Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

I thank the Senator for giving me the opportunity to outline today the position on the LPT baseline review, which is an important piece of work that will be progressed in the Department this year. The LPT was introduced to provide a stable and sustainable funding base for the local authority sector, providing greater levels of connection between local revenue and associated expenditure decisions. LPT allocations to local authorities for 2023 amount to €609.9 million. This figure includes the Exchequer contribution to equalisation funding of €118 million. Galway County Council's allocation for 2023 is €14.5 million.

The revaluation of the LPT was undertaken by the Revenue Commissioners in November 2021. This revaluation has led to changes to the individual yield in each local authority area. However, the overall yield has only marginally increased. Only eight local authorities have seen an increase in yield, while the remaining authorities have seen a reduction in LPT yield.

In line with the commitment in the programme for government, the LPT allocation mechanism for 2023 has been changed to allow for 100% of the estimated yield to be retained locally within the local authority area where it is collected. This is being done on the basis that those counties with an LPT yield lower than their baseline, which includes Galway County Council, will continue to be supported via annual equalisation funding. This will ensure that all authorities continue to receive, at a minimum, an amount equivalent to their baseline. All equalisation funding will now be met by the Exchequer, which requires an increase in such funding from €34.3 million in 2022 to €118 million in 2023. This is a significant level of support for the local government sector from Government in recognition of the additional work burden on local authorities, as Senator Kyne quite rightly outlined.

As previously indicated by the Minister for Housing, Local Government and Heritage, a review of the baseline funding of local authorities is under way. The Minister is committed to completing this review in time for 2024 LPT allocations. Officials from the Department are establishing a working group that will include key stakeholders from the local government sector. It is acknowledged that the circumstances of local authorities vary considerably from one another in terms of geographic area, population, population density, service needs, and, indeed, the ability to raise their own income locally. Therefore, it is intended that the members of this group will represent differing perspectives across the sector. It is acknowledged that factors such as population have shifted considerably in recent years and that a review of the funding baselines is now required. Updated census data will be used, and previous reviews and studies of local authority baseline funding will be assessed and considered. The process will include consultation with representatives of our locally elected council members and other relevant stakeholders.

Across all schemes and funding sources, the Department provided €82.9 million in 2020, €85.9 million in 2021 and €83.3 million in 2022 to Galway County Council. Included in this is the unprecedented level of support provided by central government to local authorities during the Covid-19 pandemic. This included additional one-off allocations to Galway County Council to assist with funding pressures amounting to €1 million in 2020 and €600,000 in 2021. There is also a similar allocation for 2023, provisionally in the amount of €2.75 million.

The Department acknowledges the current financial environment in which all local authorities, including Galway County Council, are operating and the pressures facing them in respect of general inflation and higher costs. In 2023, the Government will make the significant contribution of €481 million to support local authorities. A large portion of this figure, €287.2 million, will go towards assisting local authorities with the cumulative effect of pay costs arising from the national pay agreements and the unwinding of the financial emergency measures in the public interest legislation.Galway County Council will receive €8.1 million in this regard. Furthermore, additional support of €60 million has been secured to assist with rising energy costs in 2023, which includes an allocation of €1.7 million for Galway County Council. These allocations will help ensure that all local authorities, including Galway County Council, have the necessary resources to perform their functions in 2023.

I will make a supplementary response.