Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

The terms of reference for the review also contain the parameters that will determine the total number of seats on each council. These will take account of the significant population changes that have taken place since the current numbers were decided, while at the same time ensuring adequate numbers for effective representation and governance in lower population counties. It is worth noting, in particular, that the terms of reference include a system of weighting to provide additional members in counties with borough and town councils; that local electoral areas will be designed, as far as possible, around existing municipal towns and that local electoral areas will also generally be named accordingly. Therefore, the town will retain a prominent position within the new system of local governance.

Strengthening the role of local government is a fundamental aim of reform. The action programme provides for the assignment of some significant additional functions, some of which I have mentioned. It also includes the operation of the micro-enterprise support service; alignment of local and community development with local government; and an enhanced role for local government in economic development. A number of specific functions are identified for devolution from central government agencies to local government in areas such as tourism, rural transport, ports and the management of State property. In addition, local authorities will be given greater responsibility in a range of matters in which they are already involved but where there is scope to reduce the degree of central control.

Local government funding, accountability and governance will be strengthened in a number of ways. The action programme recognises the role of an equitable property tax. Government decisions were announced in the context of budget 2013 in relation to the introduction of a local property tax. While it will be administered by the Revenue Commissioners, it is a local property tax. Receipts will be going to local authorities and there will be discretion for them to increase or decrease the rate of tax, with effect from 1 January 2015 onwards. This element of local financial discretion is fundamental to the future development of a more independent, self-reliant and responsible local government system, an objective highlighted in the action programme.

A new system of local government oversight will be introduced, involving the establishment of a national oversight and audit commission, and aspects of the local government audit system will be strengthened.

An important aspect of the oversight process is that it will operate on an independent basis. There is, therefore, no question of it adding to control by Departments over local government, something we are keen to minimise as far as possible. The role and functions of the elected council will be increased and policy making structures reviewed. The local government ethics code will be strengthened and merged into a single national system and important changes will be made to the directive powers of councillors arising from certain recommendations of the Mahon tribunal. This involves excluding the use of powers under section 140 of the Local Government Act 2001 and decisions involving financial or other benefits for an individual or a specific organisation. It is absolutely appropriate, in a proper system of governance, that elected members should remain aloof from such individual decisions, while at the same time their leadership and policy making roles are being strengthened.

The programme incorporates a major efficiency agenda, based particularly on implementation of measures arising from the Local Government efficiency review. Significant savings will be achieved through efficiency measures and workforce planning in local authorities. There will be a more robust system of performance monitoring, with a focus on key indicators, outcomes rather than outputs, value for money and the comparative performance of authorities. Customer service arrangements in local authorities will be further enhanced, while ways of promoting greater community and citizen engagement with local government will be explored and local authorities required to provide better quality public information. All told, it is broadly estimated that the measures outlined in the programme will involve savings of more than ¤400 million per annum when all the reforms are in place. These will be enduring savings in the budgets of local authorities.

Concern has been expressed from some quarters that the proposed new arrangements will have implications for commercial rates income as a result of the differences between the annual rate of valuation in towns and counties. Town rates are lower than the relevant county level in around two thirds of cases. We have to ensure the harmonisation of rates does not lead to a significant net loss of revenue for authorities, while at the same time safeguarding against an increase in rates that would impact negatively on businesses and employment. Harmonisation of rate levels will be equalised gradually over a number of years. It is envisaged that the overall savings to be accrued from the reform agenda, coupled with the strengthening of the funding base for local authorities, through the introduction of the local property tax, will further reduce the burden of commercial rates on local business.

In relation to change in Dublin, the Government has decided that the introduction of an office of directly elected mayor, as has been suggested, should not take place without a more fundamental review of local governance generally in the area. The programme indicates, therefore, that a forum on local governance in Dublin should be convened and, based on these deliberations, proposals will be put in a plebiscite to be held in conjunction with the 2014 elections.

Implementation of the local government reform agenda will be challenging at local and national level. I have mentioned a number of specific structures that are in place to advance elements of the reform process, including electoral review, the merger in Waterford, local-community development alignment with local government, shared services and the local property tax. In line with proposals in the action programme, specific implementation advisory arrangements have also been established also relation to the reform of structures, functions and related matters, with a particular focus on reorganisation of sub-county local government, including detailed examination of specific technical aspects of reform.

Some local elected members view the reform programme with suspicion and cynicism. This perhaps is to be expected with any major programme of change. However, it is important to note that the views of elected members, as expressed in consultations with and submissions by the representative associations of local authority members, were taken into account in the preparation of the action programme for effective local government. I want to make it clear that I am willing to continue that consultation and constructive engagement with the representative associations in the implementation of these reforms.

An essential component of the action programme will be the development and enactment of legislation. Wide-ranging and detailed provisions will be necessary to provide for a range of measures, including mergers, new arrangements at sub-county and regional level, consequential amendments across a number of other legislative codes, and to allow for implementation of a number of new policy undertakings under the programme. The programme sets out more clearly than any previous Government policy document the rationale for strong local government and the logic for using it as the main vehicle of government and public service at local level.

As well as implementing significant changes from 2014 - sooner in some respects such as the enterprise function - the programme has a longer term objective of positioning the local government sector to continue to develop. By putting in place stronger structures, functions, resources, governance and operational arrangements, the reforms should enable the local government sector to play a much wider and more effective role, with the possibility of taking on a broader range of functions of the sort local authorities perform in other European countries.

All of this will not happen overnight, but the measures in the reform programme, including the implementation of a secure and sustainable system of local funding, will greatly increase public interest, engagement, confidence and credibility in local government, setting out a realistic and progressive pathway to the more far-reaching development of local government, and building on the enhancement of the local government role in the shorter term.