Written answers

Tuesday, 31 March 2015

Department of Environment, Community and Local Government

Local Authority Finances

Photo of Clare DalyClare Daly (Dublin North, United Left)
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625. To ask the Minister for Environment, Community and Local Government if he is aware that the management of Sligo County Council believe it will be difficult for the council to submit a sustainable financial plan to his Department without knowing his Department's funding commitment to the council over the next five years; if he is further aware that the council will need to hear precisely, or receive in writing, the funding commitment of his Department over the term of the financial plan; if he will put in place a policy of providing local authorities with advance notice of multi-annual funding proposals; if he will provide Sligo County Council with precise details of the funding he will provide to it over the next five years; and if he will make a statement on the matter. [12860/15]

Photo of Alan KellyAlan Kelly (Tipperary North, Labour)
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Sligo County Council’s financial position is of serious concern to me. While it is a matter for individual local authorities to manage their own day-to-day finances in a prudent and sustainable manner, my Department is in regular consultation with the Council in relation to its financial position, including in relation to the agreement of a long term financial plan. Local Property Tax (LPT) was introduced to provide an alternative, stable and sustainable funding base for the local authority sector, providing greater levels of connection between local revenue raising and associated expenditure decisions. In accordance with the decisions taken by Government, 80% of LPT will be retained locally to fund vital public services in 2015. The remaining 20% will be re-distributed to provide top-up funding to certain local authorities that have lower property tax bases due to the variance in property values across the State and to ensure that their 2015 LPT funding levels are at least equalised at 2014 General Purpose Grant levels. Every local authority has the power, from 1 July 2014, to vary the basic rate of LPT by up to 15%. In the event that a local authority decides to increase LPT rates, they will retain 100% of the additional LPT collected.

Where a local authority decides to reduce LPT rates, the full cost of that reduction will be reflected in a reduced LPT allocation to that local authority. In particular, for those local authorities entitled to receive funding from the equalisation fund, as is the case with Sligo County Council in 2015, the Government has decided that the level of funding they will receive from the equalisation fund will be set at the level that they would be entitled to had they not reduced LPT rates. As such, local authorities will not be compensated for the loss of income arising from the downward variation of the rate.

Sligo County Council’s provisional Local Property Tax allocation in 2015 is €9,993,352. This includes an allocation of €1million in additional funding for 2015 for the Council to assist it to take the steps necessary to move to a more sustainable financial position. The payment of the additional funding for 2015 remains fully conditional on a realistic and achievable financial plan, which charts a path to long term financial sustainability, being agreed between my Department and the Council; this process is on-going. Matters relating to equalisation levels and distribution of LPT for future years will be reviewed as necessary and appropriate. My Department is in regular communication with the Chief Executive of Sligo County Council and his staff in relation to the development of this essential financial plan and have agreed the approach to financial projections that should be adopted in relation to both future funding and expenditure lines as is normal practice in the development of multi-annual financial projections for any organisation.

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