Micheál Carrigy (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister of State, Deputy Calleary, to the Chamber. Since being elected to this House in April 2020, this is the fourth occasion on which I have raised the issue of the loss of the rate base of more than €1.2 million to Longford County Council due to the early closure of Lough Ree power station. In September 2020, September 2021 and September 2022 I have raised this issue in the House and we have been successful. I thank the Department for that funding and getting the funding for the following year's budget. However, this year I bring it up before the summer. I am hopeful we will have a positive reply. I also hope for a positive reply for the years 2024 to 2026.

I quote the comments from Kieran Mulvey, the Just Transition Commissioner, on this issue. It is a matter of record, and it is worth reiterating here, that he recommended "that an urgent engagement takes place with the Chief Executives of the councils concerned [namely, Longford and Offaly] with the funding Departments so that a suitable emergency arrangement can be agreed to alleviate the rate losses over the period 2021-2026." Unfortunately, every year I have to come in here looking for that funding to be put in place while the local finance section under John McKeon is trying to put together the budget for the following year.

I was a member of the local authority and it was the first local authority to increase the local property tax, LPT, by 15%. We did that in order to ring-fence funding from that to match-fund a significant number of projects and schemes that had been brought forward by Government of which we could avail. We had CLÁR, the town and village renewal scheme, urban renewal development and outdoor recreation. That match-funding is in place for these projects and schemes throughout the county.

The reality is that if we are not successful in securing this funding, we will have to look at reducing our financial output in a number of areas to balance our budget in the year ahead. We do not want to do that and we should not have to do it.The Department needs to give us a commitment for the next three years with regard to the funding, as per the recommendation from the just transition commissioner. If we are not successful, we will have to look at reducing the number of schemes we apply for. We will have to consider the possibility of increasing our rates. That happened for this coming year, and we do not want to do it for the year ahead while a number of commercial businesses are finding things difficult in the current climate. A lot of businesses are struggling due to the reduced tourism numbers visiting our county. We want a commitment from the Department that we will secure that €1.3 million funding for 2024. We also need a commitment for the following two years to allow our finance section to budget ahead for the next number of years knowing that we will be compensated for the loss of rates. The facility was closed, and it was not of our doing. We have a progressive local authority, which is ambitious about the number of projects it wants to deliver in the county, not just in the county town. We need to have finance in place for the matched funding to deliver those projects.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Before I call the Minister of State, I welcome Councillor Patrick Murphy from west Cork, who is joining us today as a guest of Senator O'Donovan. He is welcome to the House along with his guests, Anna Mae, Caroline and Seán. I hope they enjoy Leinster House. It always looks better when the sun is shining. They are very welcome and I hope they have a great day.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I join the Acting Chair in welcoming Councillor Murphy.

I am taking this Commencement matter on behalf of the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien. I thank Senator Carrigy for raising the issue. The Minister acknowledges the funding pressures on local authorities, specifically the negative impact on commercial rates income caused by the closure of Lough Ree power station in County Longford. It is recognised that Longford County Council was reliant on commercial rates from the now closed power station, which accounted for approximately 16% of commercial rate receipts for Longford in 2019. To alleviate this, the Department has provided compensatory funding to Longford County Council at a cost of €1.4 million in 2021 and €1.3 million in 2022. The Minister is pleased to confirm that this arrangement will continue in 2023 with support of €1.3 million secured for this year.

As committed to in the programme for Government, the move to 100% retention of local property tax, LPT, has taken place in 2023. All equalisation funding will now be met by the Exchequer to ensure that all authorities receive, at a minimum, an amount equivalent to their baseline. This increased equalisation requirement will come to €118 million in 2023. The LPT allocation to Longford for 2023 will be €8.9 million, which will include €6.9 million of equalisation funding from the Exchequer. As the Senator is aware, all local authorities have the opportunity to increase or decrease their basic LPT rate by up to 15%. The Senator has said, and the Minister would like to acknowledge, that the elected members of Longford County Council took the decision to increase this rate by 15% for 2023 and 2024. This upward variation on what is a relatively low base will lead to almost €300,000 in extra income for 2023 alone, which will be of great assistance in the challenging financial times outlined by the Senator.

The Government is making a significant contribution of €481.3 million in 2023 to support the local government sector. A large portion of this figure, €287.2 million, will go towards assisting local authorities with the cumulative effect on pay costs arising from national pay agreements and the unwinding of the financial emergency measures in the public interest legislation. This allocation, which has seen an increase of €77.6 million on 2022, will ensure the sector has the necessary resources, in terms of people, to perform their functions and provide in excess of 1,000 essential public services to our citizens. Longford County Council received €1.6 million towards increased payroll costs for 2022, and will receive €3.1 million in 2023.

The Minister is aware of the current financial environment in which local authorities are now operating. In recognition of the ongoing pressures additional support of €60 million has been secured to assist the sector in 2023.The purpose of this additional funding will be to assist county councils, including Longford, in meeting increasing costs, in particular the increasing energy costs involved in those services. Longford County Council has already been provisionally allocated €660,000 in this regard.

I refer to the Government support for Longford since 2020. Across all schemes and funding sources, the Minister's Department provided €30.7 million in 2020, €48.5 million in 2021 and €36 million in 2022 to Longford County Council. This includes the unprecedented level of support provided by the Government to local authorities during 2020 and 2021 in respect of the Covid-19 pandemic. A comprehensive review of the current local property tax, LPT, baselines has commenced and is expected to conclude shortly and in advance of the local authority budget process for 2024. The Department is engaging with key stakeholders and in the course of this review submissions were invited for consideration.

Regarding the Senator's question about funding for the period 2024 to 2026, the position will be examined following the conclusion of the baseline review. I have been assured that the Department will engage directly with Longford County Council in that regard.

Micheál Carrigy (Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I stated, the funding of €1.3 million is for the current year. What I am looking for is a commitment from the Department for the years 2024 to 2026. As stated by the Department, any proposed changes to the current model would need to take into account needs and resources. I understand that the process is ongoing but this is separate from the current model. It was a separate, unique situation in both Longford and Offaly which have taken a serious hit. We are grateful to the Department for the support we have received up to now. It has meant that we have not had to reduce our services or the number of projects we want to develop in the county. However, as I said, I think this is different from the model. I understand the review but we need a commitment that a specific sum of €1.2 million will be provided separate from the standard yearly Government allocations to the local authority. That is the commitment I need for our local authority so we can plan our services for the year ahead. As I said, I know from our director of finance John McKeon that the budgetary process has begun already.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We fully agree that Longford is different as regards this funding issue. That is why €4 million in extra funding was allocated over the past three years. As I said, the review of the current LPT baseline is under way. The Senator's call and requests for multi-annual funding will be looked at in the context of what comes out of the review. There will be very direct engagement with Longford County Council about this particular ask.