Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I join the Acting Chair in welcoming Councillor Murphy.

I am taking this Commencement matter on behalf of the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien. I thank Senator Carrigy for raising the issue. The Minister acknowledges the funding pressures on local authorities, specifically the negative impact on commercial rates income caused by the closure of Lough Ree power station in County Longford. It is recognised that Longford County Council was reliant on commercial rates from the now closed power station, which accounted for approximately 16% of commercial rate receipts for Longford in 2019. To alleviate this, the Department has provided compensatory funding to Longford County Council at a cost of €1.4 million in 2021 and €1.3 million in 2022. The Minister is pleased to confirm that this arrangement will continue in 2023 with support of €1.3 million secured for this year.

As committed to in the programme for Government, the move to 100% retention of local property tax, LPT, has taken place in 2023. All equalisation funding will now be met by the Exchequer to ensure that all authorities receive, at a minimum, an amount equivalent to their baseline. This increased equalisation requirement will come to €118 million in 2023. The LPT allocation to Longford for 2023 will be €8.9 million, which will include €6.9 million of equalisation funding from the Exchequer. As the Senator is aware, all local authorities have the opportunity to increase or decrease their basic LPT rate by up to 15%. The Senator has said, and the Minister would like to acknowledge, that the elected members of Longford County Council took the decision to increase this rate by 15% for 2023 and 2024. This upward variation on what is a relatively low base will lead to almost €300,000 in extra income for 2023 alone, which will be of great assistance in the challenging financial times outlined by the Senator.

The Government is making a significant contribution of €481.3 million in 2023 to support the local government sector. A large portion of this figure, €287.2 million, will go towards assisting local authorities with the cumulative effect on pay costs arising from national pay agreements and the unwinding of the financial emergency measures in the public interest legislation. This allocation, which has seen an increase of €77.6 million on 2022, will ensure the sector has the necessary resources, in terms of people, to perform their functions and provide in excess of 1,000 essential public services to our citizens. Longford County Council received €1.6 million towards increased payroll costs for 2022, and will receive €3.1 million in 2023.

The Minister is aware of the current financial environment in which local authorities are now operating. In recognition of the ongoing pressures additional support of €60 million has been secured to assist the sector in 2023.The purpose of this additional funding will be to assist county councils, including Longford, in meeting increasing costs, in particular the increasing energy costs involved in those services. Longford County Council has already been provisionally allocated €660,000 in this regard.

I refer to the Government support for Longford since 2020. Across all schemes and funding sources, the Minister's Department provided €30.7 million in 2020, €48.5 million in 2021 and €36 million in 2022 to Longford County Council. This includes the unprecedented level of support provided by the Government to local authorities during 2020 and 2021 in respect of the Covid-19 pandemic. A comprehensive review of the current local property tax, LPT, baselines has commenced and is expected to conclude shortly and in advance of the local authority budget process for 2024. The Department is engaging with key stakeholders and in the course of this review submissions were invited for consideration.

Regarding the Senator's question about funding for the period 2024 to 2026, the position will be examined following the conclusion of the baseline review. I have been assured that the Department will engage directly with Longford County Council in that regard.