Bernard Allen (Cork North Central, Fine Gael)
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Question 92: To ask the Minister for the Environment, Heritage and Local Government his views on the Chamber of Commerce submission on local government; and if he will make a statement on the matter. [36608/06]

Dick Roche (Wicklow, Fianna Fail)
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I have noted the contents of the report referred to in the Question. With regard to local government funding in general, I consider that the present system of funding local government, put in place by this Government, has served us particularly well, and has placed local government in a much better financial position than in the past.

This year I announced record levels of general purpose grants to local authorities from the Local Government Fund amounting to some €875m. Taking account of global valuations, this was an increase of some 8% on the 2005 allocation or21⁄2 times the 1997 level. I will shortly be announcing the general purpose grant allocations to local authorities for 2007 and I am confident that the levels of funding that will be made available will again be adequate to meet ongoing local authority needs. I specifically requested that in order to support competitiveness in the economy and to protect the interests of communities, local authorities should to the greatest extent possible ensure that they exercise restraint in setting any increases in commercial rates and local charges for 2006. I am pleased that local authorities responded positively to this request. I will again ask them, in the context of the adoption of their 2007 budgets, to keep increases in rates and local charges to the minimum required.

With regard to development contributions, I am glad to note that Chambers Ireland are fully supportive of development contributions, stating that they allow for local authorities to charge all developers of property, both business and residential, for the provision of associated infrastructure including roads, amenities, etc. The Report primarily points to a variation in the charges levied for commercial and industrial development throughout the different local authorities.

The adoption of development contribution schemes is a matter for the elected members of each local authority following a full public consultation, an approach that was relatively recently endorsed by the Oireachtas in the context of the Planning and Development Act 2000. The Act provides that the basis for determining the contributions must be stated in the scheme, based on the actual estimated cost of the infrastructure provided or to be provided by or on behalf of the local authority. Since that cost will differ among local authorities, depending on local need for infrastructure investment and rates of development, it is inevitable that there will be variation in the development contribution schemes. However, my Department advised planning authorities, in circular letter PD 4/2003, that they should be mindful of the policies adopted by other authorities in their immediate area so as to avoid a major divergence in the level of contributions charged. Planning authorities were also advised in this Circular that while it is expected that developers should make an appropriate contribution towards the costs of public infrastructure and facilities, care should be taken to avoid development contributions that are excessively high.

My Department has established an Interdepartmental Committee, including representation from the Department of Enterprise, Trade and Employment, to look at issues raised by different interests in relation to development contributions schemes. This Committee is considering whether revised guidance should issue to planning authorities before they review their schemes next.