Catherine Murphy (Kildare North, Independent)
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Question 444: To ask the Minister for the Environment, Heritage and Local Government if he intends to introduce, fully or partially, the Indecon report on local government funding; and if he will make a statement on the matter. [14167/06]

Dick Roche (Wicklow, Fianna Fail)
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The recently published report on the financing of local government projects the future expenditure demands on local authorities and puts forward a number of recommendations in relation to the financing of the sector. Future expenditure will be met by a combination of the buoyancy in the existing funding system, some additional funding and the achievement of efficiencies in service delivery.

As regards the existing funding system, there is significant natural buoyancy in the current revenue sources of local authorities. For example, at local level the valuation base is growing rapidly as a result of our continued economic growth. In addition, revenue from motor taxation, which is paid directly into the local government fund, continues to increase without any increases in the rates of this taxation. In 2006 the fund will amount to some €1.4 billion. I was in a position to announce record levels of general purpose grants to local authorities from the fund, amounting to some €875 million for 2006. This was an increase of more than 7% on the 2005 allocation and a 160% increase on, or 2.5 times, the 1997 level.

To supplement the existing income sources, a number of initiatives will be pursued. First, I am considering ways of bringing planning fees, which are fixed by regulations, into line with the economic cost of dealing with planning applications. Second, I will introduce legislation to make commercial properties liable for rates from the date of valuation as opposed to the beginning of the following year. This will generate more than €25 million extra a year. Third, to boost income to the local government fund, I am tackling motor tax evasion and will be examining a system of continuous registration of vehicles. Additional revenues will be complemented by a range of efficiency initiatives.

In partnership with local authorities, I will examine the scope for greater sharing of services between authorities and my Department will develop a standard costing system for the sector to deliver enhanced management information, particularly in relation to unit costs. I am developing proposals to enhance arrangements for local audit committees in line with best practice. I will also continue to ensure that the value for money unit in my Department undertakes in-depth analyses of local authority activities and identifies best practice.

The availability of good information is a key to good decision making and key financial data for local government is now being published on my Department's website. Some €2 million has been set aside this year for an innovation fund to identify ways of delivering further efficiencies and to disseminate best practice in this regard to all local authorities. I will announce details of this during the year.