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Under Pressure

Explainer: Why a row over the annual budget could see Dublin councillors replaced by a 'city commissioner'

Dublin Councillors deferred a Budget vote on Monday to allow for further discussion with the Government.

LOCAL COUNCILLORS IN Ireland possess few Executive Functions. One power they do have is passing an annual Council Budget, however.

In the case of Dublin City Council, it’s a relatively benign event. 

The draft budget report, which is drawn up by council management, was set before councillors this week. It had an estimated expenditure for the coming year of just over €1 billion. The council expects to spend €977 million this year, the report said.

“Significant additional income must be raised if services are to be maintained,” however, it said.

“The draft Budget points to a Local Government funding system that does not provide the required financial resources to sustain Dublin City Council services.”

Unlike past years – when councillors made little or no change to business rates in the City and the Budget passed largely without consequence – the council has been grappling in recent weeks with reduced finances for the year ahead.

As DCC Chief Executive Owen Keegan told councillors in a letter last week, Local Authority funding from Central Government has “consistently shifted” in recent years.

This shift, he said, has been “disadvantageous” to Dublin, showing an “absence of understanding of the funding challenges facing Dublin City.”

The deadlock this year is due, in part, to increased council costs stemming from a loss of rates income worth €8.4 million on Irish Water-owned properties, which will not be compensated by Central Government despite prior assurances. 

Commercial rates on properties in the city owned by Irish Water amount to €23.6 million. The Government has essentially decided this year to take €8.4 million away from DCC to give to other Local Authorities around the country. 

The question facing councillors now is do they increase charges in the city, request an extension from Housing Minister Eoghan Murphy in order to sort matters out, or do they lose their jobs? 

Should they fail to pass a Budget, elected representatives face being replaced by a ‘Commissioner’ appointed by the Minister. So, how did we get to this point?

‘Unpalatable Choices’

On Monday, councillors adjourned a debate on the ‘necessary’ increases to charges in the city to make up the shortfall, as suggested by Keegan, including increasing commercial rates, council rents and the tolls for the Tom Clarke (East Link) Bridge. 

A number of councillors voiced opposition to the budget proposals. Others said representatives should meet with Housing Minister Eoghan Murphy to discuss the proposals before approving a Budget. 

Lord Mayor Paul McAuliffe said councillors had a responsibility to pass a budget but that they’d also a responsibility to Dubliners.

McAuliffe, who described the proposals as “unpalatable choices”, said the council should use the adjournment to put pressure on decision makers before circulating a letter sent to Murphy earlier this week.

In the letter, McAuliffe said the Council only became aware of the new way rate payments were being calculated in October.

McAuliffe said the Government had committed that the transition to Irish Water would be revenue neutral for local authorities.

At the council meeting, Fine Gael councillor McCartan said that €8.4 million pales in significance in comparison to the €32 million in arrears owed to the council by tenants in social housing.

He said it was an indictment of council officials that they hadn’t dealt with that issue. “That has not been addressed,” he said.

The Council now has just over one week to pass its Budget. For its part, the Department isn’t playing ball.

In a statement following the Budget deferral, it said that if Dublin City Council had decided to reduce Local Property Tax by 5% instead of 15% they could have raised the €8 million shortfall. 

‘No Logical Reason’ 

The council is overseen by the Department of Housing of Housing, Planning and Local Government. So, what happens if a Council fails to pass a Budget for the year ahead? 

Councillors have two options:

  • Ask Housing Minister Eoghan Murphy for an extension.
  • Fail to pass a Budget (in which case the council is dissolved and Councillors are out of a job). 

A similar scenario arose back in 2001. On that occasion, councillors extended Budget discussions into January 2002 amid an ongoing debate around water charges in the city.

According to a Housing Department spokesperson, the Minister could remove Councillors from office if a Local Authority “refuses or wilfully neglects to comply with any other express requirement which is imposed on it”. 

In the event of a council failing to pass its Budget, the Minister for Housing appoints a Commissioner in place of councillors. 

The Commissioner – most likely a Department Official – takes over duties of elected members in the Council Chamber – in this case 63 elected members, according to Labour councillor Dermot Lacey, who said Dublin City Council was dissolved in 1959 and 1973. 

There’s no definite date set for when the Council would return - but it’s likely it would not be until the next Local Elections.

As a possible dissolution looms, Labour’s Lacey said: “The Minister has responsibility to fund local government and he isn’t.

“I think the Minister would be quite pleased to abolish Dublin City Council,” said Lacey. 

Of course, councillors still have one week to thrash matters out. It is likely Dublin City Council will pass its Budget, Lord Mayor Paul McAuliffe told, although questions remain about the effect on businesses if the Council has to increase city rates.

“You can’t just roll over when the Government reduces such a huge chunk of funding for really no reason,” McAuliffe said.

“If it was a cost-saving exercise you could listen to that argument. But there’s no logical reason why you’d take money away from Dublin and redistribute it to other counties that don’t have [Irish Water] assets.” 

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