The Minister for the Environment, Community and Local Government, Mr. Phil Hogan, T.D., today (12 December, 2013) announced General Purpose Grants (GPGs) to local authorities of €275Mn for 2014.
When taken with the water costs of some €730Mn that will be transferred from the local government sector to Irish Water next year, this represents a funding boost of approximately €98Mn to the sector next year when compared to the corresponding funding and costs for 2013. These allocations demonstrate that the local government reforms are working for services and for citizens.
Local authority financing will radically change in 2014: Irish Water will assume responsibility for the delivery, and funding of, water services; the Local Property Tax will operate on a full year basis; and the Non Principal Private Residence Charge will be discontinued.
Funding of Water Services in 2014
The establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing from 2014. Irish Water will fund local authorities to deliver water services through Service Level Agreements (SLAs). The operational costs (exclusive of capital investment) of providing water services, domestic and commercial, next year is estimated at just under €730Mn.
GPG allocations to the local government sector from the Local Government Fund in 2013 amounted to €640Mn, and along with commercial water rates and the Non Principal Private Residence charge, the local government sector had gross income from these sources totalling some €907Mn this year.
The GPG allocations to the local government sector for 2014 take into account the new SLAs with Irish Water, and their combined impact with the transition of water costs to Irish Water will result in gross revenue to the sector of over €1 Billion next year. This represents an increase of about €98Mn or 11% compared to 2013.
Announcing the GPG allocations, the Minister stressed his continued commitment to strong central government support for the local government sector and the importance of the services which local authorities deliver.
“Notwithstanding all of the changes in the sector, I have been clear in my determination to ensure that through the general purpose funding I’m announcing today and the funding being made available through Irish Water, that support for local authorities from these elements would be maintained at 2013 levels. On foot of today’s allocations and the nearly €730Mn in water costs that Irish Water will be covering in 2014, the local government sector will in fact benefit to the tune of an additional €98m or 11% next year. The fact that the full Local Property Tax yield, supplemented by Motor Tax receipts, is being dedicated to funding local authority service delivery in 2014 is contributing to this positive outcome”, stated the Minister. “These changes will translate into better services for the citizen in their local communities. The local government sector will continue to face many challenges in 2014; I am pleased that the funding I am providing today will assist the sector in meeting them.”