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

I am privileged to bring the first ever local government reform legislation before this House. It began life in October as simply the "Local Government Bill 2013" and it will, I hope, enter the Statute Book as the Local Government Reform Act 2014, a title which reflects its true historic significance. It may not rank with what is sometimes referred to as the "Great" Reform Act 1832 in the context of the development of democratic government. However, the enactment of this legislation will be a historic departure in the evolution of local government in Ireland and will bring about momentous change.

Following decades of relative stagnation and decline, the local government sector is now leading the way in public service reform. The Bill before the House introduces radical change across the system. It represents change from outdated, inconsistent and, in some cases, almost redundant structures to a configuration that is rational and reflects modern life; a heavily managerial system of governance to one where the elected council assumes a proper position of leadership and responsibility; a primarily infrastructure-focused role to one that has social, economic and community development as a key priority; and a mindset of dependency on the part of local authorities to one of much greater self-reliance and accountable, democratic leadership. The reform process is facilitating this fundamental change through significant reforms across the entire spectrum of local government in the context of its structures, functions, funding, governance and operational arrangements.

This legislation will not have a short life. For a long time into the future it will radically reform how local government operates, provides its services and, perhaps most importantly, serves, represents and engages with communities throughout the country. The Bill is the roadmap by means of which we will move from an underperforming, under-resourced system of local government that has been hampered by weak functions and a disconnection from the citizens and communities it is supposed to serve to a coherent system that is at the heart of governance and public service at local level. This is a substantial Bill, set out in 13 Parts, with 70 sections, and five associated Schedules and, as such, I do not propose now to discuss all of its provisions. Rather, I will highlight the main reform provisions contained in the Bill, as first presented, and the changes made as the Bill passed through the Dáil.

Strengthening local authority functions is a core element of this change process. This is happening in the short term in the form of much greater local authority involvement in economic and community development. Equally important in the longer term is the potential for further expansion of the local government role. A modern, streamlined, effective and well governed system of local government will challenge any sceptic or guardian of centralised control, whether in other Departments or State bodies. We are leading public administration down a path of greater subsidiarity and decentralised governance not just because the Council of Europe and the OECD have championed these principles on grounds of effectiveness as well as democracy, but because it makes good sense. As last year's action programme for effective local government pointed out, it is irrational to maintain a comprehensive array of local authorities covering every square inch of the State without utilising them to the fullest possible degree for the provision of public services. The local authority should be the public service authority at local level for as many services and functions as possible. To copper-fasten this, the Government recently agreed a procedure for local government-proofing of all future proposals for public service functions at local level, which will ensure that the momentum towards devolution under this Bill will continue to be taken forward.

Nowhere is the significance of change more evident than in the structural make-up of the local government system. Proliferation of public agencies and other organisations receiving public funds was typical of Celtic bubble excess, just like the excessive building, overzoning, excessive lending and overspending that characterised that period of irresponsible government. The local government reform programme is leading the way in deflating the bureaucratic bubble in the sector. Including the dissolutions of town councils and the mergers in Limerick, Waterford and Tipperary, more than 190 statutory local bodies are being stood down. Adding various committees, sub­committees, joint committees and other structures associated with these bodies, the final tally in bureaucratic pruning will reach several hundred more.

These entities give rise to considerable administrative demands - servicing meetings, operating back office functions and going through a plethora of statutory or corporate processes such as corporate plans, strategy statements, annual reports, annual estimates, annual audits, etc. These demands and processes arise largely because these bodies exist, not because they confer any direct benefit to the public. For decades, all of these bureaucratic structures and processes have absorbed resources that, thanks to the reform agenda underpinned by this Bill, can in future be more directly and effectively deployed in improving front-line local services, particularly in terms of economic and community development, activities with real potential to enhance the quality of life of local communities.

The irrationality of current administrative duplication is particularly striking when viewed in the context of an individual county. Take for example Tipperary, which we are unifying after 177 years of separation. How do the 160,000 residents of the county benefit from having nine separate housing authorities, road authorities, planning authorities, rating authorities, etc.? What benefit do the 1,800 residents in the environs of Cashel, who make up 45% of the overall town population, derive from the existence of a town council on their doorstep that does not cater for them in any way? Does the town benefit from the processes, efforts and costs required to produce a co-ordinated development plan for the town and environs, which has to be adopted by two different local authorities?

Extending the boundaries of a town like Cashel or in the 74 other urban centres where, in many cases, a significant proportion of the population lies outside the current municipal boundary, including Kilkenny where there are almost twice as many people outside as within, is not an option. That would weaken the county councils, cause further fragmentation in the revenue base and service delivery and perpetuate the administrative duplication that needs to be eradicated. Nor would it address the status and local governance deficit in the many towns across the country that have grown significantly in the past century or more and where in many cases their populations greatly outnumber that of the smaller town councils.

The only basis on which town boundaries might, in theory, be extended would be to relieve the town councils of most of their already limited functions, which would make a nonsense of retaining them as separate corporate entities. These functions are narrow. In the case of the former town commissioners, which operated under 1854 legislation, they are virtually non-existent. Town councils account for only 7% of local government services and expenditure, but almost 70% of the governance overhead in the sector.

Instead of extending boundaries, the Bill provides for an innovative system of municipal governance whereby the towns will be united with their hinterlands, reflecting the norm for municipalities across Europe and achieving a range of benefits in the process. I am confident that this will also extend across all districts the ethos of municipal government and civic responsibility that has underpinned the work of many town councils.

The strength of the new municipalities will be founded not on corporate status, but on the role of their elected members.

The Bill devolves a significant range of powers to elected members at district level, bringing county council decision-making closer to local communities while at the same time achieving greater efficiency and value for money through administrative and operational integration. Subsidiarity will, therefore, be enhanced, a fact, contrary to some misleading comments, acknowledged and welcomed by the recent Council of Europe report. Democratic representation will also be enhanced as the municipal districts will facilitate engagement with local communities and make councillors more directly identified with and accountable for decisions affecting the local area.

Those who suggest that the Bill will weaken local democracy do not have a solidly grounded case. This is evident when one considers that town councillors, who account for 46% of local authority members, represent only 14% of the population, with this small minority also having a dual franchise, while, as I mentioned earlier, many large centres of population and, indeed, the entirety of rural Ireland, have no sub-county municipal governance. Legislation can improve structures, functions and systems but it cannot guarantee that the elected members will have the capacity and commitment to ensure that the system works well and that the potential benefits of the reforms are fully realised. This is one of the key reasons that I have made significant provisions in the Bill to support and encourage elected members to step up and meet the challenge of representing and serving their communities well and effectively.

Part 7 makes provision for a carrot and stick approach to the training and professional development of councillors. For too long, training for councillors has been on an ad hoc basis, often based on little more than costly attendance at conferences organised by commercial interests. This approach has not served our councillors, who I believe are deeply committed to doing their job well, or the communities they represent. To this end, the Bill provides for a more structured approach to training as well as continuing professional development, with powers for Ministerial regulations on the syllabus and provision of councillor training. There will be a strong emphasis on relevant professional training provided at a more local level, where possible. I will be working closely with the amalgamated representative body, the successor to the ACCC and AMAI, which I hope will be in place in tandem with the new structures, to ensure the curriculum for this training is fully relevant and fit for purpose.

Attendance at conferences, unless organised by the local authority system or a recognised sectoral body, will be discouraged. The new intake of councillors following the 2014 local elections will be provided with induction courses that address the need for enhanced training in the areas of ethics and the prevention of conflicts of interest, among other important issues. Failure to comply with regulations on attendance at training will lead to financial penalties. This approach will maximise the return on investment for councillor training, and more important, will improve the effectiveness of councillors in discharging their new and expanded role in the development of policy and oversight of its delivery. This new approach to ensuring that councillors are properly trained for the job is essential to achieving the vision for a reformed local government. This reform will not happen if the elected members are not in a position to deliver the kind of policy-making and oversight that our communities deserve. If this Bill is enacted, they will, for the first time in many decades, have a much more important role to play in how the local authorities they serve are governed and managed.

The Bill provides for an enhanced policy-making role for elected members across many important areas ,including economic development and enterprise support, in particular through the new strategic policy committees for economic development and enterprise to be established under the Bill. These new SPCs will provide a crucial mechanism for the development of the economic part of the local economic and community plans, which will be provided for in their entirety by way of Committee Stage amendments. The new SPC will also be the mechanism whereby the operation of the local enterprise offices, which will be one stop shops for enterprise support within the local authorities, will be overseen by the elected members in a manner similar to the oversight of other SPCs on the management and delivery of local authority functions.

The establishment of the LEOs within the local authority system is a significant element of the bolstering of local authority functions in the areas of economic development and enterprise support. It is in line with the wider reform objective of eliminating duplication in that it will remove another tier of governance through county and city enterprise boards, CEBs, while still ensuring that the best of the work done by CEBs continues to be supported and progressed. It is worth mentioning also that the Bill will additionally deliver an enhanced role for local government in ensuring co-ordinated and coherent action for local and community development.

Through the establishment of the local community development committees, local government will once again take centre stage in this area, bringing its resources and democratic mandate to bear while retaining and building on the existing strengths of local initiative and commitment that have been fostered in the sector to date. The local community development committees will also have a key role to play in the development of the community elements of the local economic and community plans. This new approach will address the existing overly-complex structures, lack of joined-up approach to planning, oversight and delivery of programmes, and the requirement for organisations to be represented on a multitude of local boards and consultative bodies.

It will provide for a streamlining of structures and programmes to maximise the benefit to communities at a time when funding, particularly EU funding, is becoming more constrained, and integrating local economic and community development planning will ensure a holistic approach to sustainable development at the local level. Membership of the local community development committees will reflect the partnership approach that has been at the heart of efforts to date, and will foster this further by ensuring a balance between sectoral interests and elected members.

These changes provide for a vital expansion in the scope of functions of local authorities, an issue which was quite rightly raised in the Council of Europe's Congress of Regional and Local Authorities report on local democracy in Ireland. The Bill is vital to reversing the tide of marginalising local government which has occurred over the past few decades. It goes further in providing a mechanism for the devolution of a wide range of central government functions from Departments and State agencies. Although extensive devolution will not happen overnight, the Bill provides a robust framework within which a more efficient and effective local government system can take on increasing amounts of such functions. The Bill goes a long way to achieving our vision of local government as the primary vehicle for governance and public service at local level.

In addition to the broader expansion of the functions of local government, this reform Bill also provides for significant steps to rebalance the relationship between elected members and the executive. This was one of the major commitments that we made in our programme for Government as part of our overall reform of the public sector. The Bill will ensure that the elected members are central to the policy-making and governance of local government. They will have increased decision-making powers and responsibilities, including the ability to vary the level of the local property tax, and enhanced oversight responsibilities in the delivery of an efficient and effective service to the public.

These enhancements, particularly the discretion to increase or decrease the rate of local property tax, will, in a very real way, make elected members accountable to the communities they serve and will re-energise local democracy. Elected members will have to respond to the needs of their communities and take meaningful decisions about the level of funding that needs to be generated from the local property tax and the ways in which that funding will be used. Some have suggested that the Bill is centralising power, but I am convinced that by significantly reducing the dependence on central government funding, and providing a stable mechanism for local authorities to generate and manage their own funds, we are renewing the relationship between local authorities and the communities they serve. The reintroduction of a significant local revenue-raising power provides the first such opportunity since 1977 for citizens to have a vested interest in the decisions their elected members will make.

Central to the rebalancing of power between the elected members and the executive is the replacement of the traditional role of manager with a new position of chief executive. This is not simply a change of title, but a more fundamental change of role which reflects the relationship between the elected members, as the board of directors of the local authority who provide strategic direction, and the chief executive, who has responsibility for implementing that strategy.

The Bill contains a number of important provisions in this regard - providing additional statutory underpinning for the duty of the chief executive to comply with policy as set down by the elected council, and strengthening the capacity of the council to oversee and question the implementation of that policy. The oversight role of the council, following the enactment of the Bill, will involve additional mechanisms for engagement with the chief executive, requirements for regular monthly management reports, mechanisms for additional reports and indeed reviews of implementation, all at the request of the elected members.

However, perhaps the most symbolic provision of this new relationship will be the role of the elected members in the appointment of the chief executive as the individual who will be expected to implement the policy set by them. The current system gives a nominal responsibility to members to approve the appointment of a manager, but this is relatively meaningless as the appointment is automatic after three months, whatever the view of the council. This is completely turned on its head in the Bill, as henceforth the elected councils will have full powers of appointment of the chief executive following a Public Appointments Service nomination. I will introduce an amendment on Committee Stage to provide greater clarity on how the elected members are to perform this important new reserved function.

With these greater powers of the elected members to generate revenue through the local property tax and to direct the policy and programmes of the local authority, it is logical that the Bill would also seek to strengthen the governance and oversight arrangements for the local government system as a whole. The members at municipal district level will play an integral role in the budgetary process. In fact, an amendment made in the Dáil on Committee Stage provided that the chief executive must consider the needs and resources of the local authority and of the municipal districts. The principles of fairness and equity must be at the heart of the budgetary system, especially in the context of the general municipal allocations.

I also draw attention to the new section on local authority service delivery plans, which was included as the Bill passed through the Dáil. These plans provide for a new methodology whereby local authorities will clearly identify the services they will be providing and the standards to which these are expected to be provided. These plans are essential for two main reasons - they contribute to the Government's efficiency in public service agenda, while also ensuring that citizens and communities can clearly see what services they are getting for the taxes they pay.

It is essential that one can see whether the local authority has delivered what it promised and whether one is getting value for money when comparisons are made with neighbouring or similar local authorities. These service plans will be tied in closely with the more quantitative performance indicator or performance standard model at national level over time.

In this regard, the Bill also makes provision for national oversight of local authority performance through the establishment of a national oversight and audit commission. The commission will provide an independent scrutiny of local government performance in fulfilling national, regional and local mandates. It will bring accountability and coherence to the forefront of consideration of local government performance. Moreover, in line with the overall thrust of the Bill, it will be a streamlined structure without a corporate overhead that will be supported by staff from within my Department and which will have powers to request reports from the new regional assemblies. The commission will do its work under the guidance of an independent chair and will comprise members with relevant expertise in a range of areas to provide the most overarching and comprehensive oversight of local government performance. Its reports will inform the Government and the Oireachtas of local government's strengths and weaknesses and will inform elected members of the performance of their authorities.

More important than the change in Title in the Bill are the substantial additions made to it during its passage through the Dáil. While I have mentioned some of them already, another I wish to highlight is section 60, which replaces the regional planning guidelines with regional spatial and economic strategies, which will be the main function of the new regional assemblies. These are essential to ensuring the full integration between planning and economic development and will provide a much stronger framework for integrated national and regional co-ordination. These strategies will provide the broad framework within which local authorities will perform their enhanced role in economic development. I intend to table further important amendments to the Bill on Committee Stage here in the Seanad later this week, including provisions to cater for points raised by Opposition Deputies during the Dáil debates. I look forward to a constructive debate with Senators in this Chamber, as well as to the suggestions they also may wish to make to improve the Bill. In addition, some important provisions for which drafting had not been finalised in time for the Dáil will be brought forward in the Seanad in order that the Bill, as it leaves this House, will be further enhanced. I wish to point out that while this will involve quite a number of amendments, the majority of them are minor or technical in nature.

However, there also are substantial issues to be addressed. In particular, I would like to highlight the link I propose to make between the new economic development role at local and regional level and community and local development. Through the new community and economic plan there will be a requirement for local authorities to consider the synergies between the local community development committee, LCDC, and the strategic policy committee, SPC, for economic development processes, as well as to build an integrated plan that will be consistent and coherent with the development plan and the regional spatial and economic strategy and which will be responsive to the needs of the communities to which it applies. In addition, taking account of the discussion in the Dáil, I also will propose some improvements to the provisions on the refund of rates for vacant properties. Furthermore, I will table amendments to provide a strengthened but measured and balanced regime to secure the payment of outstanding non-principal private residence charge arrears, which will be an important potential source of revenue for local authorities in 2014.

As I have stated consistently, this reform Bill is about bringing local government back into the communities it serves and in that regard, I intend to bring forward an amendment that will provide for a framework for much more active and effective engagement by citizens with local government. Previous efforts in this direction were half-hearted, and the current non-statutory structures that were supposed to generate citizen engagement are largely unknown to the public. The new framework will be detailed in secondary legislation that will enable me to take account of the recommendations from a group chaired by Fr. Seán Healy, which recently completed its work.

I opened this debate with a reference to the change in the Title to the Local Government Reform Bill 2013. Although a simple amendment, I believe it sends a strong and unambiguous signal as to the purpose of the Bill. This Bill will provide a robust legislative framework that will reform fundamentally local government structures and will deliver changes across the sector to ensure that our citizens and communities are served and represented in an effective and accountable way. It will reverse the trend of past decades of marginalising local government and will create a strong basis for more devolution of functions and a rebuilding of local government as the primary vehicle for governance and public service at local level. I will conclude by thanking the Cathaoirleach and Senators for the opportunity to consider this Bill before the Christmas recess. This is a busy time for everyone and I hope the debates will be productive and will contribute to a positive outcome before Members rise for the break.