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Local government model and funding to "change considerably" this year

When Irish Water takes over water services, Minister Hogan said local authorities will have lower funding needs.

Image: Sam Boal/Photocall Ireland

MINISTER FOR ENVIRONMENT, Community and Local Government Phil Hogan has said 2014 will see significant changes in the local government model and the way in which it is funded.

Starting this year, the Department of Finance will begin paying funds collected through the property tax into the Local Government Fund, which will then be allocated to local authorities to fund services. Before this, property tax money had been kept in the coffers, with Minister Michael Noonan saying it would be used to reduce the deficit.

“The local government funding model will change considerably in 2014,” Minister Hogan said in response to a parliamentary question.

In his question last month, Labour TD Kevin Humphreys asked for a comparison of 2013 general purpose grant allocations for local authorities but was told by the minister that this would be “inappropriate”.

Among the reasons involved is the fact that a large component of the cost base of each local authority, namely the operational cost of delivering water services, is transferring to Irish Water and therefore direct local authority funding needs are lower in 2014.

These grant allocations for this year have been made on a city and ‘county at large’ basis, whereas separate town council allocations were made in previous years.

Figures show that local authorities received some €71.25 million from an annual charge for residential properties which are not the owner’s only or main residence. 2013 was the final year of  operation for that charge and Hogan assured Humphreys that the general purpose grant allocations, despite the lower funding needs of local authorities this year, would take this into account.

Read: Dáil debates bill to deal with ‘crisis in Irish towns’>

Read: Local Government Fund expenditure estimated at €1.21bn this year>

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