Richard Bruton (Dublin North Central, Fine Gael)
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Question 561: To ask the Minister for the Environment, Heritage and Local Government the formula used to distribute the local government fund to local authorities; and if he will amend this formula to make it more transparent and to make it reward local effort to raise matching finance as outlined in IBEC's publication, Vision for Dublin. [23403/07]

John Gormley (Dublin South East, Green Party)
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I assume the question refers to general purpose grants from the Local Government Fund. Some €948m in general purpose grants has been allocated to local authorities for 2007, an increase of 8% over the record amount provided in 2006 and an increase of 116% over the level of grant provided in 1999 when the Fund was established. These grants contribute towards meeting the cost to local authorities of providing an acceptable level of day-to-day services to their customers. The increase in the funding provided through these and other grants has reduced, over the last decade, the proportion of total local authority income provided through commercial rates from some 16% to 12.5%. In recent years, local authorities have been specifically requested by my Department to minimise increases in rates on valuation with a view to maintaining local competitiveness.

Local authorities' cost and income bases vary significantly from one another and calculating an appropriate distribution of general purpose grants is complex. For purposes of allocations, a range of factors is taken into account, including each local authority's expenditure on, and income from, each service, the overall amount of funding available for the grants and the need to provide each local authority with a baseline allocation that will support its financial stability.

The current system for distributing these grants, which has considerable flexibility in taking account of changes in local authorities' requirements and resources, has been in operation for a number of years. In light of factors such as significant changes in local authorities' expenditure and income patterns and the introduction of a new costing system, it is intended, in partnership with the authorities, to review the method by which these grants are distributed.

I consider that the general purpose allocations from the Local Government Fund notified to local authorities for 2007, together with the income available to them from other sources, will enable all local authorities to provide an acceptable level of services for their customers.