Victor Boyhan (Independent)
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I thank the Cathaoirleach's office for selecting this matter. I ask the Minister of State to clarify the reserved functions of the elected members of city and county councils in the context of the capital budget. As we all know, all local authorities have a revenue budget and a capital budget. Each local authority adopts its budget annually. Members can accept, amend or reject the day-to-day revenue budget but there seems to be some misunderstanding in relation to the capital budget. There is an inconsistency across the 31 local authorities in terms of how the capital budget is treated.

Some weeks ago, the Minister of State at the Department of Housing, Planning and Local Government, Deputy Phelan, was in this House talking about local government reform. He spoke about the need for greater transparency and accountability. He also spoke about empowering local city and county councillors to manage their organisations. He referred to fancy ideas about mayors in some local authorities but not in others. He said that it is Government policy to empower local councillors and to give them more functions and powers.I acknowledge the important step in that regard. I want to be clear about it, however, and that is why I am seeking a response today.

I have in front of me legal advice from a number of local authorities. There is inconsistency in that advice. The Minister of State will be aware that section 135 of the Local Government Act 2001 clearly deals with capital budgets and the reserved and executive functions. Where there is an absence of a reserved function, it is usually inferred that it falls back on the executive. As a result, there is inconsistency.

I have spoken to a number of the Minister of State's party colleagues from various councils about this. I would have believed it right and proper that members would have the right to accept, amend or reject capital budgets. They are entrusted with responsibility and they are elected by the people. It is important and correct that the executive prepares the rolling three-year capital budget but there is inconsistency across local authorities. Some very good chief executives engage with their corporate policy group, bring the measure through the various sections in the council and seek interaction with the elected members while others quite bluntly refuse to do so, stating that it is an absolute executive function and that they have one obligation, namely, to go to the council and tell the members what has been agreed. That is crazy.

If we are serious about local government reform and empowering elected city and county councillors, we need to address this issue. I hope to hear today the Minister of State's professional legal advice from within the Department. More important, I want to hear a sympathetic Minister state that this has to be a matter for the elected members of the councils. Surely elected representatives have to hold an executive to account. Surely elected councillors have a right to decide the priorities of their funding. That is important. I am not trying to water down any functions of the executives of any local authority, lest they think otherwise, but I want to be sure city and county councillors are empowered to accept, amend or reject capital budgets.

Damien English (Meath West, Fine Gael)
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I thank Senator Victor Boyhan for raising this issue. I gather it is not the first time he has raised it. As usual, he is persistent on these matters in order to get to the detail. That is fair enough; that is what it is all about. I hope to clarify the issue as best I can. The Senator has raised an important question concerning the ability of local authority members to use their role to the maximum and also to have a say on major projects in their counties, be they local or of national significance. Certainly, capital expenditure is important. As we roll out Project Ireland 2040, which is a major capital expenditure programme for the country for the next ten years and beyond and which involves an allocation of €120 billion in taxpayers' money, it is important that local authorities be involved in capital projects and in ensuring that they happen on time and, if at all possible, within budget. Expenditure is an ongoing issue as costs increase.

As set out in correspondence to the Senator from my colleague, the Minister of State, Deputy Phelan, it is not the role of Ministers to provide legal advice. We cannot do that. It is interesting that the Senator has obtained different legal advice from different sources. It will differ depending on who gives it. We cannot give the Senator legal advice but I will be happy to confirm what the legislation sets out and what it is meant to be. That is the best I can do for the Senator.

Elected members of local authorities are vested with various reserved functions that enable them to direct and oversee the activities of the local authority generally. These reserved functions are provided for by a broad suite of enactments. Section 149(4) of the Local Government Act 2001, as amended by the Local Government Reform Act 2014, provides that every function of a local authority that is not a reserved function is an executive function to be carried out by the chief executive. Part 14 of the 2001 Act sets out the role of the elected council and provides that it is a reserved function of the elected members to adopt a revenue budget; this provision does not extend to the capital budget or plan. I am no sure of the history of that but that is the way it always has been. It could certainly be considered in the future. It was not a change in 2001; it was always that way. I am just clarifying, from our point of view, what the legislation states.

Section 135 of the 2001 Act provides that before the start of each local financial year, the chief executive shall prepare and submit to the elected council a report indicating the programme of capital projects proposed by the local authority for the forthcoming year and the following two local financial years, having regard to the availability of resources. This report may be considered at the local authority budget meeting or at such other meeting as the elected council may by resolution decide. While the Act provides that both the revenue budget and capital plan be placed before the elected members, section 103 requires the revenue budget to be adopted by the members, while section 135 requires that the capital programme be submitted for consideration and comment only.

The Senator asked me about best practice. I am stating the position in the legislation. To me, it is best practice and would make sense for councillors to consult on and debate the capital programme, and even vote on a motion thereon. I would imagine that, in most cases, local authorities do so. From talking to councillors around the country, I am aware that they generally feel they have a say in this regard. It happens in practice although it might not always be set out in legislation. It would be good practice to have the members on board in respect of projects and to bring them with one as best one can.

Other relevant provisions of the 2001 Act addressing the role of elected members in the area of capital budgeting - this is where they do have very clear powers - include: section 137, which provides that the elected council may by resolution require the chief executive to prepare plans and specifications for particular works and an estimate of their cost; section 138, which provides that the chief executive shall inform the elected council before any works, other than maintenance or repair, of the local authority are undertaken or before committing the local authority concerned to any expenditure in connection with the proposed works; and section 139, which provides that, once the elected council is informed in accordance with section 138 of any works, it may by resolution direct that those works shall not proceed. Therein lies the power of a local authority member when it comes to capital projects. It is very clear that they have a role if they have a difficulty with or are positively disposed towards a project. Section 140 provides that the elected council may, by resolution and subject to the requirements of the section, direct that any specific act be done by the local authority. Again, the elected members have very powers in this regard, which is important. This might satisfy the Senator regarding what elected members can do under the law.

While responsibility for the full range of local authority functions is split between the elected members and the executive, the intention has always been that the members, in the exercise of their role, would act on a basis akin to that of a board of directors served by a full-time chief executive. Councillors, in my view, are the directors of a local authority. They have a very serious and important role. That is very clear in the Department's interpretation.

The legal character of a local authority thus comprises two elements, the elected council and the executive, with responsibility for performing local authority functions shared between them. Legally, however, all functions, whether performed by the elected council or by the chief executive, are exercised on behalf of the local authority. While the law must provide for a precise division of functions, and responsibility for their exercise may be clearly defined, in practice the policy and executive roles are intended to be complementary. That is best practice. I thank the Senator for the opportunity to address the Seanad on this matter. I hope I brought some clarity to the legal position.

Most capital projects require the raising of money, which means loans. Government grants might be available for some part of a project. Under Project Ireland 2040, taxpayers' money, spent through Departments, will fund a significant amount but in some cases money will also have to be found locally. Local authority members have to pass loans. The cost of the loans, in interest, is part of a revenue budget.

Victor Boyhan (Independent)
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I thank the Minister of State for that. Everything he said, I know. I will have to look at the Official Report to see his response. I was handed a script with only four paragraphs by way of response. It is very different from what the Minister of State read. He went way beyond the script, which I appreciate. I also appreciate his knowledge on this matter.

Ultimately, the Minister of State said it makes sense for councillors, elected members, to be involved with the capital budget. Of course it does. The Minister of State is clearly saying there is no provision in legislation. This is the Legislature. The Minister of State can take it from me today that I will, very soon in the next few weeks, seek to muster up support among members of the Joint Committee on Housing, Planning and Local Government for what I propose. It is timely in the run-up to a local election, when politicians are going around the country canvassing and talking about powers in their communities, that we identify the absolute weakness. I will write to the Minister formally today asking him to ask his colleagues and the Minister to examine this matter again. We have identified a real problem here. In some councils, when the manager has his or her capital budget he or she then proceeds to enter into commitments. When people enter commitments, it costs money. It is very difficult to pull out of commitments on a capital budget when they have been initiated.We should avoid this. We should have clarity and no ambiguity. The time has come to embed in legislation the requirement that each council approve its capital budget. I hope I have the Minister of State's support in this as well as the support of the three Fine Gael Ministers who are doing an excellent job in the Custom House. I look forward to engaging early with the Minister of State and making this a really important issue about accountability in the run-up to the May 2019 local elections.

Damien English (Meath West, Fine Gael)
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I have outlined to the Senator the law in this regard. I want to make clear that councils have a role in capital projects under the law. The Senator's specific question concerns a capital plan, in which a number of votes are taken together, but individually on each project local authority members have functions if they want to use them. The law is clear on this, as I tried to set out to the Senator as best I possibly could. We will have other chances to debate legislation later.

Victor Boyhan (Independent)
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We can improve it, though.