Frontline services in Clare County Council will be reduced if the Minister for Environment, Community and Local Government Phil Hogan follows through on a threat to “withhold” allocations of funding for the third quarter of the year. The money is due from the Local Government Fund but some of it may not now be paid because of non-compliance with the household charge.
The department confirmed to The Clare Champion that it will be issuing a circular to local authorities on Thursday advising of “possible cuts to local authority funding”.
The specifics of the cuts were not forthcoming but a spokesperson for the Department stated that the circular will give details to each local authority of the likely reductions in their allocations.
The Clare Champion understands that the reduction in funding for Clare County Council for the third quarter of this year could be in the region of between €255,000 and €382,500.
The council was due to receive a total funding of €10.2m from the Local Government Fund over the course of the year. It received the first half of this and was due to get a further €2.55m from the fund for the period from July to September inclusive. However it now appears that this will be cut by between 5% and 15% because of the level of “non-compliance” with the household charge in the county.
Fine Gael TD Pat Breen refused to refer to the dictat expected from Minister Hogan as a “cutback” insisting that the money will be paid to the relevant county councils later this year.
Opposition TD Timmy Dooley claimed the move is “effectively bullying authorities into collecting this household charge” adding that any reduction in funding will impact frontline services. He likened the move to penalising the post office for people not buying a television licence.
“The Department of Environment are effectively bullying local authorities into collecting this household charge. I don’t think that it’s right or appropriate that the local authorities should be penalised. I don’t know how the local authorities could be doing any more than they’re already doing.
“It seems ridiculous to put pressure on in this way, to the staff and management of the council. It’s a decision to be taken by the people. Everybody knows about it. They’ve a duty to pay and I don’t think that you should penalise the collector. It doesn’t happen in relation to road tax. It doesn’t happen in relation to the collection of any other taxes. The Revenue Commissioners don’t have the threat of a cut to their budget if they fail in terms of projected tax intake,” Deputy Dooley stated.
“At the end of the day, the council provide the facilities for people to pay. They can’t force people to pay. Everybody knows what they’re required to do,” he added.
The ’Champion understands the compliance rate in relation to the household charge in Clare is approximately 62% and that Clare County Council is in the top half of local authorities nationwide in terms of collection.
The Local Government Management Agency released figures last month showing that more than 27,000 households in Clare had registered for the tax up to June 13 and that in excess of €2.7m was collected in the county.
However, when contacted on Wednesday, it said there “is no further update in relation to county breakdown” and that it does not know the number of households in the county that are liable to pay. Therefore it did not have the information on the compliance rate among Clare households.
Deputy Dooley said he did not envisage the cut affecting payment of council workers but said the impact will be on “discretionary spend” in areas like maintenance.
“Any reduction in the Local Government Fund of course is going to impact on the various programs that they have and the ability to maintain water services, the roads, sewerage system and housing,” he said.
The Fianna Fáil deputy called for the letters to the council to be withdrawn.
“The threat has to be withdrawn. I certainly don’t believe, regardless of the level of collection in the various areas, no penalties should be applied to the various local authorities, none whatsoever,” he stated.
“This is a measure that has no capacity to improve the level of collection. I don’t think the council can do any more than what’s already done. Issuing threats like this, and effectively getting into an exercise in bullying of this nature, has no capacity to increase revenue, so I feel ,yet again, the Government have got it wrong and I think very quickly they’ll recognise this.”
Labour TD Deputy Michael McNamara was pragmatic in his response pointing out that if money isn’t available, reductions in spending are inevitable.
“If the money doesn’t come in, services can’t be provided, it’s that simple.”
Deputy McNamara said the household charge may be unpopular but a property tax is necessary and he denied it is a tax too far.
“You can either have it or abolish local government services. Every service has to be funded unfortunately.
“The bottom line is that the State will still borrow €15 billion more this year than it will bring in through taxes. Not alone is it not a step too far, there’s a long way to go.”
Fine Gael’s Joe Carey said he wasn’t aware of what plans there are to withhold funds.
“I’m not aware of what’s on the table so it’s pure speculation,” he said on Wednesday.
“But the Minister has made it clear that the household charge was to be put into services and if the money isn’t collected the services will suffer and that’s very unfortunate,” he said.
Deputy Pat Breen believes the move by Minister Hogan is merely to encourage local authorities to work harder to collect outstanding household charges.
“The collection rate in Clare is 56%. Nationally it’s about 60%. What the minister is trying to do is get it up to 75%. I was talking to Minister Hogan in relation to it this afternoon. Some local authorities might say ‘we can’t do without this funding, things are tight enough.’ But he wants to put an incentive in for local authorities to collect the household charge tax,” the Fine Gael TD explained.
“The third round of funding for local authorities will be made available in September. Each local authority is getting a notice from the Department of the Environment over the next few days, saying that some of the funding is going to be held back. It’s not being cut.
“Why they are doing this is because some local authorities haven’t made much of an effort to collect the household charge,” he outlined.
Deputy Breen claims that it’s largely the responsibility of Clare County Council to collect the household charge in Clare.
“It is. They’ll argue that but he wants to put an incentive in to collect it.
“What he’s doing is holding back between 5% and 15%. I haven’t the exact percentage for Clare yet because it won’t be known for a day or two,” he said.
However Deputy Breen also said that the withheld money will be paid to the relevant county councils later this year anyway.
“When it comes to the end of the year he [Minister Hogan] would hope that money will be paid back to them in the fourth tranche. I think the minister’s intention is to pay them their money anyway but he wants to hold it back for the moment to try and see if the local authority will give some assistance in collecting this money,” he reiterated.
Clare County Councillor Richard Nagle said it would be “most unfair” to withhold the money from the local authority.
“We already have a serious reduction in income from the development levies because of the collapse of the construction sector and Clare County Council has been doing everything possible to collect all outstanding monies.
“We’re all aware that there was considerable confusion concerning the household charge and confusion as to methods of payment.
“To adopt that strategy, at this stage, I think is most unfair.”
Councillor Nagle feels the introduction of the charge has been handled clumsily.
“This whole process was very badly thought out to begin with and I think that there needs to be a period of grace to allow the people who haven’t paid the opportunity to pay up and to give the local authority a chance to collect outstanding monies. I’m aware that at one stage, quite recently, Clare County Council did not have a list from the Department of who had actually paid and not paid. So it wasn’t possible for the local authority to do anything at that stage.”
The Ennistymon councillor said that although every effort has been made to maintain services, there aren’t many more efficiencies that can be made.
“Plans have been drawn up to try and maintain the level of service that exists and I think it has been maintained reasonably well up to now. But there is only so much of a reduction that a local authority can take” he claimed.
Deputy Dooley agreed the household charge was mismanaged by the Government and he believes the uptake is lower than hoped because people are frightened about possible future property taxes.
“They are afraid that if they commit to this €100, and many people feel that is manageable, that it will allow the Government to increase the charge in a very considerable way next year. People are hearing tales of property taxes in the regions of thousands of euros per annum and that has frightened a lot of people.
“In my view that’s the reason why the compliance has been low. So it’s a failure of this Government to communicate effectively with the public in relation to their projected property taxation measures,” he said.
Clare county manager Tom Coughlan stated that “Clare County Council has not received any correspondence on the matter as of Wednesday evening and, therefore, is not in a position to comment further.”
Mayor of Clare Pat Daly said he was “extremely disappointed” on the basis that Clare County Council were not responsible for collection of the household charge and staff at the council went out of their way to assist the Local Government Management Agency in the collection process.
“I understand the charge was collected from approximately 62% of the households here and that figure was above average nationally.”