TheJournal.ie uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Click here to find out more »
Dublin: 17 °C Tuesday 21 May, 2013

Commission calls for legal rules requiring Councils to break even

Right now councils only have an informal requirement to balance their books – something the Troika wants addressed.

Ireland's city and county councils currently have no legal requirement to balance their books and avoid con
Ireland's city and county councils currently have no legal requirement to balance their books and avoid con
Image: Mark Stedman/Photocall Ireland

THE EUROPEAN COMMISSION has called for the creation of legally binding rules requiring Ireland’s city and county councils to keep balanced budgets on an annual basis.

The call is made in draft documents compiled by the Commission following its last quarterly inspection of Ireland’s affairs, and obtained by TheJournal.ie.

In the documents, the Commission cites the “de facto current fiscal rule” which requires councils to balance their own budgets in order to minimise their requirement on funding from the central government.

There are calls, however, for this to be given a legal footing in order to ensure that the difficult work needed to bring the government deficit under control was not undermined by losses at local council level.

Specifically, Brussels asks for for a comment so that “local authorities’ contribution to general government will be held to zero as a rule as of 2013″.

The document suggests pursuing a memorandum of understanding with each local authority, asking each to affirm its commitment not to overshoot its budget.

The commitment could also be included in forthcoming legislation planned by environment minister Phil Hogan to merge town and county councils, and amalgamate city and county councils in Limerick and Waterford, reducing the overall number of councils from 114 to 31 by next year.

The terms of the Memorandum of Understanding for the Irish loan outlined an agreement that the Departments of Public Expenditure and the Environment would agree “a protocol” to ensure that the local government was “managed in balance over the medium term”, including balanced budgets for 2013.

The EU-IMF loan also requires Ireland to submit details on the main income and spending of local authorities on a quarterly basis.

Projections forming part of the bailout deal include a €200 million loss between Ireland’s five county, five borough, 29 county and 80 town councils for 2013.

This was reduced to €125 million by the Irish government in its figures for Budget 2013, however.

More: Read all of TheJournal.ie’s ‘Euroleaks’ coverage >

Read next:

Comments (20 Comments)

  • The Councils also need to provide justification and value for money on spending. They budget published by Kildare CC shows a spend of some €750,000 for parks cleaning and refuse collection….The largest park to me is around 10-20 acres, has about 5 bins which are always overflowing and never seem to be collected. If this is characteristic of all towns in the county how in the name can they be spending the money?

    Reply
  • Certainly recommend this. It be a step in the right direction.

    Reply
    • I agree MC. However if councils are required by statute to balance their books, why not national governments?

      Reply
    • Cannot understand why they don’t balance their budgets as it is . Surely they have to account for every cent spent ? The figures they produce I assume are given to the government to be part of their budgeted figures . So if the government accept non budgeted figures how can they get the total economy’s figures correct ?
      The mind boggles !

      Reply
  • mart_n 11/01/13 #

    I wonder who’ll be liable to pay the penalties if they don’t keep budgets balanced. I’m guessing it won’t be deducted from their own salaries anyway!

    Reply
  • Funny how in the last few days with some degree of entry back to the market, possible sale of government interest in aib , a good Christmas for the domestic economy the troika decide to speak out . Confidence seemed to be lifting slightly. The eu presidency and kenny in my opinion seeming to perform well in Europe we get kicked back into our box. The economist prints an editorial recommeding help for ireland. we meet the vast majority of targets set for us. We dont do a greece and have debt write off and second bailout.Then Just in case you think of asking for a deal on bank debt remember you are still bad boys and girls…time will pass and eventually we will get out of this but we need to never forget this …remember we held a grudge and contempt for the Brits for 800 years time to swap the contempt

    Reply
  • The degree of intrusion into how we run our country is staggering. Humiliating. And 21% of you would vote the party that invited this on us back into power.

    Reply
  • The European Commission in principal recommending our councils to balance their books is not unreasonable ,we do owe the troika a lot of money.but if a european policy of fines is created as a result of the councils inability to reform their services then we should be very worried and at all costs easiest this.this would be the equivalent of a money lender calling to your door and saying he wants two grand next week because HE didn’t come get his 500 last week,does that make sense,Europe must understand that the Irish as citizens cannot be expected to pay huge daily fines because of the incompetence of our leaders,in Ireland we have no control of services like councils or hospitals or transport because our leaders ,or management have their positions cemented in place with a system of no responsibility which has been created under the watchful eye of Europe.the European Commission has failed the Irish people in allowing our very intelligent population be gradually disenfranchised by a long established fraternity of characters that would make George Orwells pigs look good.( maybe that’s harsh ,but those pigs were organized!!) So Europe ,if the services that we pay for don’t deliver in terms of value for money ,then the councils will be fined alright,but they’ll be fined by us the people or not at all.

    Reply
  • Great idea on paper, but its going to cost more to merge than the savings will generate.

    Another FG/Labour spend a million to save 50,000

    Reply
  • I wonder if they are telling the Commission that they are increasing the number of Councillors in Dublin by 50…..

    Reply
  • Looks like a deal on bank debt is off the cards.

    Reply
  • Altho i dont like the way the troika are poking their nose in almost everything in every article on journal today

    I do agree with them on this we should be running balanced budgets at council level its just a shame it takes a boom and bust and a a bailout for the country to be spoon fed basics like this why could t this be all done 2000-2008

    Reply
  • Yes master ! Lets tip our hats to the European gentry.

    Reply

Add New Comment