The Government has approved plans to build 5,000 local authority houses next year, up by 500 on this year's target. The Minister for the Environment, Mr Cullen, is expected to make the announcement tomorrow following publication of the Book of Estimates by the Minister for Finance.
During negotiations in recent weeks with Mr McCreevy, Mr Cullen won approval for a €35 million construction grant to local authorities, although the final division of the spoils between councils will not be known until the new year.
According to Department of the Environment figures, nearly 50,000 families are on local authority waiting lists, a rise of 23.5 per cent on the 1999 total of 39,176, and housing and homeless organisations warn that the number is continuing to rise.
The Housing Statistics Bulletin produced by the Department in July reported that local authorities built just over 800 houses in the first three months of the year, began work on nearly 750 and bought 50 more.
The Chambers of Commerce of Ireland and the Irish Hotels Federation yesterday warned the Minister that the Government would be breaking the law if it failed to offer Budget increases to local authorities to help them fund their €114 million benchmarking pay bill.
The benchmarking bill, the CCI said, was beyond the control of local authorities since they had no role in the negotiation of the award. The CCI and the IHF fear that local authorities, which are already hard pressed, will sharply increase business rates to meet benchmarking costs.
The Minister for the Environment offered no guarantees during yesterday's meeting.
Cliff Taylor, Economics Editor, adds: The overall increase in total Government spending in the Estimates is expected to be around 5 per cent compared to this year's forecast outturn. Further money will be allocated on Budget day in social welfare and other areas, which is likely to bring the total increase in spending to around the 6 per cent mark.
The estimated rise of €1 billion in the public sector pay bill next year is putting pressure on the budgetary arithmetic and will mean tight control on non-pay spending in most areas. Mr McCreevy is expected to make it clear that the benchmarking payments will depend on verification of the delivery of related productivity improvements, on which discussions are now under way.
A number of Departments are expected to seek extra revenue through higher charges to the public. Among the charges which may be increased is that facing people using accident and emergency units in hospitals, currently almost €32, unless they are referred by a GP.
Increasing charges reduces the net cost to the Exchequer of running Government Departments. For this reason, the net increase in spending next year is likely to be a little below the expected gross rise of around 5 per cent.