Seanad debates

Tuesday, 18 November 2014

Adjournment Matters

Local Authority Funding

7:30 pm

Photo of Simon HarrisSimon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank Senator MacSharry for raising this matter. I am responding on behalf of the Minister for the Environment, Community and Local Government who thanks the Senator for providing the opportunity to outline the situation regarding the financial difficulties of Sligo County Council.

The continued deterioration of Sligo County Council's financial position is of serious concern to him, despite the achievement of savings in recent years. On Thursday last, 13 November, the Minister met the chief executive of Sligo County Council and his senior management team to discuss these very issues and had a constructive and useful engagement with them.

The council has been incurring revenue deficits over recent years to the effect that the cumulative deficit now stands at €19.67 million with long-term debt in excess of €120 million. It is a matter for each local authority, including Sligo County Council, to determine its own spending priorities in the context of the annual budgetary process having regard to Government policy, locally identified needs and available resources.

The elected members of a local authority have direct responsibility in law for all reserved functions of the authority, which include adopting the annual budget and authorising borrowing. Elected local authority members are democratically accountable for all expenditure by the local authority.

The financial difficulties of Sligo County Council have not been caused by the financial model used to fund local authorities. While it is true that general purpose grant funding to Sligo County Council has reduced from a high of €22.22 million in 2008 to €15.58 million in 2013, the reduction, at 29%, has been less than the national average of 35%. Local authorities are independent bodies with their members responsible for budgetary and borrowing policies. Sligo County Council has the same requirements placed on it as all other local authorities in terms of implementing Government policy.

Other factors such as poor income collection have significantly contributed to Sligo's financial difficulties. Commercial rates collection levels for the county and borough in 2012 were at 62%, compared with a national average of 75%. Sligo's collection levels declined even further to 59% in 2013. Sligo County Council has uncollected rates debt of €6.8 million. Its water collection levels have averaged 48% between 2008 and 2012, resulting in an estimated loss of income of in excess of €1 million per year. Collection levels for housing loans are also poor at 47%, showing arrears of €1 million. Housing rent income collection is 80%, which is below the level achieved by comparator local authorities.

While it is a matter for individual local authorities, including Sligo County Council, to manage their day-to­day finances in a prudent and sustainable manner, the Department is in regular consultation with the council on its financial position. The Minister has set aside an allocation of €1 million in additional funding for 2014 for the council to assist it to take the steps necessary to move to a more sustainable financial position. The payment of this is fully conditional on a realistic and achievable financial plan which charts a path to long-term financial sustainability being agreed between his Department and the council.

Financial stability must take precedence in all of Sligo County Council's planning in the coming years. It is essential the 2015 budget addresses the gravity of the financial situation in the council, building on the savings achieved to date. The Minister and his Department are committed to continuing to support the council in its efforts to restore financial stability. As the Minister pointed out at his meeting with Sligo County Council, the next steps need to be taken by the council through a firm commitment reflected both in its budget for 2015 and through the agreement of a long-term financial plan with the Department. By ensuring Sligo County Council is supported in making these difficult decisions that will, in the longer term, place it on a more realistic and sustainable path to growth and renewal, the Minister is certain Sligo can put its current difficulties behind it and focus on consolidating its position as a leading economic centre for the north west in the future.

Comments

No comments

Log in or join to post a public comment.