Road funding to be first casualty

Roads across County Clare look set to be the first casualty of the cuts to local government funding announced last week.

 

County manager Tom Coughlan was keen to stress that contractual commitments will be met and jobs are safe in the council’s roads department but he made it clear he wants the council’s books to balance at the end of the year and that diminished services looks likely.

In a report circulated to the 32 members of Clare County Council after the Department announced the “adjustment” of €974,524 in the authority’s allocation from the Local Government Fund, he warned,

“The lack of availability of funding of this magnitude would have serious implications for the operation of Clare County Council.”

Speaking exclusively to The Clare Champion, Mr Coughlan warned that roads are the primary area of discretionary spending and that if cuts are to be made, the service in this area is likely to be first hit. It is the councillors ultimately, he explained, who will decide whether to alter the budget for this year or whether to accept cuts to local authority services.

“I have a report circulated to the council setting out the position that we’re in and setting out the fact that it’s going to be very difficult to find savings or reductions on services, which will respond to the decrease in income. As the councillors have adopted a budget, obviously we need to go back to the councillors if we’re going to re-examine the budget,” he outlined.

Mayor Pat Daly has called a special meeting of Clare County Council to discuss the implications of the circular issued by the Department of Environment, Community and Local Government outlining “an adjustment” for Clare County Council from the General Purpose Grant Allocation of the Local Government Fund for 2012. This meeting takes place on Friday.

“The bottom line really is that we have been told by the department that we have to achieve a balanced budget – that’s the bottom line. I will be telling councillors that on Friday. The councillors will consider that. I am pretty certain that the councillors don’t want to see reductions in public services but we’re really getting to the point where it’s extremely difficult to find any more savings.

“Therefore, the only option to get a balanced budget is to reduce levels of service. But I don’t want to do that, without the councillors at least considering that option,” he said.

If councillors decide to attempt to come in on budget, with the department holding back nearly €244,000 this quarter, roads will see a reduction in service.

“The problem with that, primarily, is that we have a workforce to whom we have contractual  obligations. Therefore, we have to pay them. So, we have to pay our employees for the rest of the year. If there’s going to be cutbacks in roads, it’s going to have to be in materials, which mean less roads get tarred, less potholes get filled. It means staff are engaged in less productive work. They won’t be standing idle but they may be engaged in less productive work, with less plant, less machinery, less materials, which is not a satisfactory situation,” the county manager outlined.

Less productive work, according to Mr Coughlan, would include “manually filling potholes, where possible, manually cleaning drains, that type of work, which is productive up to an extent but that’s not the level of productivity that we’ve become used to in recent years”.

The circular sent to the council last week from the Department states that the original allocation was €10,176,044 “less €974,524 reflecting an adjustment based on the level of compliance [with the Household Charge] achieved to date of 62%”.

A number of councillors have expressed concerns about altering allocations to local authorities in the middle of the fiscal year. Mr Coughlan concedes that ‘adjustment’ leads to a difficulty because the council had already budgeted for that money.

“Cash flow is a concern but we’ve tended to manage our cash flow in such a way that I think we’ll probably get over this for the moment. But, if this was to continue, we most certainly would have a problem,” he commented.

Mr Coughlan pointed out the council may have to use its overdraft facility and possibly seek an increase in its overdraft and this would require department approval.

“At the moment, I’m not sending out a red flag in relation to cash flow. I’m satisfied that we’re ok just at the moment. But obviously, we need to keep a very close eye on it,” he added.

If the council returns a deficit this year, it will have cash-flow problems. “If we do come in over budget, we are going to have cash-flow problems. We will have an increased overdraft, which means increased interest and bank charges and we’re building up a debt that somebody’s going to have to deal with at some stage. Obviously, my preference is not to go over budget but with the economic situation the way it is, it’s very difficult to achieve a balanced budget. Even before we got this notification from the department, of the adjustment, it was still going to be difficult to achieve a balanced budget,” Mr Coughlan said.

He believes the situation could be made easier. “It obviously would be better if people paid their household charge. Clearly, if the level of income that the council receives is less than that which was budgeted for, there will be reductions in service levels. The payment of the household charge in County Clare will influence the amount of funding which the council receives from Government in the Local Government Fund and the department has advised that the adjustment in the final quarter will take account of the financial position, including progress on securing an increased Household Charge yield.

“I think that the minister expects the fact that he’s reducing the Local Government Fund, that that, in itself, will entice people to pay their household charge. The minister has said that he’s going to review the situation in Quarter Four, on the basis of payments. So obviously, I would like to see an increase in the level of household charge payments, because we may be able to recoup the losses that we’re suffering at the moment,” he added.

That said, the council, according to the county manager, is hardly in a position to make people pay the charge.

“We don’t have a database that identifies who has paid and who hasn’t paid. So it’s very difficult for us to follow up on compliance when you don’t know who hasn’t paid. We’re waiting for the developments at national level in terms of whether or not we’re going to get that kind of information. If we get that information and if the department tell us to contact particular individuals for non-compliance, then we will do that, obviously,” he stated.

The number of staff employed by the council is currently in the region of 800, 20% down on the high of 1,000 in 2006.

Mr Coughlan asserted that Clare County Council doesn’t have the staff available “to knock on doors unless we were able to release staff from some other duties through redeployment, which would mean cutting back in other service areas”.