Lucinda Creighton (Dublin South East, Fine Gael)
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Question 771: To ask the Minister for the Environment, Heritage and Local Government the funding and budgetary situation of each of the local authorities here; and if he will make a statement on the matter. [29749/09]

John Gormley (Dublin South East, Green Party)
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Funding for service provision, as opposed to capital infrastructure, comes from a range of income sources such as commercial rates, housing rents, environmental and other waste charges and charges for non-domestic water services. Taken as a whole these provide over half of the current funding needs of local authorities. The balance comes from the Local Government Fund in the form of General-Purpose Grants and through a number of specific State grants; the latter include the local and regional road grants from the Department of Transport. General-Purpose Grants are the contribution that my Department makes to local authorities to meet the gap between the cost to them of providing a reasonable level of day-to-day services and the income they obtain from other sources. In October 2008 I announced provisional General-Purpose Grant allocations of €935.2m. As a result of lower than anticipated motor tax receipts it has been necessary to reduce the General-Purpose Grant allocation to local authorities by some €30m. General-Purpose Grants are discretionary and it is a matter for each local authority to prioritise its spending, within the resources available to it, across the range of services it provides.

In the Budget of October 2008, the Government announced its intention to introduce a €200 charge on non principal residences, and the legislation necessary to give effect to this measure will be debated in the House today. The charge will apply mainly to the owners of residential rental property, holiday homes and vacant properties unless the vacant property is newly constructed but unsold. The charge will be collected and retained by local authorities. It is the first locally based revenue stream to be made available to local authorities in the last thirty years. I consider this to be a very significant development as it will reduce the dependency of local authorities on central funding.

The Government decision to introduce public sector pension-related measures applies to all public sector employees, including those employed by local authorities. The pension related deductions in respect of local authority staff are being retained by local authorities and there will be a corresponding reduction in the Exchequer contribution to the Local Government Fund resulting in a neutral impact on local authority finances.

I am satisfied that the level of funding provided through both general purpose grants and the new revenue stream arising from the charge on non principal private residences makes a significant contribution towards enabling all local authorities to provide a reasonable level of services to the public. The revised General-Purpose Grant allocations for each local authority are set out in the following table.