Paul McGrath (Westmeath, Fine Gael)
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Question 136: To ask the Minister for the Environment, Heritage and Local Government if he will review the policy in relation to the significant increase in development charges nationally to the extent that 13.4% of all local government funding is derived from such charges with widely different charges for the same service in many administrative areas; and if he will make a statement on the matter. [7427/07]

Dick Roche (Wicklow, Fianna Fail)
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The amount collected in development contributions has increased significantly in recent years, from €122m in 2001 to €519m in 2005 (based on information supplied for Annual Planning Statistics). This reflects to the large increase in construction activity (which in turn led to increased demands for infrastructure), as well as the impact of the now, schemes of development levies finalised by planning authorities in 2004.

The €519 million collected in development contributions for 2005 represents approximately 10.6% of the total local authority capital income for that year which was some €4.9 billion.

Prior to the enactment of the Planning and Development Act 2000, planning authorities could require payment of a development contribution, as a condition of a planning permission, on a discretionary basis. From 2004, in order to introduce transparency and openness to the system, each planning authority was required to adopt a development contribution scheme stating the basis for determining the contributions to be paid in respect of public infrastructure and facilities in its area and indicating the contribution to be paid for different types of infrastructure.

Development contribution schemes are adopted by the elected members of planning authorities after a public consultation process. I consider that the current system, endorsed by the Oireachtas, which helps to ensure that contributions are levied appropriately across all sectors of development, is fair and transparent.

The money raised locally by development contributions is one of the fundamental sources of financing for the infrastructure that underpins and facilitates all new development. The legislation requires local authorities to base the contributions on the actual estimated cost of providing the infrastructure in question. As that cost will differ among authorities, depending on local need for infrastructure investment and rates of development, it is inevitable that there will be variation in development contribution rates.

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 that 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 also has the opportunity to comment on draft schemes before they are adopted.

Circular letter PD 4/2003 also stated that it would be advisable to review the scheme at 2 to 3 year intervals at least, where the scheme is adopted for a longer period.

My Department has set up an interdepartmental committee to examine issues raised by interested parties in relation to the operation of the contribution schemes. The committee is due to complete its work shortly and it is expected that this will provide the basis for further guidance to be issued to planning authorities.