Chamber of Commerce Ireland Warns Minister Cullen of Local Government Act Breaches

Joint CCI and IHF Delegation Discuss Local Authority Funding with Minister

The Chambers of Commerce of Ireland (CCI) will today (11/11/03) warn the Minister for the Environment and Local Government that the Government will be breaking the law if in Thursday's estimates it fails to adequately fund local authority benchmarking and other massive costs it has heaped on local authorities.

A joint delegation from CCI and the Irish Hotel's Federation (IHF) is to meet with Minister Martin Cullen T.D. today to discuss issue of local authority funding.

Speaking in advance of the meeting, President of CCI Mark Staunton said, "under Section 4 of the Local Government Act 1998, the Minister is required to 'have regard.....to any changes in the functions of local authorities or in the amounts of their expenses in performing those functions that have occurred.'"

"CCI would argue that payments made in respect of claims for elected members' salaries represented a new function imposed in 2002 and that the payment of benchmarking was a cost related to performing existing functions that arose beyond the control of local authorities. These should therefore be subject to the provisions of the act," he said.

"The Government wriggled out of this responsibility using a technicality last year. We believe however, that if in his estimates for 2004 Minister McCreevy fails to include funding to cover these two costs, which we calculate will amount to at least EUR80m the Government will be clearly breaking the law," Staunton concluded.

The delegation will also be raising the issue of increasing commercial rates and other local authority charges with the Minister. Chief Executive of the IHF John Power will tell Minister Cullen, "because the rates base is so narrow and to a large extent based on the size of the buildings, registered hotels and guesthouses bear a disproportionate amount of the cost of funding local authorities. This creates major problems in our efforts to maintain competitiveness."

For further information contact: Ciara O'Mahony, Press and Communications Officer
Ph (w) 01 661 28 88 or (M) 086 1731537

Notes:
Local Government Act 1998 - Section 4

Section 4

(1) In this section- ''consumer price index number'' means the All Items Consumer Price Index Number compiled by the Central Statistics Office and references to the consumer price index number relevant to any financial year are references to the consumer price index number at such date in that year as is determined by the Minister with the consent of the Minister for Finance; ''current year'' means the financial year in which the particular payment into the Fund, under subsection (3), falls to be made.

(2) The Minister shall, out of moneys provided by the Oireachtas, pay into the Fund in the financial year, 1999, £270,000,000.

(3) The Minister shall, out of moneys provided by the Oireachtas, pay into the Fund in the financial year, 2000, and each subsequent financial year thereafter such an amount as he or she determines, with the consent of the Minister for Finance, in relation to the year concerned and, in making any such determination, the Minister shall have regard, in particular, to each of the matters specified in subsection (4): Provided that the amount so determined shall in no case be less than an amount equal to the amount specified in subsection (2) multiplied by the figure specified in subsection (5).

(4) The matters mentioned in subsection (3) are any changes in the functions of local authorities or in the amounts of their expenses in performing those functions that may have occurred-

(a) in case the current year is the financial year, 2000, in the financial years, 1998 and 1999,

(b) in any other case, in the financial year preceding the current year, or that are likely to occur in the current year.

(5) The figure mentioned in the proviso to subsection (3) is the quotient, rounded up to 3 decimal places, obtained by dividing the consumer price index number relevant to the financial year preceding the current year by the consumer price index number relevant to the financial year, 1998.

(6) Any moneys that the Minister receives, in each financial year, other than moneys from the Fund or moneys provided by the Oireachtas, in connection with the collection of motor vehicle tax, including in connection with the provision of information from records established and maintained under section 60 of the Finance Act, 1993 (as amended by section 86 of the Finance Act, 1994) shall be paid into the Fund by the Minister.