OPINION:SHOW ME the local election candidate who argues for the restoration of revenue raising powers for local authorities, explains how it should be done and I'll likely vote for him or her, writes PETER MURTAGH
Most politicians won’t touch this issue with a barge pole because they operate in a political culture that eschews the sort of leadership required to tackle problems in an honest and open way. Most of our politicians, local and national, prefer clientelism and the politics of cute-hoorism, to real leadership. Of course, it’s substantially our own fault: we (the electorate) are not good at making them address real problems and come up with real solutions – solutions that will not please everyone but, properly argued and reasoned, make sense and are for the common good.
Take local government financing. Last week in this space, I argued that the abolition of domestic rates in the late 1970s had hobbled local authorities financially and stimulated bad practices, such as levies linked to planning permissions and inappropriate deals struck in private between councillors and developers. To those you could add the effects of four decades of underfunding – below-par community services and facilities, poorly maintained roads, especially secondary roads, the list could go on.
Moreover, it will stay this way until local authorities are once again able to raise revenue through some form of general local taxation. How many local election candidates will argue for this during the campaign, even though most, if not all, know something of this nature has to happen sooner or later? Not many.
In fairness to Fine Gael, their local government policy launched last Thursday noted that in government, the party would legislate . . . but the policy then ducked the specifics. A new law, it said, would allow councillors “choose between a number of different revenue-raising sources”.
Fair enough, but not far enough – there was no detail. The party kicked to touch, citing the forthcoming Commission on Taxation report. A lost opportunity to demonstrate political leadership.
According to Fine Gael, about 42 per cent of local government funding comes from central government and 58 per cent from commercial rates, charging for services and various other levies. The bit that’s missing is what used to come from domestic rates.
In England, about 25 per cent of local government funding comes from the council tax, the property-based tax that in 1993 replaced Margaret Thatcher’s hated poll tax (which in essence was a tax on simply being alive).
The average council tax charge in England is £1,146 (€1,289) but the amount charged ranges across eight property valuation bands and varies between £845 for band A to £2,536 for Band H.
The valuations have not kept pace with rising house prices (a persistent problem with rates) and a fresh valuation is due but, surprise, surprise, the government has postponed it until after the next UK general election.
Like all systems of taxation, the council tax is imperfect but it has widespread acceptance on the basis that people understand if they want local services, they have to be paid for. But what’s really important about the council tax is that the overwhelming majority of people in the community make a contribution to local services through a payment which goes directly to their local council.
From this comes a sense of ownership – which is the key element in a healthy democracy – and a proper desire to hold accountable those whom we trust with our money. That crucial link, of ownership and accountability, between residents and their local authority has been lost in Ireland since the abolition of rates.
If our local authorities were obliged to budget annually and tweak a domestic property-based levy accordingly as local needs and priorities changed, the electorate would surely take their responsibilities more seriously in whom they elect.
Any improvement in the quality of our local politicians would be a good thing. And that shouldn’t be difficult – we’re starting, after all, from a fairly low base.