Bernard Durkan (Kildare North, Fine Gael)
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To ask the Minister for Environment, Community and Local Government the extent to which it is intended that local household or other service charges will go directly towards the provision of services currently or previously provided by local authorities or likely to be so provided in the coming year; and if he will make a statement on the matter. [46531/12]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The development of a system of local government funding which is fair, stable and effective and brings greater local responsibility in relation to financial matters is an essential feature in my reform programme. By international standards, the revenue base of local authorities in Ireland is relatively narrow, and local authorities here are disproportionately dependent on central Government funding. The introduction of the non-principal private residence and household charges represent important steps in changing how local government is financed, and are the first dedicated new sources of funding for local authorities in some years. The revenues from the Household Charge support the provision of the vital services provided by local authorities.

Internationally, local services are administered by local authorities and financed by local service charges. In Ireland, local authorities are responsible for, among other services, fire and emergency services, maintenance and cleaning of streets, street lighting, planning and development services, public parks, libraries, open spaces and leisure facilities. The Local Government (Household Charge) Act 2011 provides that income from the Household Charge is paid into the Local Government Fund. Money is disbursed back to local authorities in general-purpose grants. It is considered that this approach is preferable to allowing local authorities directly retain all moneys collected from the Household Charge in their areas, as it makes it possible to equalise distribution, ensuring that those local authorities with lower populations than others do not suffer unduly as a result.

A more effective, sustainable broadening of the revenue base for local government will be achieved by the introduction of the local property tax. In addition, as noted in the Action Plan for Effective Local Government, Putting People First, if local elected members have relatively little responsibility for raising revenue, their rigorousness in prioritising its allocation, overseeing its efficient use and stewardship, and oversight in relation to the performance and management of local authority operations generally, is likely to be diminished.

An independently-chaired Inter-Departmental Expert Group was established to consider the structures and modalities for an equitable local property tax to replace the Household Charge. The Group submitted its report to me and proposals will be brought to Government as soon as possible. It would not be appropriate to comment on the content of the Expert Group’s report at this point, pending Government’s consideration of the report and the associated issues. It will then be a matter for the Government to decide on the exact details of implementation, including considerations related to the impact of the local property tax on the general funding of local authorities, taking into account the modalities involved.