Written answers

Wednesday, 30 April 2014

Department of Environment, Community and Local Government

Local Authority Finances

Photo of Michael McNamaraMichael McNamara (Clare, Labour)
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513. To ask the Minister for Environment, Community and Local Government if he will grant permission to Kilrush Town Council to utilise its own resources, which have been saved in a capital fund for the provision of an astro turf sports facility, to co-finance the grant approved from the Department of Transport, Tourism and Sport and IPB Insurances Limited; and if he will make a statement on the matter. [19651/14]

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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In February 2009, my Department set out details of the financial requirements for local authorities relating to their overall management of capital and current accounts. These requirements flow directly from the requirement for Government finances as a whole to be managed in accordance with the Stability and Growth Pact, established under the Maastricht Treaty, and the associated limitation on budget deficits. The local government sector must not impact negatively on the General Government Balance ( GGB ) in any one year.

In order to stay within the overall GGB limit, it is necessary for local authorities to maintain both their current and capital accounts broadly in balance. The only restriction on local authorities is that, in aggregate, capital income equals capital expenditure in the year. Balance is only required at an overall sectoral level and this allows considerable scope for authorities to draw on their existing capital reserves as an element of their overall investment programme. The precise manner in which capital and current accounts are managed in order to achieve the overall balance necessary is a matter for individual local authorities.

It is a matter for every local authority, including Kilrush Town Council , to determine its own spending priorities in the context of the annual budgetary process, having regard to both locally identified needs and available resources within the GGB limits as set out. Where a local authority wishes to incur capital expenditure in excess of their capital income in any given year, they must apply to my Department for sanction to ensure that such expenditure can be facilitated within the overall GGB limit requirements for the sector for the year in question. My Department has recently provided such sanction to Kilrush Town Council for 2014.

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