Taxation revenue to fund local authorities

The Minister for Environment has announced plans to divert taxation revenue to provide funding for local authorities. Mr Dempsey said his intention was to allocate a certain percentage of taxation to fund local authorities. He told an IMPACT conference on local government in Dublin yesterday that he had not yet decided whether this would be deducted from PAYE, VAT or some other source.

Under a system introduced earlier this year by his predecessor, Mr Brendan Howlin, motor-tax receipts are used to fund local authorities. Mr Dempsey now plans to use part of this money to pay for county road improvements, while switching to national taxation sources for funding local authorities. ail. Last July, Mr Dempsey told the Dail he was not in favour of this method of funding. Mr Dempsey paid tribute yesterday to his predecessor's achievement in getting the Department of Finance to change its regulations. It had "not been easy" for Mr Howlin to get agreement for the change, as the "last thing" the Department wanted was a dedicated use for a tax.

Exact proposals for reforming the system of local authority funding had not yet been finalised, but it was hoped to have them in place by next year. It was important to provide the authorities with a measure of financial buoyancy, he stressed.

The Minister said that within five years an increasing proportion of discretionary funding should be allowed to local authorities which had proved themselves to be efficient. This would allow the authorities to plan ahead more effectively, using multi-annual budgets.

It would also address "startand-stop" funding situations where, for example, a council is forced by the nature of the financial support available to carry out road works piecemeal.

The secretary of IMPACT, Mr Al Butler, welcomed Mr Dempsey's announcement on funding arrangements, but called for more details. "Local authorities can't function without proper funding. This means we need more discretionary funding, not money handed down from the Department."

Mr Michael McLoone, the Donegal county manager, said the time for change in the Irish public service was long past. If staff were actively engaged in the process, they would embrace change rather than resisting it.

Local authorities faced a challenge in dealing with the "general cynicism and lack of trust" of those involved in county enterprise boards and other local development bodies in relation to the county council system. This was because of the "political usury and clientelism in the way things are done," he said.