Marc MacSharry (Fianna Fail)
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I thank the Cathaoirleach for selecting this matter and I welcome the Minister of State. I am sorry the Minister for the Environment, Community and Local Government is not present but I am conscious that he is meeting colleagues from Sligo County Council and its chief executive officer as I speak. Nevertheless, I would like to make it clear that it is important that central government does not take an attitude to smaller counties without the robust funding mechanisms of larger counties, which run a surplus, and mistreat them as a result.

Since November last year, central government through the Department of the Environment, Community and Local Government has prescribed cuts, which have affected the people of Sligo, in particular to library and tax office services and 50 additional lay offs. This is unacceptable. More than 180 people have lost their jobs with the council over the past three years. To treat them in this way is to do little more to the people of Sligo than what many of us believe Brussels and Frankfurt have done to the people of Ireland. Sligo County Council and other small local authorities cannot be treated like independent republics somewhere in the Atlantic Ocean dependent of the goodwill and charity of other countries. The citizens of County Sligo and Sligo town are the same as those in Fingal County Council, which happens to have the good luck to have Dublin Airport contributing to its commercial rates base. That local authority has €100 million on deposit while, at the same time, the lack of a robust funding mechanism for councils such as Sligo County Council has led to significant debt which I will break down.

It is often reported in the media that the debt is in the region of €100 million. This includes €30 million spent on land acquisitions. The Department at the time insisted that the national spatial strategy be developed. Every party bought into the strategy, which was subject to public consultation throughout the country and which was overseen by the best spatial planners the Department could procure from Denmark. The strategy stated that Sligo should prepare for a population of 100,000 by 2020. However ridiculous or misguided that policy turned out to be, the Department told the council to think bigger, be more ambitious, prepare public private partnerships and not to be subservient to the developers of the future in the context of having sufficient land for social housing, community facilities and so on.

Another €30 million of debt relates to mortgages, which have been lent to people. As is normal, there is collateral associated with them. A further €15 million relates to the contribution locally to the €120 million spent on upgrading water and waste treatment plants in Sligo. The remaining €25 million is the current deficit ,which relates to servicing the debts and covering the cost of running the water services infrastructure, which increased from €5 million to €10 million per annum between 2008 and 2013. Sligo County Council is a small local authority dependent on central government support but Exchequer funding reduced during this period from €18 million to €9 million. It was, therefore, halved.

In this scenario, we are being pushed out into the Atlantic Ocean and we are being told we can sing for the money because the Department is treating the local authority in isolation and blaming it for implementing Government and Department policy. I acknowledge there were issues relating to the collection of outstanding rates, arrears and so on but these have been addressed by the new chief executive officer and the council. Local authorities such as Sligo County Council, which do not have a Dublin Airport or hundreds of millions of euro on deposit, cannot be discriminated against for failing to have sufficient resources. Central government must come up with them. We expect that central government will provide additional resources for Sligo because the people of the county deserve no less.

They are as entitled to their libraries, tax office and community services as anybody in Dublin South or Fingal, which have the larger rates bases. I appeal to the Minister and his Oireachtas colleagues from the area. There are three Senators from Government parties and two TDs. They will be held exclusively responsible for failure in this regard, as will the Minister of State and the Minister, Deputy Kelly, by me and my colleagues if this is not done.

Joe McHugh (Donegal North East, Fine Gael)
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Gabhaim mo bhuíochas leis an Seanadóir as ucht an cheist tábhachtach seo atá á fhreagairt agam ar son an Aire, an Teachta Ó Ceallaigh.

As the Senator is aware, local authorities have three main sources of funding, namely, grants from central government, commercial rates and other locally raised charges. In recognition of the fact that certain local authorities have less opportunity to raise income locally, central government has provided much higher levels of funding to support the efforts of these authorities to provide an adequate level of public services.

In 2014, approximately 54% of Sligo's budgeted income was expected to be provided by central government, almost double the national average of 28%. This clearly shows that the Government is committed to supporting the smaller authorities, a fact further underpinned by the Government's decision to redistribute 20% of local property tax allocated nationally from 2015 to support authorities that have lower valued property bases.

The issue of cash flow in local authorities is important and certain local authorities, with very large annual expenditure, generally as a result of population levels, can hold seemingly large levels of cash at particular times. All local authorities are required to ensure they can meet the public sector payment deadline by paying agreed invoices within 15 days. For a local authority with €98 million in creditors at the end of 2013, such as Fingal County Council, having cash on hand is prudent and appropriate financial practice.

As the Senator will be aware, Sligo County Council has been incurring revenue deficits for the past number of years to the effect that the cumulative deficit now stands at over €24 million. Long-term debt is in excess of €120 million.

When this matter was raised in this House last November, Senator MacSharry suggested that Sligo County Council is in this situation in part because it has implemented Government policy, particularly in respect of water services and land purchases. The Minister wishes to be clear that the obligations placed on Sligo County Council in terms of implementing Government policy were no more onerous than in any other local authority in this respect.

As the Senator knows, the implementation of the social housing strategy is a key priority for Government and will provide an opportunity for all authorities to develop lands they purchase for housing, thus providing additional housing and alleviating associated debt.

In respect of water services, the Department's analysis shows that combined water and wastewater charges in Sligo increased by just 17% in the period 2008 to 2012 despite an increase in operating costs of 39%, suggesting that the water pricing methodology used was insufficient. The level of income collection in the water charges area was also unacceptably low at only 48% on average from 2008 to 2013. Both of these exacerbated Sligo County Council's financial and cash flow situation.

Other factors such as poor income collection and an inadequate bad debt provision policy have significantly contributed to the financial situation. The commercial rates collection level was just 59% in 2013. Collection levels for housing loans are also poor at 47%.

It is a matter for individual local authorities, including Sligo County Council, to manage their own day-to-day finances in a prudent and sustainable manner. The Department has not been prescriptive in respect of the steps Sligo County Council should take but is in regular consultation with the council in regard to its financial position.

The Minister set aside an allocation of €1 million in additional funding to 2014, and for 2015, for Sligo County Council to assist it to take the steps necessary to move to a more sustainable financial position. The payment of this funding remains fully conditional on a realistic and achievable financial plan which charts a path for long-term financial sustainability being agreed between the Department and the council. This process is ongoing.

The Minister, following a request from the council, is today meeting a delegation of elected members and senior officials regarding the council's historical and current financial position.

Marc MacSharry (Fianna Fail)
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Why has the Minister been sent to the House to deliver such bad news? This is clearly an abdication of responsibility to the people. Are the people of Fingal more entitled to a library than the people of Ballymote? That is the question. It is no more onerous than for any local authority. Fingal has the airport in its area but the people of Sligo or in the Minister's native County Donegal will have to sing for it.

The attack on the people of Sligo has been relentless. It will come to bear specifically on the parties in the Government and it is wrong. It is apartheid by any definition to tell the people of Sligo that they are less entitled to a library or critical local services than the people of Fingal, and to dress it up in some way as independent recklessness. I have explained that the collection methodologies for commercial rates have been improved by the new executive and council. That is improving. However, to say, in a way, that central government and departmental policy had no part in driving an agenda which forced the council to buy additional lands and to spend in other areas is fundamentally wrong. It is an abdication of the Government's responsibility. Is it any wonder that the Germans walk all over us when we are prepared to do this to our own people in this country?

Joe McHugh (Donegal North East, Fine Gael)
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The Senator spoke about responsibility in his introductory remarks. Having a meeting as is happening-----

Marc MacSharry (Fianna Fail)
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Obviously, the Minister is only going to say in the meeting what the Minister of State was sent here to say.

Joe McHugh (Donegal North East, Fine Gael)
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I was speaking to Deputy Tony McLoughlin downstairs-----

Marc MacSharry (Fianna Fail)
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I was not invited, of course. Only Government Oireachtas Members are invited.

Paddy Burke (Fine Gael)
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The Minister of State, without interruption.

Joe McHugh (Donegal North East, Fine Gael)
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What I wish to convey to the Senator is that there are probably two routes to getting things done. One is to let things continue. As the Senator knows, there have been massive changes at local authority level. There are fewer staff, as he pointed out. They did not lose their jobs. Nobody in the public service lost their job. They would have taken one of the different packages offered.

It is important to point out that with a complete sea change in the culture and the way of doing business, we must seek to do things differently. That is the reason the Minister and the Government are taking this issue very seriously, and right now the Deputies and Senators in the constituency are looking at potential solutions. If the Senator has not been invited to that meeting, I will convey that message. No doubt there will be an opportunity for the Senator to raise that in public.

It is important to make the point that there is a problem here and we can be proactive in dealing with it. The proactive way of doing it is to meet with the Minister and the officials from Sligo County Council-----

Marc MacSharry (Fianna Fail)
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Close the libraries.

Joe McHugh (Donegal North East, Fine Gael)
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-----and look at ways of trying to move the matter forward in a constructive and positive way.