Catherine Murphy (Kildare North, Social Democrats)
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413. To ask the Minister for Housing, Planning, and Local Government the current balances for development contributions, by local authority, in tabular form; what restrictions apply to their use; and if he will make a statement on the matter. [6503/24]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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Development contribution charges to be applied on developers are set at the planning permission stage but are not collectable by the relevant local authority until after the development work commences. Commencement notices are issued by the developer to the local authority and these generally trigger the raising of the charge. The normal practice is for the developer to issue a commencement notice for all units in the development at the construction start date which could mean that the full development charges are due immediately. Alternatively, a phased payment plan is agreed between the planning authority and the developer and in other cases, commencement notices are issued for blocks of units on a phased basis.

When a commencement notice is received, an invoice is raised and is shown as income in Appendix 5 (Summary of Capital Expenditure and Income) of the Local Authority Annual Financial Statements (AFS). Development levy debtors are classified as development contributions that are owed in respect of the current year and previous years, and are shown in Note 5 (Trade Debtors and Prepayments) of the AFS. Income from development contributions not due to be paid within the current year is deferred and is not separately disclosed in the Annual Financial Statement (AFS).

I take it that the question regarding current balances for development contributions refers to figures for development levy debtors. The most recent audited data available is in respect of the financial year ending 31 December 2022. The figure for development levy debtors in Note 5 of the Local Authority Amalgamated AFS 2022 was €306m, gross of any bad debt provisions. The table below sets out the amounts for each local authority for 2022. Audited figures for 2023 are not yet available.

The basis for the determination of a development contribution, and expenditure of same is set out in a development contribution scheme adopted by the elected members of a local authority, and planning authorities may make one or more schemes in respect of different parts of its functional area. The adoption of these schemes is a reserved function of the locally elected members of each planning authority, and it is a matter for the members to determine - (i) the level of contribution and the types of development to which they will apply, and (ii) the expenditure of the contributions received within the confines of the scheme conditions.

My Department is responsible for monitoring the local government sector’s compliance with fiscal rules set out as part of the management of the Stability and Growth Pact. These include the contribution of the local government sector to the General Government Balance (GGB) and also controls to be exercised under the Expenditure Benchmark requirements. Arising from the Government’s effort to meet commitments in relation to the General Government Deficit limit, local authorities have been directed that, similar to the revenue account activity, capital expenditure should not exceed capital income within the reporting year. 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 themselves. However, within these overall limits, there is additional capacity for the expenditure of built-up capital balances and own resources funded by development contributions on hand by local authorities, which must be sanctioned by my Department. At the beginning of each year, local authorities indicate to my Department both their expected expenditure of their own built up resources and expenditure supported by borrowing for the coming year, both of which require separate sanction. In reviewing individual requests for sanction by my Department, consideration is given to ensuring that priority infrastructural investment can proceed, that contractual commitments and on-going projects can proceed and that development contributions already collected and aligned to specific capital projects can be utilised efficiently.

Development contributions can only be levied in respect of capital funding for public infrastructure and facilities and as such cannot be used to cover current expenditure costs. Any development contributions accruing to the local authority must be accounted for separately in the Capital account of the local authority. Income from development contributions must be ring-fenced to pay for public infrastructure and facilities servicing new development and it is a matter for each local authority to determine the allocation of those incomes, having regard to the provisions of sections 48 and 49 of the Planning and Development Act 2000, as amended.