Catherine Murphy (Kildare North, Social Democrats)
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2153. To ask the Minister for Housing, Planning, Community and Local Government the year in which the needs and resources model was adopted for the purposes of the distribution of the general purposes grants to local authorities; if in deciding that no local authority would lose financially in the context of moving from general purposes grant to LPT, if the needs and resources of all local authorities were reassessed; if not, the way in which new needs are accommodated; his plans to carry out a general assessment of needs and resources; and if he will make a statement on the matter. [26694/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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The Needs and Resources Model was developed and first used in 2000 to assist in the determination of the allocation of General Purpose Grants (GPGs) to local authorities from the Local Government Fund. The aim of the model was to bring about equalisation between local authorities over time so that each would have sufficient resources, from a combination of central grants and local income, to provide a reasonable level of services to their customers.

Local authorities’ cost and income bases vary significantly from one another as a result of their size, population, public service demands, infrastructure and income sources, which means calculating an appropriate distribution of these grants has been complex.  A number of factors were taken into account as relevant, including the overall funding available for local authorities, the estimated cost to each authority of providing a reasonable level of service to their customers, the income each authority should generate from local sources and the necessity to provide each authority with a baseline allocation to support its financial stability.

Local retention of Local Property Tax (LPT) began in 2015 and is now established as an essential source of funding for the local government sector, which reduces reliance on central funding. In accordance with decisions taken by Government regarding the distribution of LPT funding, every local authority has a minimum level of funding available to it known as the LPT baseline. The LPT funding baseline in 2017 is linked to previous GPG amounts and Pension Related Deductions retained by authorities in 2014.

The funding system that applies to local authorities is a complex one, as authorities derive their income from a variety of sources including commercial rates, charges for goods and services and funding from Central Government. Central Government funding of local authorities similarly presents a complex picture, with transfers, both current and capital, coming from a range of Departments and Offices, for a variety of purposes. Some streams of funding are delivered directly from funding departments to local authorities, while others are routed through departmental agencies.

Notwithstanding the constrained fiscal situation generally, I am satisfied that the current overall funding model enables local authorities to support an appropriate level of service provision across the State. My Department keeps the overall funding system under review and works with all local authorities to ensure the local government sector can meet existing and emerging challenges.

Matters relating to LPT allocation methods and equalisation for future years will be reviewed as necessary and appropriate.