Seanad debates

Thursday, 15 November 2007

Local Authority Charges


2:00 pm

Photo of Pearse DohertyPearse Doherty (Sinn Fein)

Cuirim fáilte roimh an Aire Stáit go dtí an Teach fá choinne an cheist seo a phlé. Ba cheart dúinn cead a thabhairt do na comhairlí chontae ar fud na tíre airgead a bhailiú ó úinéirí tithe saoire ar fud an Stáit. Cuideodh sé sin leis na húdaráis áitiúla seirbhísí éagsúla — seirbhísí níos fearr agus seirbhísí úra — a chuir ar fáil sna áiteanna ina bhfuil na tithe saoire lonnaithe.

This matter revolves around the need for the Minister for the Environment, Heritage and Local Government to give local authorities the option of levying an annual charge on holiday homes and thereby providing them with a contribution towards the public services they provide. The imposition of such a charge would also allow councils to provide additional and enhanced services.

Everyone is aware that there is a huge gap in funding for local authorities. It is becoming more difficult for local authorities to meet the increasing demands relating to the provision of services in their areas. There has been an increase in the level of own resources a local authority must raise to contribute simple matters such as roads. In the previous debate we discussed the issue of having adequate and safe roads. Local authorities are also responsible for providing sewerage schemes, housing and a wide range of other services.

One of the ways local authorities bridge the gap in funding to which I refer is by means of the development contribution scheme, which relates to the construction sector. This scheme is unfair to a certain degree because it places a major burden on young people who are starting out in life and trying to build their own homes and who are obliged to make large contributions, via a huge levy, to the services provided by councils.

Will the Minister of State consider giving local authorities the option to levy a charge in respect of holiday homes? As he is aware, the number of holiday homes in the State increased significantly in recent years. My home county, Donegal, has more holiday homes than any other. There is no doubt that holiday homes bring advantages to an area. They help secure jobs in the construction sector and they attract tourism. There is a need to levy a charge in respect of such homes because most of those who benefit from having second homes in Donegal and other counties do not pay through general taxation because they live outside the State, nor do they pay a contribution towards the services provided by local authorities.

According to the 2006 census, there are 8,275 holiday homes in County Donegal. Throughout the State, meanwhile, there are 49,789 holiday homes. I refer here to holiday homes as opposed to second houses of residence or vacant homes. There are, for example, far more vacant homes throughout the State.

There is a need for the Government to address the matter of holiday homes. This is not a new issue. In 2003, Donegal County Council, with cross-party support, made an application to the Government that a measure such as that which I am seeking should be put in place. The response then, and in every subsequent year, was that the Government was awaiting a review of local government financing to be carried out by Indecon.

A report on this matter was submitted to the Government by Indecon in October 2005 and published at the start of 2006. While I disagree with many of the findings in that report — the Government parties also disagree with them — it is interesting that recommendation No. 7 supports the idea of introducing mechanisms to secure contributions to local authorities' general funding requirements from the owners of non-principal private residences. The report states that contributions to local authority services, such as those relating to local roads, libraries, parks, etc., should be secured from the owners of investment properties and other residential properties that are not principal private residences. The report indicates that the imposition of a levy would score very highly in terms of accountability, efficiency and equity. It states:

At present, owners of such properties currently benefit from services provided locally which are funded from general taxation. Ensuring that these property owners make a contribution to these services is accordingly an equitable measure.

There is no doubt that there is a need to give local authorities the option of imposing a charge and to allow them to decide what the level of that charge should be.

The Minister of State will, when replying, refer to the local government fund, the buoyancy in rates, etc. However, the stark reality is that local authorities are encountering serious difficulties in trying to provide services as a result of a lack of funding. In the past year which was accounted for, a total of €2 million was unrecoverable by Donegal County Council, not through a lack of efficiency but because of the economic circumstances which exist. Companies are going to the wall and it is difficult to apply rates. A €100 charge on holiday homes in Donegal could bring in enough money for the county council to introduce a rates freeze or to put the money into services. I look forward to the Minister of State's reply and I hope he takes it seriously, as I am sure he will.


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