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Dáil Question on local authorities contributions upon dissolution – 9th July 2013

Dáil Question No: 389

To ask the Minister for the Environment, Community and Local Government bearing in mind the conditions set out in Circular 03/2009, Control and Monitoring of Local Authorities Contribution to the General Government Balance, if he will explain what will happen to monies which had been put aside by Town Councils for a specific capital project within the town but which had not commenced once the Councils have been abolished; and if he will make a statement on the matter. – Anthony Lawlor.

For WRITTEN answer on Tuesday, 9th July, 2013.
Ref No: 33315/13

Answered by Minister for the Environment, Community and Local Government Phil Hogan

REPLY

In February 2009, my Department set out details of the financial requirements for local authorities relating to their overall management of capital and current accounts. These requirements flow directly from the requirement for Government finances as a whole to be managed in accordance with the Stability and Growth Pact

It is a matter for every local authority to determine its own spending priorities in the context of the annual budgetary process, established under the Maastricht Treaty, and the associated limitation on budget deficits.

The local government sector must not impact negatively on the General Government Balance (GGB) in any one year. The downturn in the economy and substantial pressures on Government funding generally require a sharp focus in all sectors, including local government, to ensure effective control and management of public finances.

In order to stay within the overall GGB limit, it is necessary for local authorities to maintain both their current and capital accounts broadly in balance. The only restriction on local authorities is that, in aggregate, capital income equals capital expenditure in the year. Balance is only required at an overall level and this allows considerable scope for authorities to draw on their existing capital reserves as an element of their overall investment programme. The precise manner in which capital and current accounts are managed in order to achieve the overall balance necessary is a matter for individual local authorities. , having regard to both locally identified needs and available resources within the GGB limits as set out.

The Action Programme for Effective Local Government – Putting People First sets out Government decisions for a range of local government reform measures, including the decision to replace town councils with a new comprehensive model of municipal governance to strengthen local government within counties and address weaknesses and anomalies in the current system. Definitive details, arrangements and procedures in relation to the financial relations

hips between district and county levels , will be developed in the context of the new local government funding arrangements generally, implementatio n of the new sub-county system and preparation of the legislation in re lation to the reform programme.

ENDS