Last Thursday I announced details of the General Purpose grants from the Local Government Fund. Since then there has been some comment that has caused some confusion and the following should clarify the position.
As stated previously it was not possible in 2014, to introduce a local retention rate of the Local Property Tax, due to the implications of the establishment and the transfer of water functions from the local government sector to Irish Water. However, the commitment that all of the proceeds of the LPT collected in 2014 would be allocated to local authorities will be met.
In examining the General Purpose grant allocations we must look at the implications of the transfer to IW. Therefore it is not appropriate to compare the General Purpose Grant (GPG) allocations of 2013 with 2014. It is misleading to do so, as it takes no account of the overall changes in local authority funding in 2014, particularly the additional funding line being introduced in respect of the establishment of Irish Water.
Most water service responsibilities will be transferred from the local government sector to Irish Water in 2014. Local authorities will no longer be responsible for directly funding most water services, costs which they would previously have funded from within their GPGs.
The €275m in GPGs allocated on Thursday must be considered in this context.
The breakdown of the €730m of gross water costs that will transition to Irish Water next year is as follows:
- some €244m will be paid back to local authorities for the provision of water services under the terms of the Service Level Agreements.
- Irish Water expect to pay commercial rates of about €42m. to local authorities on the water infrastructure assets that will transfer to them from January 2014.
- the remaining €444m of water related costs arising, that local authorities would otherwise have had to meet from their own resources, will be funded centrally by Irish Water.
Between the GPG allocations (of 275m), the SLA figure payable by Irish Water to local authorities (of 244m) and the commercial water rates payable by Irish Water next year (of 42m), local authorities will receive a total of €561m in 2014. This will be part funded by the LPT proceeds of about €550m in 2014.
It should be noted that variations in water costs removed from local authorities can arise because of the nature and size of water infrastructure within each local authority. Changes within individual local authorities can also arise from year to year (e.g. new water services infrastructure coming on stream giving rise to additional costs, or reductions arising because of loans associated with previously provided infrastructure being paid off.)
It should also be noted that while the NPPR charge will no longer apply in 2014, arrears outstanding will still be collectible and all arrears collected by individual local authorities in 2014 will be retained by those authorities.
When all of the above factors are taken into account, the overall financial position for local authorities in 2014 will be much more favourable compared to 2013, and they will have an additional €98m extra available to them next year.
Ends
15/12/2013
Local Authority
2013
2014
Change 2014 on 2013
(€)
Income (GPG, NPPR, Non Domestic Water Income)
(€)
Total GPG & Water Costs transitioning to Irish Water
(€)
Dublin LAs
191,572,160
211,687,800
20,115,640
Limerick LAs
39,886,691
45,851,570
5,964,879
Waterford LAs
32,027,808
37,499,509
5,471,701
Tipperary LAs
45,930,862
50,179,053
4,248,191
Carlow LAs
11,735,550
12,684,716
949,166
Cavan LAs
17,857,113
18,523,722
666,609
Clare LAs
21,644,289
22,977,245
1,332,956
Cork County LAs
58,351,330
72,577,895
14,226,565
Donegal LAs
47,161,343
53,849,592
6,688,249
Galway County LAs
34,482,978
35,654,976
1,171,998
Kerry LAs
32,333,923
30,969,470
-1,364,453
Kildare LAs
35,057,748
37,630,192
2,572,444
Kilkenny LAs
20,288,147
22,401,866
2,113,719
Laois LAs
15,514,989
17,008,304
1,493,315
Leitrim LAs
13,836,743
15,494,473
1,657,730
Longford LAs
15,242,542
17,810,564
2,568,022
Louth LAs
22,519,375
26,476,294
3,956,919
Mayo LAs
37,438,669
42,366,023
4,927,354
Meath LAs
28,704,343
28,786,831
82,488
Monaghan
16,844,638
18,993,068
2,148,430
Offaly
16,897,712
17,149,761
252,049
Roscommon LAs
19,705,208
19,774,405
69,197
Sligo LAs
19,597,848
22,012,500
2,414,652
Westmeath LAs
20,710,004
22,936,486
2,226,482
Wexford LAs
27,140,103
31,280,168
4,140,065
Wicklow LAs
25,525,288
27,357,856
1,832,568
Cork City
27,058,944
31,756,596
4,697,652
Galway City
12,159,549
13,226,167
1,066,618
907,225,897
1,004,917,103
97,691,206