LOCAL AUTHORITIES are struggling to maintain services such as housing, roads, water and sewerage because of reduced exchequer subventions and a failure to collect commercial rates and charges. Poor management and financial planning are part of the problem.
Audits conducted by the Department of the Environment have attributed the deteriorating position to the economic downturn. But the scale of the financial difficulties facing local authorities remains uncertain because pension liabilities have not been – and are not – computed.
The last government promised a White Paper on local government reform and failed to deliver. This Government appears to be no better. For more than a year now, Minister for the Environment, Community and Local Government Phil Hogan has concentrated on bringing forward revenue-raising schemes, rather than restructuring and reforming existing agencies.
Mr Hogan adopted existing plans to amalgamate Limerick city and county and Tipperary North and South councils by 2014. But ambitious proposals to amalgamate 20 city and county councils; remove planning, transport and housing functions from urban councils and reduce staff numbers by between 15 and 30 per cent were put on hold. Fine Gael and Labour Party successes in the local elections may have been a factor.
Only in recent years has the need for detailed audits, rolling three-year financial plans, value for money and public transparency been insisted upon. Even before the recession hit, significant deficits were being recorded by a number of councils.
Of these, Donegal and Meath were serious and persistent offenders. Sligo’s deficit, which was €1.4 million in 2007, ballooned to €9.9 million in 2010. Donegal, with the greatest deficit, was paying staff a special “Donegal rate”, in contravention of national guidelines, thereby increasing its annual wage bill by €1.4 million.
There are mitigating circumstances. Income from the exchequer and car tax receipts dropped by about 25 per cent and put councils under pressure. This was compounded by a failure to collect outstanding development charges and, more recently, by a fall-off in commercial rates and water charges. In such circumstances, new income streams from property charges are essential. It is equally important, however, for council managers to review all activities on the basis of cost and to establish realistic income projections.
The fact that some local authorities, such as Cork County Council, Dublin City Council and Fingal County Council have succeeded in both reducing expenditure and recording healthy surpluses shows what can be done through effective management. It is not a coincidence that these councils have also introduced consumer-friendly opening hours. Rather than operate limited opening hours, with lunchtime closures, as is the practice elsewhere, the needs of the public have been given precedence. These are welcome developments and should form a standard for public service.