Michael Kitt (Galway East, Fianna Fail)

I thank the Senator for raising this issue. He has made some very interesting points in his contribution. The Planning and Development Act 2000 provided for a radical overhaul of the development contribution system. One of the central tenets of the reforms under the Act was to introduce greater transparency in the way in which development contributions were levied and applied. Under section 48 of the Act, elected members were given the powers to make, amend or reject the development contribution scheme proposed by the manager following a public consultation process. Therefore, the elected members have the central role in overseeing the level of contributions being sought and the way in which these contributions are spent by the local authority.

The policy guidance framework set out by the Department of the Environment, Heritage and Local Government is clearly designed to draw the attention of local authorities to their obligations under the legislation, while also recognising that the adoption of development contribution schemes remains a reserved function.

Section 135 of the Local Government Act 2001 requires managers, before the start of each financial year, to prepare and submit to the council a report indicating the programme of capital projects proposed for the forthcoming and following two years. The development contributions collected by local authorities are ring-fenced and committed to fund a planned capital programme as set out in the development contribution scheme adopted by the elected members. Equally, it is important to acknowledge that, in line with their reserved function, a number of local authorities have already responded to the economic climate by amending their respective development contribution schemes to reduce the contribution rates.

Local authorities are now witnessing a steep decline in revenues from these schemes and it is highly likely that development contributions income will continue to decrease significantly while expenditure will increase. It is appropriate for the legislative framework to continue to ring-fence development contributions for investment in long-term capital projects which reflect the local community gain associated with the contributions.

While respecting the reserved function of locally elected officials in this area, I expect that local authorities will consider reducing development contribution rates at this time. In their deliberations, county managers will continue to have regard to the overall funding position of their authority, any existing contractual commitments and the importance of supporting local employment through projects funded through development contributions. Given that development contribution schemes are adopted by the locally elected members, county managers will no doubt consult each council on this matter.