Victor Boyhan (Independent)
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I thank the Cathaoirleach for selecting this item on the Commencement today. I welcome the Minister of State at the Department of Housing, Planning and Local Government, Deputy John Paul Phelan, to the House. I wish to raise a very important issue. I ask for the Minister of State to consider whether local authority expenditure should be scrutinised by the Committee of Public Accounts. I call for this in the context of a need for greater transparency in the governance and scrutiny of local government finance, and to reflect the financial stewardship that is placed on the whole corporate body of a local authority via its members.

The members of a local authority have a particular role in scrutiny and accountability through the auditing process of local authorities. This does not just concern the executive of the 31 local authorities in this country. It is also about the role of the elected members and the oversight they provide. Five years ago, the Minister of State's constituency colleague, Deputy John McGuinness of Fianna Fáil, introduced a Bill to the Dáil to make the expenditure and income of local authorities accountable to scrutiny by the Committee of Public Accounts. That Bill was rejected at Second Stage and therefore fell. In 2012, the then Minister of State outlined the reasons why the Government objected to the Bill. I do not intend to go into them now as he will be fully aware of them. However, a lot has changed since 2012. We now have the National Oversight and Audit Commission, NOAC, supervising local government. We also have local property tax, a new dimension to local government revenue and expenditure which was not envisaged when this Bill was considered, or when the previous unsuccessful Bill addressed the matter. I do not propose to go into the rights and wrongs of how the local property tax is disbursed across this country. That is for another day and another debate, although I would welcome the House holding that debate at some stage.

Now more than ever, however, people have a right to know how their local property tax and, indirectly, their income tax, is being spent by local authorities across this country. As credible as the National Oversight and Audit Commission is, and with all respect to the good work that it does, the Minister of State, Deputy Phelan, will be aware that its reports do not come under the level of national scrutiny that the Committee of Public Accounts would bring to this work. At a practical level, it is simple fact that Government expenditure comes under the spotlight of the Committee of Public Accounts. The national media pay attention to the work of that committee, as we have seen time and time again. Where there is a focus within this committee the media take an interest, and therefore the public hears about it. That very important fact is worth taking into consideration as part of this recommendation. I am not saying that there are wholesale inefficiencies or bad spending decisions taking place in local authorities. I want to make that clear. What I am saying is that the taxpayers are entitled to the highest levels of transparency and scrutiny around the expenditure of their money in each of these 31 local authorities.

What am I asking of the Minister of State? In simple terms, I am asking him one question. Will he and the Government consider drafting legislation so that the Committee of Public Accounts, and thus the Comptroller and Auditor General, can have a role in scrutinising all 31 local authorities' spending across this country?

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I thank the Minister of State for putting down this Commencement matter. The whole area of local government and local government expenditure was covered, as the Senator mentioned, by the Local Government Reform Act 2014, which established the National Oversight and Audit Committee. The matter of examining how local authorities expend their resources and the value for money delivered for rate-payers and taxpayers across the country is a very significant issue, and the Senator is right to raise it. The 2014 Act seems to have left a gap between the work that NOAC does and any measurable outcome at parliamentary level. In theory at least, the reports that NOAC produces can be covered by the Committee on Housing, Planning and Local Government, but in practice the housing aspect of that committee's remit is by far and away the busiest, and the local government reports do not seem to get as much coverage. Shortly after I was appointed I attended a meeting with NOAC when I heard one was taking place in the Customs House. I was the first Minister of State to go to one of their meetings. I was impressed by the personnel involved. They included former long-serving councillors and also long-serving management officials from across the country. These were people who had a very serious interest in the area as well as a significant level of expertise.

I am more than interested, I am in fact determined to ensure that the gap that exists at present between the activities of NOAC and those of the Committee on Housing, Planning and Local Government can be bridged in some way. As things stand, there will be a local government Bill next year. It is my intention that there will be provision in that Bill for strengthening the oversight of expenditure within local authorities. As NOAC is currently constituted, its functions include scrutiny of the performance of local authorities; support of best practice; overseeing implementation of national local government policy; and monitoring and evaluating implementation of corporate plans. It generally operates through subgroups, including a financial performance subgroup, that oversee different aspects of its work. Each subgroup consists of three or four members out of the ten members of NOAC, and publishes annual local authority performance indicators and composite public spending code quality assurance reports.NOAC generally operates through subgroups, including a financial performance subgroup that has been set up to oversee different aspects of NOAC's work. Each subgroup comprises three or four members from NOAC's total membership of ten people. Each year, NOAC publishes local authority performance indicators and composite public spending code quality assurance reports.

I was interested to hear what the Senator had to say at the outset about the interest taken by the media in the activities of the Committee of Public Accounts. The perception and the work of that committee have changed greatly in the past ten years. It has become a very political committee. It was not as political in the past. This change has positive and negative aspects. I am not convinced that adding local authority responsibility to the areas the committee has to examine is necessarily the right way to go. I think we should try to make the NOAC system work more properly and fully than it does at present.

It is worth pointing out that when the reform legislation was being drafted and considered in the Oireachtas, consideration was given to the possibility of merging the Local Government Audit Service, which audits the 31 existing local authorities, and the Office of the Comptroller and Auditor General. While it was decided at the time not to merge the two organisations, the process led to engagement between senior managers in the two auditing bodies on enhanced co-operation arrangements in areas like professional training, value for money methodologies and approaches, and the possibility of issuing joint reports within their existing respective mandates.

The possibility of the Office of the Comptroller and Auditor General and the Committee of Public Accounts having a role in further ensuring appropriate oversight of expenditure of public funds by local authorities can be reconsidered by the Oireachtas with particular regard to commitments in A Programme for a Partnership Government. At present, my priority is to finalise the reports on local government which are promised under the programme for Government. At that stage, I will examine the matters that are to be addressed in the legislation that is to be introduced next year. Clearly, most of that legislation will flow from the reform reports. I am personally committed to the idea of greater national scrutiny and oversight of the finances expended by local authorities throughout the country.

Victor Boyhan (Independent)
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I thank the Minister of State for his considered response. Ultimately, there are 31 local authorities and 31 chief executives. People are beginning to question whether those chief executives are accountable to anyone. They are well remunerated for their responsible jobs, which they do exceptionally well, on the whole. We need greater scrutiny of the financial affairs of these authorities. The real issues here are independent scrutiny, financial stewardship and public confidence in the 31 local authorities. The people who elect local authority members and pay their taxes to those authorities want to see accountability and transparency in local government finances.

I would like to leave the Minister of State with two little messages. I ask him to look again at NOAC. I understand NOAC has just five staff members. It is under-resourced. Representatives of NOAC attended a meeting of the Joint Committee on Housing, Planning and Local Government last week. I ask the Minister to examine this suggestion as a start. It is important. I have studied each of the 31 reports of the Local Government Audit Service. Certain themes recur in the qualified opinions in those reports year in and year out. The chief executives tend to reply to the service by noting the shortcomings that are highlighted in the reports and explaining that the financial structures of the local authorities do not have the necessary resources to carry out the extensive requests. I suggest that the officials in the Department of Housing, Planning and Local Government who look at the annual local government audit reports every year need to say that this excuse is not good enough. It is unacceptable for local authorities to respond to something that has been a recurring theme for three years by trotting out the idea that they do not have the resources to address serious financial governance issues. I thank the Minister of State.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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The staffing issues at NOAC have been brought to my attention. In light of the amount of work NOAC is trying to do, I agree it is insufficient for it to have just five members of staff. The balance of powers between local authority executives and members is under consideration in the report that is being drafted at present. When we reflect on the possibility of providing for executive chairs of councils, we must consider whether that can happen right across the country, the timeframe for doing this and period of time for which they would remain in office. I have been an advocate of this approach for a long time. There are examples across the country of local authorities where the balance of power does not seem to work properly. As we all know, elected members are held accountable whenever there is an election. There is certainly a need for greater accountability at senior management level in our local authorities. I accept that there are many fine chief executives and senior managers at local authority level. As they know, they have nothing to fear from accountability. I assure the Senator that we are giving active consideration to the matters we are discussing.