Wednesday, 17 November 2021
Nithe i dtosach suíonna - Commencement Matters
My Commencement matter relates to the loss of commercial rates as a result of the closure of Lough Ree power station. On 8 November 2019, the ESB announced the closure of two peat-powered generating plants at Lanesborough and Shannonbridge, near the Minister of State's area. These plants stopped generating electricity in December 2020. This was a major blow to employment and local economic activity in the region. Counties Longford and Offaly were negatively impacted not only by the loss of commercial rates income from the plants themselves, but also by the potential loss from suppliers to the plants, including Bord na Móna.
Lough Ree power station paid €1.2 million in rates annually. It was the single biggest ratepayer in Longford and accounted for 15% of the rates base in the county. The rates income loss from Bord na Móna was €16,200. Considering that the average ratepayer in Longford pays €1,782, this puts the severity of their loss into a vivid context. To compensate for the loss of one large ratepayer, another 674 new ratepayers would need to emerge for 2023 out of a rateable property population of 1,455, which will not happen.
To sustain a loss of rates income of that magnitude in one year would mean that in order to compensate on the income side, we would need to pass on an increase of 13.5% to balance the books. Longford County Council has consistently varied the LPT upwards by the maximum of 15% for four years. It was the first county in Ireland to do that. I was my party's group leader and in conjunction with our Fianna Fáil colleagues, we proposed doing that to finance critical capital regeneration projects in the county. It would be wrong to ask the same council, whose funding model is predicated on the maximum upward variation of the LPT each year, to curtail or even completely cease this critical work on regeneration.
I will contextualise the problems we would face with this potential devastating loss of income. A sum of €1.2 million is the equivalent of keeping 35 general operatives employed. A sum of €1.2 million is earmarked to service capital project loans to the tune of €12 million over the next ten years. This, in turn, could potentially attract capital funding of €124 million into the county. A sum of €1.2 million in discretionary income pays for such diverse services as tourism initiatives, community grants, public lighting, leisure centre costs and sports partnership costs. A sum of €1.2 million lost per annum will severely compromise and probably halt our ability to match funding for many Government initiatives, such as the urban regeneration and development fund, URDF; the rural regeneration and development fund, RRDF; the outdoor recreation infrastructure scheme, ORIS; CLÁR and the town and village renewal scheme, which we have been successfully doing so far; and our contribution to just transition projects. It would effectively mean a moratorium on all recruitment. We need a long-term sustainable solution. It is critical for us to alleviate this potential calamitous situation that could arise in the coming years. We have received the top-up for 2021 and 2022, but we want certainty up to 2027 which is when the just transition period was meant to end.
I was involved in a meeting with the just transition commissioner, Kieran Mulvey, also attended by the Taoiseach, the Tánaiste and the Green Party leader, the Minister, Deputy Eamon Ryan. In discussing the just transition project, I raised the subject of rates. It was agreed, including by Kieran Mulvey, that this needed to be put into place until 2027. We need certainty. Based on my knowledge of the director of finance in my county, John McKeon, I am sure he is already planning ahead for the 2023 budget and the various projects planned to regenerate our county. I do not think it is too much to ask for certainty rather than me coming here next August or September looking for that top-up of money while everyone agrees that we should get it. We just need to put it in place now so that Longford County Council can plan ahead financially for the coming years.
On behalf of the Minister for Housing, Local Government and Heritage, I thank the Senator for giving me the opportunity to speak about the funding of Longford County Council, and in particular the loss of income due to the closure of Lough Ree power station in Lanesborough. I believe I was present at the online meeting the Senator mentioned involving the Taoiseach, Tánaiste and Kieran Mulvey some time ago. I know the Senator made a very strong case on the issue on that occasion. It is good that he is taking the opportunity to continue dealing with this major issue for Longford, Offaly and other adjoining counties in the midland region. It is definitely a very important issue in Longford and Offaly.
Just transition is integral to the Government's climate action plan, and we are committed to supporting communities transitioning to a low-carbon economy. However, the Government acknowledges that the closure of power plants has a serious impact on the local economy. Longford and Offaly are the two most affected counties. In 2019, Lough Ree power station in Lanesborough accounted for approximately 16% of the rates receipts for Longford County Council.The Government recognises that this is a significant portion of the rates income of the local authorities, particularly against a backdrop of the Covid-19 pandemic and the financial impact it has had on ratepayers generally. As part of budget 2022, the Government announced an allocation of €1.3 million to Longford County Council in respect of the rates that would otherwise have been levied on the power station next year. Funding for the same reason was also provided this year, as the Senator knows.
In the wider context of rates, since revaluation in 2018, the rates base in Longford has increased by just over 7%, which is equivalent to an increase of about €590,000 in the rates levied. In addition, I note that the Programme for Government: Our Shared Future commits to bringing forward local property tax, LPT, reforms and streamlining commercial rates. The LPT reforms, brought into effect by the Finance (Local Property Tax) (Amendment) Act 2021, are bringing in new homes, that were previously exempt from LPT, into the taxation system as well as providing for all money collected locally to be retained within the county.
The Revenue Commissioners are currently conducting their first revaluation of LPT. Once the information on the new yield is available, the Department of Housing, Local Government and Heritage intends to conduct a review of the allocation process and funding baselines across the local government sector, which is very important. Any significant changes to the rates base of individual local authorities will be considered as part of this process.
In the absence of a more permanent solution to this issue in Longford, which also affects Offaly County Council, the Department of Housing, Local Government and Heritage will continue to engage with both local authorities, as part of the overall Government approach to just transition, with a view to developing a longer term solution for 2023 and beyond. In the meantime, I assure the House that the Government is committed to supporting the financial stability of local authorities and to the sustainable funding model of the sector. Once the review of the new LPT is complete, we will look at the long-term stability arrangements for the years to come. Pending that, we will keep in touch with the local authorities. That process can only commence now that the Revenue Commissioners are finalising details of the recent LPT revaluation. Rates in LPT are being looked at collectively.
By way of figures, although not exact figures, our LPT base is more than €2 million, albeit we used to have a top-up from the equalisation fund. Based on the figures, more than 90% of our housing is in the lower end of the LPT market. We will not see a significant increase in our LPT uptake. I wish to highlight the fact that we were the first county to increase it by 15% and to use that funding to match funding for regeneration projects for our county. It has been very successful, and I hope it will be taken on board.
From what has been said, it is positive that there is a commitment to engage with the local authorities so that it is intended to discuss the plan from 2023 onwards. I ask, and this is in the Minister of State's interest as it relates to his constituency of Laois-Offaly, that when the decision is made, it is made for a three- or four-year period. It is important for any local authority to plan forward. We have a significant number of projects. We have a large €10 million urban regeneration and development fund, URDF, project in Longford town. We have an URDF project of more than €6.5 million in Ballymahon. There are significant projects throughout the county on outdoor recreation. We have been successful with those applications because of the decision we took on the LPT and the model, which has now been replicated by 15 or 16 local authorities in the country. When that review is complete, I hope the commitment is for a four-year period so that we can plan ahead for the projects we have in the pipeline in our county.
I, again, acknowledge the contribution of Senator Carrigy. Having listened to everything he said, if every Oireachtas Member was as well informed as to what was happening in his or her local authority area as he is, it would add to the richness and quality of the debate and the information available to us in this House when dealing with these types of issues. The Senator listed a number of projects and it is clear he has a great interest in each one. I acknowledge what he said about the 15% being used for matching funds to increase. The Government has provided an unprecedented level of support in the context of the just transition and the impact of Covid-19 at the same time. Longford County Council applied 100% commercial rates waiver for 100 businesses and received more than €4 million from the Department of Housing, Local Government and Heritage for that rates waiver.
On additional Covid-related expenditure in 2020, the Department provided €1.7 million to Longford County Council due to other income loss streams. As has been the case since the outset of the pandemic, the Department will continue to engage with the local government sector, with individual local authorities on the financial impacts of the pandemic and provide them with the necessary financial support. Additionally, in the Senator's county there will also have to be special engagement on the just transition and the serious loss of a rates base in the county.