Robert Troy (Longford-Westmeath, Fianna Fail)
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To ask the Minister for Environment, Community and Local Government the way he is calculating cuts to local authorities; the percentage of the household charges that have been collected that will be given to the relevant local authorities; and the way the low level of collection of the charge is going to affect the funding for each county respectively. [42481/12]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I assume that the Question refer s to general purpose grants from the Local Government Fund. The two principal sources of revenue for the Local Government Fund are the proceeds of motor tax and the income from the Household Charge. The Local Government (Household Charge) Act 2011 provides that income from the household charge is to be paid into the Local Government Fund. The proceeds from the household charge are being re-distributed on an equalised basis to local authorities within the contex t of the annual allocations of general purpose grants.

General purpose grants contribute towards meeting the reasonable cost to local authorities of providing services to their customers. Some €651m in general purpose grants had been allocated to local authorities for 2012. It has been necessary for me to reduce general purpose grant funding to local authorities in the third quarter of this year in light of the level of compliance with the household charge.

It is estimated that there are some 1.6 million residential properties potentially liable for the household charge. As such, if collected in full, the household charge has the potential to raise €160 million annually. As of 28 of September 2012 some €10 5.4m or over 65% had been collected nationally. A total of €15,695,292 was withheld from the Quarter 3 general purpose grant payment. For county and city councils, this represented a reduction of between 1% and 3% of the total general purpose grant allocation for 2012.

Local authorities can maintain the remainder of their general purpose grant allocation for 2012 through improved household charge compliance in the coming weeks. Those authorities achieving the average collection rate of 65% nationally will not have a further reduction in their final quarter general purpose grant payment. Local authorities achieving a collection rate of 60-65% will incur a further reduction of 0.5%, while those authorities achieving a compliance rate below 60% will incur a further 1% reduction in their annual allocation. The final amount of general purpose grants available for 2012 will be revisited and reviewed in mid-November to take account of the financial position at that stage, including progress on securing an increased household charge yield.

I am confident that the level of general purpose grants together with other Government grants and subsidies, and income raised from local sources, is appropriate to meet the costs of providing a reasonable level of local authority services to communities.