who, in commemorating the 1400th anniversary of the death of St. Columcille, in Gartan in the middle of Donegal, gave a commitment while in Opposition. More importantly, he followed through on that commitment to ensure that there was, and continues to be, positive discrimination in the BMW region. I will deal with the amounts as we progress.

As I said, the primary consideration in making the decision to increase motor tax rates was the need to provide adequate funding for the non-national roads programme, important roads throughout the country. In this regard, and because it is central to the debate, I reiterate that the extra revenue generated by the increases in motor tax estimated at €34 million will be spent on non-national roads. Every last cent of the increases will be spent on these roads. In the 1980s, it was recommended not only in Donegal, but, I am sure, in other parts of the country that half the roads should be abandoned, but that is not our policy. Rural Ireland and regional development are very much part of our policy. Over the years, as Senator Mansergh said, the sum has increased to almost €1.8 billion. We would like to think regional roads will get additional funding but they receive a fair and equitable share now. We will maintain that momentum and progress in the years ahead despite some pressures on the public finances. In 2004, there have been increases in the level of funding for the non-national road network which has brought it to new heights. This year the Government will invest €4,610 on every kilometre of non-national road in every county. This is 10% more than last year and more than double the 1997 figure.

On a general note, I refer to the local government fund into which motor tax receipts are paid. There have been substantial improvements in the overall funding of local authorities. I wish to send a clear message to local authorities. We should have the policy and philosophy of helping those who are prepared to help themselves. We are looking closely at local authorities' own resources. The €477 million is provided by the Exchequer and the local government fund. This year local authorities will provide €150 million from their own resources. It is a major contribution but one must remember that the funding from the local government fund and the Exchequer supplements their own resources. It is a factor which may be taken into consideration next year when we are allocating funds. There can be shortfalls. There are counties, however, that religiously and progressively increase their contributions, but that is a debate for another day. We will write to each local authority indicating our intentions as far as 2005 is concerned.

The 2004 general purpose allocation of €752 million, to which I referred, represents an increase of 14% over the 2003 allocation and 122% more than the corresponding allocation in 1997. We made that allocation because we realised the pressure local authorities were under in regard to benchmarking. This was one of the primary objectives of increasing the fund substantially this year and we are all aware of the parallel benchmarking in regard to roads.

The current system of funding has served local authorities well. However, with a view to further reform and improvement in the system, the House will be interested to know that the Minister, Deputy Cullen, recently commissioned a major investment review of the whole area of local government funding to meet the challenges. We hope to have a report by August of this year. It will look back to see if we got value for money. The results will form an important part in prioritising investment in the non-national road network over the coming years and in ensuring value for money. On completion of that study, local authorities will be asked to examine and submit revised multi-annual restoration programmes for 2005 onwards. Undertaking this important study may be costly, but it is well worthwhile. The consultants will review best international practice and interested parties will be given an opportunity to make their views known. It is estimated that the study will take approximately one year to complete and we all look forward to the outcome.

In addition to the €477 million available from the local government fund and the Exchequer, last week I, in conjunction with the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, announced funding of €6 million — an increase on €4 million — for the CLÁR area. I do not need to define for the House the reason for establishing such an area given the decline from 1926 to 1996. Much reference was made to class two and class three roads, the tertiary roads, and it was said that they are ignored. This year we advised local authorities that the funding of €6 million is for class two and class three roads. Each county is aware of that and it brings me to Senator McCarthy's point about these roads. I understand Cork will receive an additional €0.5 million. This funding is provided on a fair and equitable basis, namely, on the basis of population. Cork will receive €576 million while Longford, because of its population and the CLÁR area, will receive €154 million. It is a substantial amount. It is a new initiative and I hope we will be able to continue it.

While it is not relevant to this debate, I take the opportunity to respond to the development charges issue raised by Senator Bannon. I think I am quoting him correctly that he said we are forcing councillors and local authorities. We are not forcing them; it is a matter for the local authorities. Having listened to Senator Bannon, one would get the impression there were never development charges. However, development charges have been in place since their introduction in 1964. These charges pay for local authority infrastructure which is necessary to facilitate new development. Over the years, there was widespread inconsistency in their application. The Planning and Development Act 2000 merely introduced new provisions requiring local authorities to prepare schemes on how development contributions would apply in their areas. It is a matter for each local authority. If local authorities decide there will be no development charges, it is a matter for them but they will have to explain to their constituents why they cannot draw down additional funding, which will be because they are not prepared to levy charges. To put paid to that issue, they are not being forced and development charges have been in place since 1964. I hope most local authorities have these in place by the deadline——