James Bannon (Fine Gael)

The danger for local government is the perceived and, I fear, very real erosion of its independence and the persistence of the "Dublin knows best" mentality. Senator Dardis shares this mentality although he claims he is from a rural area.

In a democracy, power should be devolved to representatives close to the people, who would address their issues, and those who have power and make decisions should be answerable and accountable to the people. Ireland is the only democracy in the developed world where most local authority powers and functions are delegated to non-elected officials by national Parliament.

The democratic process, as it operates in our system, is remarkably different from that of cities in the US and across Europe, where local decision-making, including plebiscites, is the norm. Despite the aspirations of the Local Government Bill 2000 to improve local democracy by promoting the role of local representatives, what is happening in practice is further eroding their powers. The main aims of the Bill were as follows: to enhance the role of the elected member; support community involvement with local authorities in a more participative local democracy; modernise local government legislation and provide the framework for new financial management systems; and underpin generally the programme of local government renewal. Three years later, those aspirations proved to be mere aspirations, and the Local Government Bill 2003 proposed nothing new to make these aims a reality. The following areas were ignored and sidelined and have been ever since — future funding of local authorities; giving local authorities new powers to lead their communities; giving the authorities new technology to improve services, deliver budgets for the term of the council, calculated on the basis of needs; and improving the internal efficiencies of local authorities to deliver services. None was delivered.

The 1971 Government White Paper on the reform of local government highlights the generally accepted Irish belief in the value of local government as a democratic institution. It states a system of local self-government is one of the essential elements of democracy. Under such a system, local affairs can be settled by local citizens or their representatives, namely, county councillors or town councillors, local services can be locally controlled and local communities can participate in the process of government and exercise the responsibilities of government. Local government exists, therefore, for democratic as well as practical reasons. One should try telling this to the current Government.

I call on the Minister, Deputy Roche, to give adequate power to elected representatives on local authorities, who are closest to the citizens, to take decisions on day-to-day matters. I call on him to fulfil his commitment to provide adequate funding to local authorities, which have been totally underfunded since the abolition of rates. A major challenge that faces local government is to revitalise people's interest and involvement in local democracy. The independence of local authorities would enhance and extend their role within their communities. This should be a Government-driven process, but it is not such at present.

Local authority funding must be equitable, transparent and practical. It is essential that the user-pays principle be implemented fairly in both the business and domestic sectors. In 1997, the Government abolished water charges for domestic users. While charges for the business sector have risen dramatically, the City and County Managers Association says an insatiable public demand exists for more and better services.

Central government contributed 63% of local authorities' current expenditure in 1983, and this fell to 44% by 2004. The figures speak for themselves. Central control of funding is neither adequate nor efficient. The employers' lobby group, IBEC, has called for local charges and rates on business, such as those imposed for waste disposal, to be capped at the rate of inflation and for reforms to be put in place to make local government more efficient.

The inequity of local authority financing is a key issue that needs to be addressed if Ireland is to remain competitive. Hard-pressed local authorities have been forced to impose one stealth tax after another to make up for shortfalls in Government funding. Local authorities throughout the country have had to raise the rent on local authority housing for old age pensioners by up to €14. Senator Ulick Burke highlighted this issue on the Order of Business this morning. The much-maligned taxpayer is suffering as a result of direct taxes which are imposed by the Government and stealth taxes which are driven by the Government. It is grossly unfair that people have had to tolerate at least 30 tax increases at the same time as savage cutbacks in areas like health, education, housing, social welfare, agriculture, FÁS schemes and youth schemes and severe increases in development charges.