Joan Burton (Dublin West, Labour)
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623. To ask the Minister for Housing, Planning, Community and Local Government his plans to tackle the growing unsustainable reliance of the local authority sector on commercial rates for its income; and his further plans to redress this imbalance through increasing central government allocations to the sector. [31501/17]

Joan Burton (Dublin West, Labour)
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624. To ask the Minister for Housing, Planning, Community and Local Government his plans to reform and modernise the commercial rates system in order to rebalance local authority financing and reduce the burden on business. [31502/17]

Joan Burton (Dublin West, Labour)
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625. To ask the Minister for Housing, Planning, Community and Local Government his plans to improve the efficiency and effectiveness of the commercial rates collection process; and his views on whether a centralised model either through the Office of the Revenue Commissioners or a lead authority approach in which one local authority provides the service on behalf of the other local authorities is appropriate. [31505/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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I propose to take Questions Nos. 623 to 625, inclusive, together.

Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation pursuant to the Valuation Acts 2001 to 2015. The levying and collection of rates are matters for each individual local authority, as are the costs of collection.

Commercial rates form an important element of the funding of all local authorities. However, the legislative basis for the levying of rates is spread over a number of enactments, some dating back to the 19th century. Many of the provisions are outdated and not suitable for business trends in the modern era. My Department has developed legislative proposals to modernise and consolidate the legislation governing commercial rates.  The Government approved the drafting of a Rates Bill at its meeting on 11 April 2017.  These proposals will be subject to pre-legislative scrutiny in due course.

The Debt Management Project Implementation Board, on which my Department was represented, was established by the Minister for Public Expenditure and Reform in February 2015, to progress the recommendations of the Debt Management Review, which was published in 2014.  The Project Implementation Board concluded its work in 2016 and recommended that a Central Collection Agency was not justified at this time.  This was due to the fact that the improvements which had been made by the Public Sector Bodies (PSBs) and the targets set for those PSBs for the period to 2018 were close to those that might be expected of a Central Collection Agency.

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, funding from my Department, and from other Departments and agencies for a range of activities.  While capital funding levels declined in line with national economic circumstances, they have now started to increase significantly again.  

The monetary amount of each income source to local authorities in the years 2010 - 2015 is set out in Table 1 while Table 2 sets out each revenue income source as a proportion of the total. Table 3 sets out the total capital income over the same period.

Table 1.

Table 2.

* Other income includes: the General Purpose Grants (GPG) which were paid to local authorities until 2014; Local Property Tax (LPT) allocations which commenced in 2015 and replaced GPGs; the County Charge which ceased in 2014 when local authorities and the former town councils  merged; and Pension Related Deductions which local authorities retained as income from 2009 to 2015.

Table 3.

It is important to note that, while income from commercial rates in 2015 makes up an increased proportion of local authorities' income compared to previous years, the quantum of rates income has not increased significantly in monetary terms.

Central Government funding of local authorities similarly presents a complex picture, with transfers, both current and capital, coming from a wide range of Departments and Offices, not solely from my Department, 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. 

The Comptroller and Auditor General reports on the Central Government funding of local authorities as part of his Annual Report. This report provides an overview of the funds flowing from and through central government sources to local authorities and the purposes for which funds have been provided. The latest report, for 2015, is available at the following link; 

www.audgen.gov.ie/viewdoc.asp?/documents/annualreports/2015/Report/En/Chapter4.pdf.

I am satisfied that the current funding model is enabling local authorities to meet an appropriate level of service provision across the State, from the most rural and sparsely populated areas to the large urban centres. As local authorities vary significantly from one another in terms of size, population, public service demands, infrastructure and income sources, my Department keeps the funding system under constant review and works with all local authorities to ensure the local government sector can meet existing and emerging challenges.