John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

We will soon see. I appreciate the opportunity to attend the Seanad today to provide Members with an update on the position concerning supports for elected members of local authorities and the associated terms and conditions.

We were due to have this discussion when Storm Emma came but the snow got in the way, as it did with many things that week. This issue is one to which I have devoted much of my time and attention during the past eight months.

I note that the issue is held in similarly high regard by Senators. This is the third occasion that I have been invited to attend the Seanad in recent months to speak on the matter and listen to the views of Senators. Since the last time, some improvements have been made to supports provided to councillors. On 10 November 2017 I co-signed amending regulations under section 142 of the Local Government Act 2001 with my colleague, the Minister for Public Expenditure and Reform, Deputy Donohoe. The amending regulations gave effect to and improved on the measures first announced by the former Minister with responsibility for local government, Deputy Coveney. In implementing these measures we have ensured that a new allowance, worth €1,000 per annum, in recognition of the additional workload following the 2014 reforms is provided to all councillors to avoid any suggestion of a two-tier system of local government. While the new allowance is backdated to 1 July 2017 I am aware that some local authorities are only now making payments to councillors. While this is regrettable, I imagine Members fully appreciate that payments made to councillors must be fully compliant with tax law.

The Revenue Commissioners commenced a review of the terms and conditions of the supports provided to councillors following commencement of the amending regulations. The review was not completed until January, when all associated matters relating to implementation of the regulations were finalised. The Revenue Commissioners ruled that the new allowance is taxable income - this was thought to be the case beforehand - and this was promptly communicated to local authorities by the Department. This clarification should allow for outstanding payments to councillors backdated to 1 July 2017 to be issued.

The amending regulations also gave effect to a new option of a vouched expenses allowance for councillors' work up to a maximum of €5,000 per annum, which is also backdated to 1 July 2017. The terms of the allowance are based on the public representation allowance payable to Members of the Oireachtas. All Members will be familiar with this.

When I last addressed the House I informed Members that the categories of eligible expenditure for the new allowance would be further extended. The need to further extend these categories was expressed by Senators during that discussion. I have since issued directions to local authorities along the following lines. Councillors may now claim expenses incurred in respect of rent, rates and utilities for offices, including home offices. Councillors may also pay any person to provide secretarial support so long as the person is eligible to work. These measures have been backdated to 1 July 2017. The measure also includes provision for carers and child care. This means in effect that councillors can now claim for the same range of vouched expenses as Deputies and Senators given that they have a constituency base that they serve. I am aware that the take-up by councillors of this new vouched allowance option has not been high thus far. Such a new allowance will take time for fuller acceptance and I believe it should be given that time.

A range of other financial supports are in place to assist councillors in performing their functions. The main support is a representational payment, which recognises the work that councillors volunteer to undertake when they stand for election and subsequently serve their community. I recall that when I began my political career as a member of Kilkenny County Council in 1999 supports for councillors were limited to expense payments for attending council meetings. This puts in context how far we have come in the past two decades in recognising the importance of local government and improving the range of supports available. The representational payment was introduced in January 2002. Since that time it has been linked to the basic salary of a Senator. In line with adjustments made to a Senator's salary, the representational payment was increased on 1 January 2018 by €246 to €16,891 per annum. The payments will further benefit councillors over the term of the Public Service Stability Agreement 2018-2020 in proportion to further increases in a Senator's salary.

I have previously addressed the House on the establishment of a review of this basic payment to councillors. The process has been somewhat delayed by the fact that the lead official from the Department of Public Expenditure and Reform has transferred to a different Department. It is still firmly the position of Government that a review will be completed before the end of this year. The review is to be chaired by an independent outsider who will consult with officials in the Department of Public Expenditure and Reform, the local government section in the Department Housing, Planning and Local Government and councillor representative organisations, including Local Authority Members Association and the Association of Irish Local Government. The review will devise a system of linking councillors' pay directly to a Civil Service grade and bring all the ancillary benefits that such a change would entail.

Councillors also receive a composite annual expense allowance designed to defray in a structured way reasonable expenses incurred by them in attending council meetings. It is calculated using a formula based on the distance from a councillor's residence to the council offices, current Civil Service travel and subsistence rates and a notional number of meetings that a local authority would be expected to hold in a year. The alignment of the current Civil Service travel and subsistence rates ensures that payments may be made on a tax free basis.

As Members are no doubt aware, the Civil Service travel rates and bands that had been in place since January 1999 were revised last year by the Minister for Public Expenditure and Reform, Deputy Donohoe. My understanding is that the new revised rates reflect changes in technology, road conditions, commuter behaviour and car ownership patterns. The key changes include an increase in the number of distance bands from two to four with a lower recoupment rates for the first 1,500 km of travel followed by an increased recoupment rate for distances between 1,501 km and 5,500 km. A lower rate applies for distances in excess of 5,500 km. These rates now apply throughout the public sector and have also been applied to councillors' travel expenses. I am aware that this has had a mixed impact on councillors, depending on individual circumstances, as it has had across the public service. Some councillors have benefitted while other have seen a reduction – significant in some cases – in annual travel remuneration. Those councillors who have seen their travel allowance reduced include those who live close to council headquarters, such as members of city councils, as well as those based in larger geographic counties who commute long distances. I am most familiar with some of the concerns of those based in west Cork.

It is important to bear in mind that the annual expenses allowance is just that. As with any expense allowance it is payable on the basis that it offsets costs incurred by the individual claiming it. The allowance is not and should not be considered as income. Having said that, councillors should not be forced by circumstances to rely excessively on remuneration from travel expenses as a means of financial support. I appreciate that travel is an integral part of a councillor's duties. Councillors are perhaps unique in the public sector in the range of public bodies to which they may be appointed or nominated to represent their local authorities. Given the extensive revision of Civil Service travel rates, the Department is examining the methodology for calculating councillor's travel and subsistence expenses to ensure that it remains fit for purpose. It is also the case that the complex means for calculating the annual expenses allowance imposes an administrative burden on local authorities and individual councillors alike and there could be benefits in a simplified approach. It is of great importance to support councillors appropriately with due regard for transparency and accountability to ensure they can effectively carry out their role as elected representatives and can continue to give expression to local identity, concerns and the setting of local priorities. Ensuring that supports for councillors are sustainable and appropriate in future will require further consideration between the Department and relevant stakeholders.