Michael Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

1946. To ask the Minister for Housing, Planning, and Local Government the criteria for borrowing money (details supplied); and if he will make a statement on the matter. [37460/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Borrowing of money by local authorities is governed by section 106 of the Local Government Act 2001 (as amended). The decision to borrow is a reserved function of the elected members of local authorities, who have direct responsibility in law for all reserved functions and are accountable for all expenditure by the local authority.  As such, it is a matter for each local authority to determine its own spending priorities in the context of the annual budgetary process, having regard to both locally identified needs and available resources.

Under section 106, borrowing by a local authority must be sanctioned by the appropriate Minister, i.e. the Government Minister with policy responsibility for the policy area concerned. If the borrowing is in respect of matters which relate to the responsibility or interest of only one Minister then it is the responsibility of that particular Minister. If the matter relates to the responsibility or interest of two or more Ministers, it is the responsibility of the Minister which has the greatest interest in the matter.  In the event that there is no clear sanctioning Minister my Department may also sanction loans or co-ordinate a loan approval request seeking observations from a number of Departments on different aspects of a loan sanction request.

All sanctioning Departments are required to  engage with my Department, which will provide an assessment of the financial viability of potential loans insofar as individual local authorities are concerned, and an assessment as to whether the borrowing can be accommodated within the context of the fiscal rules. 

Upon receipt of an application my Department initiates a process of assessment. The purpose of this is to provide the sanctioning Department with observations on the suitability of sanctioning the loan both from a General Government Balance and a financial and affordability perspective. In reviewing requests for sanction, priority is given to loans for infrastructural investment and contractual commitments.