Seanad debates

Wednesday, 22 June 2022

Nithe i dtosach suíonna - Commencement Matters

Local Authorities

10:00 am

Photo of Seán KyneSeán Kyne (Fine Gael)
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I thank the Cathaoirleach's office for choosing this Commencement matter. I welcome the Minister of State, Deputy Madigan, although I am disappointed that of three Ministers of State and the Minister in the Department of Housing, Local Government and Heritage not one of them could be here to discuss this matter. Nonetheless I welcome Deputy Madigan.

I have been raising this issue for many years in various ways with different Ministers. The issue is the perilous financial situation in Galway County Council in terms of its baseline funding. Last year when the Minister contacted the county council and gave a very welcome once-off allocation of €600,000, he stated the Department was reviewing the local property tax yield and once available allocations would be reviewed. I now understand that is not going to be concluded this year. The review will encompass all local authorities. However, the Department stated that as previously discussed whether a financial plan specific to County Galway may be appropriate is something we can revisit. Is that something the Department will now look at? The Department also stated it was available to support and collaborate on this issue. I certainly think that a specific case and a plan for Galway needs to be enacted prior to the coming budget, before the councillors have to make their decision in regard to local property tax.

The baseline figures for Galway are as clear as mud in terms of the revenue budget and revenue per capita. In the 2022 revenue budget, Galway County Council has a budget of €143.9 million. Comparable counties such as Mayo and Donegal have around €162 million or €163 million although they have lower populations. That is basically the issue. The per capitafigure for Galway is €802 compared with Donegal with more than €1,000 and Mayo at €1,256. That is the crux of the issue that we are trying to address.

Photo of Aisling DolanAisling Dolan (Fine Gael)
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It just shows that there is a team of people here in the west fighting for funding for the population of the west. We are the seventh largest population with 180,000 people living in County Galway. We are the second largest county and that means a hell of a lot of roads in Galway.

As a Galway county councillor elected in 2019, I am fully aware of the devastating impact in terms of the roll-out of services to people and families who live in our towns and villages. This is our rural future. These are the policies we want to roll out at a local level. We cannot do it because in my own municipal district of Ballinasloe, which goes from Ballymote, close to Castlereagh in Roscommon all the way down to Banagher Bridge, in one section we have more than three vacant positions out of nine for general operatives. We are down an engineer. Another technician was promised last year but is still not in place.

We need clear guidelines on core funding as Senator Kyne as mentioned. We need to know as it impacts from housing and active travel to fire services and libraries on our ability to provide services in the county for enterprise, our planners, water services, economic development, our tourism and heritage officers who are trying to promote hidden heartlands and trying to bring more income into our area that is already suffering in terms of not being able to access these services that we should be seeing from local authorities.

Senator Kyne and I have been working closely with the Minister of State, Deputy Peter Burke. The Minister of State, Deputy Madigan, will be fully aware that we have raised this a number of times previously. Our budget is crucial. As Senator Kyne mentioned it is €802 per capita. To break that down, looking at each section within a local authority, for example, in housing the national average is €480 per person. In County Galway, €95 per person is allocated. It is beyond time that we state that Galway County Council needs support now. It needs exceptional support. I look forward to the response from the Department.

Photo of Josepha MadiganJosepha Madigan (Dublin Rathdown, Fine Gael)
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I thank Senators Kyne and Dolan. At the outset, the Minister of State, Deputy Burke, has informed me that both Senators have been in constant contact with him about this issue and secured a package last year through their work, and that he will work closely with them again over the coming period of time.

The local property tax, LPT, as we know was introduced to provide a stable and sustainable funding base for the local authority sector, providing greater levels of connection between local revenue and associated expenditure decisions. LPT allocations to local authorities for 2022 amount to €523.9 million. This figure includes the Exchequer contribution to equalisation funding of €34.5 million. Galway County Council was allocated €14.5 million for 2022.

In addition to the LPT allocation, the Department of Housing, Local Government and Heritage has also agreed a provisional allocation of €4.44 million for Galway County Council in respect of the additional costs that will arise in 2022 as a consequence of the national pay agreements. This allocation relates specifically to increases in rates of pay and public service pension reductions resulting from the unwinding of financial emergency measures in the public interest legislation and increases in pay and pensions relating to Building Momentum - A New Public Service Agreement 2021-2022.

The overall aim of the allocation is to ease the burden on local authorities of the increased costs in 2022. As part of the budget process the Department engaged with the Department of Public Expenditure and Reform on the financial impact on the sector and secured the allocation which will assist local authorities to meet the costs arising. Across all schemes and funding resources the Department has provided €82.9 million in 2020 and €85.9 million in 2021 to Galway County Council. The payments in 2020 also included an allocation to Galway County Council of €1 million, funding that was linked to the operation of municipal districts. In 2021, Galway received an allocation of €600,000 for additional discretionary income.

It should also be noted that unprecedented support was provided for local authorities during the Covid-19 pandemic. One of the earliest priorities was to secure funding to provide a waiver of commercial rates for businesses impacted by the pandemic while simultaneously supporting local authorities. In 2020, Galway County Council applied a 100% commercial rates waiver to just over 3,500 businesses and recouped €10.2 million in that regard. In addition, in recognition of Covid-19 related income losses and additional expenditure incurred, funding of €6.7 million was provided to Galway County Council in 2020. This support continued in 2021 when the Government introduced a nine-month commercial rates waiver applying to the businesses most seriously affected by the restrictions, and a more targeted waiver for the final quarter of the year. Galway County Council received €7.3 million for this waiver and an additional €1 million for Covid-19 related income losses and expenditure for 2021.

The programme for Government commits to bringing forward LPT reforms, including providing for all money collected locally to be retained within the county. The Government has signalled its intention that the move to 100% local retention of LPT will be introduced over the 2023 and 2024 budgetary cycles. It is expected that the LPT yield will change following revaluation last November and the distribution model will be reviewed when the new yield per local authority is fully quantified.However, final figures are not yet available.

Given the need for timely information to be provided to local authorities for their budgetary process and the need for final local property tax figures to inform that, it is not expected that baselines will be reviewed in advance of the 2023 local authority budget process. Each local authority position is complex and it is important that sufficient time is taken to analyse and assess potential options in that respect. Preliminary census data will also form an important input to that deliberation. The Minister will, however, be considering, in consultation with the Department of Public Expenditure and Reform, the potential for a move towards 100% retention for 2023.

I acknowledge the current funding pressures on local authorities and, as such, the funding for Galway County Council and other local authorities will be kept under review as part of the normal Estimates process for 2023 and in the context of the aforementioned final local property tax yield following the revaluation process.

Photo of Seán KyneSeán Kyne (Fine Gael)
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That is a very disappointing response. There was mention of money to reverse the financial emergency measures in the public interest, FEMPI, and the money used during the Covid-19 pandemic. All local authorities were eligible for those and received them, and they were not particular to Galway County Council. As Senator Dolan commented, this is about staffing resources to provide services the people of County Galway need, and we need better engagement than we get now. It is clear now the local property tax will not be reviewed in time for the forthcoming budget and we need a specific plan for County Galway, the possibility of which the Minister of State, Deputy Burke, committed to last year. I ask that the Department engages on that.

Photo of Aisling DolanAisling Dolan (Fine Gael)
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It is important, as the Minister of State indicates, that taxes collected in the local area would come back to that local area. That is in regard of the local property tax. It is important to recognise that core funding for Galway County Council is the issue. I know the Minister of State, Deputy Burke, and the Minister, Deputy O'Brien, must engage with Galway County Council in this regard.

There has been an increase in commercial rates within Galway County Council and this shows the executive is making commitments to raise funds. We know income must be generated within the local area but we need to be able to have the resources to be able to do that. If we do not have the resources to bring enterprise into our area, how will we get the commercial rates to deliver these services within the county? We need the resources on the ground to do that for Irish Water and a myriad of other things. We would appreciate the support of the Minister of State on this.

Photo of Josepha MadiganJosepha Madigan (Dublin Rathdown, Fine Gael)
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I note what the Senators have said about Galway being the seventh-largest centre of population and the comments around FEMPI and core funding, which are important. I acknowledge that Galway County Council moved to increase commercial rates for 2022 to increase the level of funding available to the council, which made an important contribution to the overall position. Of course, Senators are aware that local authorities may also vary their local property tax rate by up to 15%. Authorities that increase the rate retain 100% of the additional income, whereas local authorities that decrease the rate bear the full reduction in income. Galway County Council has opted not to avail of this opportunity to raise additional locally sourced income since 2018. I am told the council could have benefited from an additional €2.2 million in 2022 if it had applied the additional 15% upward local variation in the same way as many other local authorities have. That said, the funding position of Galway County Council will be kept under during the 2023 Estimates process. I know the Minister of State, Deputy Burke, has an interest in today's contributions and will work very closely with the Senators. He recognises the work done to date for Galway County Council and will continue to support the Senators in their roles.

Cuireadh an Seanad ar fionraí ar 11.15 a.m. agus cuireadh tús leis arís ar 11.30 a.m.

Sitting suspended at 11.15 a.m. and resumed at 11.30 a.m.