Local Property Tax Servicing €4.9 Billion of Local Authority Bank Debt

In response to parliamentary questions from the Minister for Environment, Reform Alliance TD Lucinda Creighton, the Minister revealed that the total amount of outstanding bank debt for all local authorities around the country is €4.9 billion. The total cumulative deficit of all local authorities is €74 million and over 40% of all local authority revenue goes towards payroll cost and ongoing pension obligations. These payroll costs in 2012 included payments of €55.6 million paid out in overtime. 
 
“The figures revealed to me by the Minister demonstrate the problems of funding in our 41 local authorities around the country. However, not all local authorities are in such bad financial health and people deserve to see a dividend in the communities where they are paying their property taxes and where their authorities are being better managed”
 
“Real local government reform requires incentives to be put in place for local authority’s to put their financial books in order and increase the amount of revenue that is available to service local communities. Empowering local authorities, through providing them with revenue directly collected from their locality, would lead to a much more accountable and functioning local democracy.”
 
“I asked the Taoiseach today if they would consider reversing their decision to postpone the 80% allocation of property tax revenue to the local authority region where it is collected, and enshrine in a legislative footing the 80% decision for 2014.” 
 
“The Council of Europe, the Thornhill Report and every credible international expert on local government reform recognise that without additional sources of direct local revenue raising powers by local authorities, there is no incentive to implement change. Many authorities think they can just keep trundling along knowing that the national government will just bail them out if they get into difficulty.”
 
“The only way to stop the government using local property tax as a piggy bank to either service the national debt, or the bank debt of badly run local authorities, is to introduce binding legislation ensuring that the revenue goes direct to the local area. This is the only way to make local authorities accountable to the people they serve.”
 

 
 
 
Parliamentary Question 

To ask the Minister for the Environment, Community and Local Government if he will detail in tabular form the total combined figure in euro amount for all local authorities here for deficits, outstanding bank debt, paid overtime, current revenues used to pay pensions; if he he will detail total amount of sick days accounted for in all local authorities here; if he will detail the cumulative payroll cost for 2012 for all local authorities in here as a percentage of their overall revenue; and if he will make a statement on the matter. 
– Lucinda Creighton. 
  
  
For WRITTEN answer on Tuesday, 5th November, 2013. 
  
Ref No: 45935/13 
  
  
REPLY 
  
Minister for the Environment, Community and Local Government (Mr. P. Hogan) 
  
  
Audited local auth ority financial data for 2012 are not yet available. The audit of the 2012 local authority Annual Financial Statements is scheduled for completion by end March 2014.    The 2011 Annual Financial Statements are available on my Department’s website at www.environ.ie/en/LGFinance/Publications 

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At the 31 December 2011, 41 local authorities recorded a cumulative revenue account deficit amounting to some €74 million. 
  
The most recent published figures for sick days are set out in the report Service Indicators in Local Authorities 2011 which was published by the Local Government Management Agency in April 2013, a copy of which is in the Oireachtas Library.   Based on figures reported by local authorities, the total number of days lost in the sector to absenteeism amounted to 350,224 in 2011 (or 5.09% of working days). 
  
Based on figures reported to my Department, the total paid overtime in 2012 amounted to €55,608,820 (or 4.11% of Gross Cash Remuneration). 
  
The further information requested, sourced from the 2011 Annual Financial Statements, is set out in the following table. 
  
 
Loans payable €4,886,056,538 
Pensions (incl Gratuities) €278,344,243 
Total payroll expenses €1,785,020,113 
  
Total revenue income €4,991,590,075 
  
Payroll expenses % of revenue income 36%