Paul Gogarty (Dublin Mid West, Green Party)
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Question 497: To ask the Minister for the Environment, Heritage and Local Government if action will be taken against local authorities which do not comply with his Department circular on the need for them to reach a break even figure at the end of the budgetary year in 2009. [36903/09]

John Gormley (Dublin South East, Green Party)
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I presume the Question refers to the Circular issued by my Department in February 2009 setting out details of the financial requirements for local authorities relating to the overall management of their capital and current accounts. The Government set a limit of €200 million for the contribution that the local government sector can make to the deterioration in the General Government Balance in any one year. This is not a new requirement for 2009, but current economic and budgetary considerations require all sectors, including local authorities, to ensure effective control and management of public finances.

In order to stay within the overall limit for the General Government Balance, it is necessary for local authorities to manage their finances and to maintain their current and capital accounts broadly in balance for 2009. Within this general requirement, there is capability for borrowing by local authorities for capital infrastructure.

Local authorities are not immune to the effects of the downturn in the economy, and there are pressures on resources at all levels. However, a local authority is under a statutory obligation to adopt an annual budget providing for the expenditure estimated to be necessary for it to carry out its functions and the income estimated to accrue to it. Local authorities are adjusting their spending proposals throughout the year in light of changes they are experiencing in income levels at local level. My Department will continue to work in partnership with local authorities to ensure that efficiencies are introduced where possible and that expenditure is prioritised to focus on essential services.