Councils face cuts over household charge collection rates

CASH-STRAPPED local authorities are facing further cuts to funding in two months’ time if they fail to increase their household charge collection rates.

Donegal, Offaly, Louth, Laois and Meath County Councils are at the greatest risk of cuts.

Minister for the Environment Phil Hogan is withholding more than half of the fourth-quarter payment of the Local Government Fund grant, due in the coming days, until November.

The payment of the final portion of the grant will depend on the success the local authorities achieve in collecting the household charge.

Some €80 million will be released to local authorities in the coming days. The remaining €82.75 million of the grant, one of the main sources of funding for most local authorities, will be withheld until November.

Local authorities which have by then collected 65 per cent of the charge will get all of their remaining money due. Those who have collected more than 60 per cent will sustain a 0.5 per cent cut and those who have not reached 60 per cent will have their money cut by 1 per cent.

Dún Laoghaire-Rathdown, Kerry, Mayo, Clare, Sligo, North Tipperary and Leitrim County Council and Dublin City Council are the only local authorities so far in the clear. These eight have already exceeded the 65 per cent threshold, with Dún Laoghaire-Rathdown achieving by far the best results with 82.56 per cent.

However, some local authorities will struggle even to meet the 60 per cent rate. Donegal is doing worst at 50.46 per cent, followed by Offaly (54.30 per cent), Louth (55.38 per cent), Laois (55.62 per cent) and Meath (56.76 per cent).

This will be the second time this year Mr Hogan has reduced his funding of local authorities. The third-quarter payment was reduced by more than €15 million, with local authorities losing between 1 and 3 per cent depending again on their success at bringing in the charge.

Smaller rural local authorities will again be hardest hit by any cut in their payment from the fund. The Local Government Fund is not shared equally. Local authorities without much of an income from commercial rates get proportionately far more.

In 2011, the fund accounted for 6.7 per cent of Dublin City Council’s annual gross expenditure; in Leitrim it was 30.7 per cent.

Unfortunately for local authorities most dependent on central government support, the rate of payment of the household charge has been considerably below the national average of 63.11 per cent.

Mr Hogan said in withholding the grant he was “incentivising” local authorities to collect the charge.

His announcement comes just a day after Taoiseach Enda Kenny told the Dáil local authorities could not withhold payment of the Higher Education Grant to encourage payment of the household charge. Clare and South Tipperary County Councils had sought proof of charge payment before administering the grants.