John Cummins (Waterford, Fine Gael)

They are more than welcome to the Chamber. I thank Senator Kyne for outlining the position as he sees it regarding funding for Galway City Council.I know the Senator is a strong advocate for his area and that he will continue to fight for increased funding. It is important for me to clarify at the outset that the characterisation of Galway City Council as a tier 5 local authority refers specifically to the size of the local authority. It does not actually reflect the funding mechanism for the local authority. Dublin City Council, for example, is categorised as a tier 1 local authority because of the scale of the authority itself. It is not in any way linked to the funding the authority may receive. In other words, a simple reclassification of Galway City Council from a tier 5 to tier 4 local authority would not have any effect on the funding of the authority itself, which is actually determined by a range of other factors. It would be the incorrect classification based on its size.

The funding system for local authorities is a complex one. Authorities derive their income from a variety of sources including commercial rates, charges for goods and services, local property tax, as well as funding from Government Departments and other bodies. Central Government funding of local authorities similarly presents a complex picture, with transfers, both current and capital, coming from a wide range of Departments and offices for a variety of purposes. In 2023, funding from central government to local authorities totalled around €6.7 billion. Across all schemes and funding sources, my Department provided €69.6 million in 2022 to Galway City Council, €79.8 million in 2023, and €93.3 million in 2024.

As previously stated, there is no tiered funding system in place and the criteria for the distribution of this funding varies by scheme, depending on the scheme in question. Central government funding has traditionally provided non-programme funding to local authorities in the form of an annual contribution towards meeting the costs of providing a reasonable level of service in their area. Up until 2014, this was in the form of a general purpose grant, and from 2015 onwards, it was replaced by the local property tax, LPT, which were linked in the most part to the general purpose grant. It is important to note that while the LPT is an important source of own-use funding it was just 6% of the overall current income of the sector in 2023. Annual funding allocations from the LPT are decided in accordance with Government-approved distribution policies and are based on estimates of the yield and the baselines in individual local authority areas. Under the LPT allocation model, every local authority has a minimum level of funding available to it known as the baseline. A review of these baselines was completed by a working group in 2023, and it identified that the baseline funding of some authorities needed adjustment according to the criteria of population, area, local income, deprivation and achievement of national policy priorities. The Government agreed that these adjustments be applied and, furthermore, that every local authority would receive a minimum increase of at least €1.5 million, which Galway City Council benefited from. There will be a review every five years in this respect. I will go into a few more figures in my follow-up response.