Enda Kenny (Mayo, Fine Gael)
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Question 94: To ask the Minister for the Environment, Heritage and Local Government if he will introduce new local revenue based streams of income as recommended by the Indecon Report on Local Government; and if he will make a statement on the matter. [7430/07]

Fergus O'Dowd (Louth, Fine Gael)
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Question 109: To ask the Minister for the Environment, Heritage and Local Government the way he will fund the expected deficit of €2 billion in local government funding by 2010; and if he will make a statement on the matter. [7429/07]

Fergus O'Dowd (Louth, Fine Gael)
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Question 190: To ask the Minister for the Environment, Heritage and Local Government the recommendations of the Indecon Report on Local Government he will introduce; and if he will make a statement on the matter. [7428/07]

Dick Roche (Wicklow, Fianna Fail)
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I propose to take Questions Nos. 94, 109 and 190 together.

The Review of Local Government Financing by Indecon Economic Consultants estimated, on the basis of different methods of projecting expenditure, that by 2010 local authority expenditure would increase by €1 billion to €2 billion in nominal terms over 2004 levels. Funding this expenditure will be met by a combination of the buoyancy in the existing funding system, some additional funding and the achievement of efficiencies over the period.

Indecon estimated that commercial rates income and motor tax income would increase in line with the consumer price index. However, there is significant natural buoyancy in the current revenue sources, with the valuation bases of local authorities growing substantially as a result of 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, motor tax revenues totalled €879.7m, an increase of 9.6% above 2005 levels. The combined additional income from rates and motor tax alone will substantially address the Indecon income gap projections.

Since the publication of the Indecon Report, I have put in place a number of measures to supplement local authority income and to enhance efficiencies across the sector.

For 2007, I have allocated some €948m in general purpose grants to local authorities, an increase of 8% over the record amount provided in 2006. General purpose grants are my Department's contribution towards meeting the cost to local authorities of providing an acceptable level of day to day services to their customers.

Under the Local Government (Business Improvement Districts) Act 2006, local authorities can now collect entry year property levies on newly valued commercial property from the date of their valuation rather than the next rating year, as was the case heretofore. This provision is expected to generate some €20m in additional revenue to local authorities each year.

The Indecon report acknowledged that local authorities have achieved significant efficiencies in a number of areas and are focused on pursuing ongoing improvements. They are utilising new integrated financial management systems, incorporating modern accounting practices. A shared service approach is being promoted, for example in regional waste management planning and water management. Annual reporting on performance over a range of 42 service areas provides an innovative insight into the functioning of local authorities and represents an important step in measuring performance across the entire local government sector.

Measures to combat motor tax evasion are being continued and stepped up. I am also considering ways of bringing planning fees, which are fixed by Regulations, into line with the economic cost of dealing with planning applications. In addition, the Value for Money Unit in my Department will continue to undertake in-depth analyses of local authority activities and identify "best practice".

In line with a recommendation in the Indecon report, I have amended the Local Government Act 2001 to provide for the mandatory establishment of audit committees to ensure a more comprehensive audit function in local authorities. These committees, to be established this year, will have an independent role in advising the Council on financial reporting processes, internal control, risk management and audit matters, as part of the systematic review of the control environment and governance procedures of local authorities.

I am also developing a new costing system for the local government sector which will deliver enhanced management information, particularly in relation to unit costs. This will facilitate local authorities in assessing their unit costs over time and in comparing costs with other local authorities.