Catherine Murphy (Kildare North, Social Democrats)
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134. To ask the Minister for Environment, Community and Local Government how he envisages the funding that is to be made available to local authorities via loan mechanisms will be repaid; what, if any, is the impact of such loans on the Government balance sheet; and if he will make a statement on the matter. [17346/16]

Catherine Murphy (Kildare North, Social Democrats)
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135. To ask the Minister for Environment, Community and Local Government if local authorities are to be allowed to borrow from existing funds and what specific fund will facilitate such borrowing; and what will the impact for the Government balance sheet be; and if he will make a statement on the matter. [17349/16]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 134 and 135 together.

Arising from the Government’s commitments in relation to the general government deficit limit, the local government sector’s impact on the General Government Balance (GGB) is required to deliver a neutral position each year. While my Department oversees the contribution of the local government sector to the GGB, 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. However, within the overall limits, there is capacity for non-mortgage borrowing and the expenditure of capital balances on hand by local authorities, which must be sanctioned by my Department. In reviewing requests for sanction, consideration is given to ensuring that priority infrastructural investment, contractual commitments and on-going projects can proceed, and that development contributions can be utilised efficiently.

With regard to funding announced as part of the Local Infrastructure Fund, I expect that local authorities will continue to avail of loan finance available from the Housing Finance Agency. However, budgetary matters are a devolved function of local authorities and it will be incumbent on individual authorities to ensure that any new borrowing is matched by appropriate repayment capacity.