€7m from household levy used to fund agency

More than €7m in household charges paid by property owners is being used to finance the agency collecting the levy, despite communities facing cuts to essential services and the closure of local facilities.

It has been confirmed that the millions of euro — equating to charges paid on 72,000 properties — are being deducted from charges to pay for staff, the household charge database, and administration costs.

The money needed to run the Local Government Management Agency (LGMA) has increased and the bill “expanded” since it was set up this year, the agency told the Irish Examiner. However, the mounting bills for the agency come as local authorities are being forced to pull millions in community, arts, and sports grants, as well as close facilities such as parks and libraries due to cuts in government funding.

Galway County Council has written to recipients of support and household gra-nts for those with disabilities telling them this year’s payments are being suspended. Cork County Council plans to defer spending €250,000 on community grants. Roscommon is suspending some services, including some for older people, while recycling sites will be closed and mobile libraries will no longer operate.

LGMA chief executive Paul McSweeney confirmed costs had escalated, but said the money deducted from the household charge would go towards establishing a database of property owners for the Revenue Commissioners, who take over the collection next year.

“The intention was to keep administrative costs to a minimum and that was the instruction. As time went on, it became apparent that if you want to advertise, it ain’t free and you have to spend money. You have to build an application [the database] and that’s going to cost money too.”

It has cost €4m to run the agency since it begin operating last year, but a budget of €7.2m has been set aside for it to complete its work.

“We’d have a planned budget of maybe up to €6m for this. We haven’t spent anything like that yet. We had a planning figure, but it expanded as requirements did. The agency is completely self financing.

“It costs you money to collect money. We had to build this business and it had to be funded in some way... the bulk of it [the costs] is manpower.”

Figures provided to the Irish Examiner show the agency has been granted a budget of €2.6m for capital costs and €4.6m for ongoing costs. Capital costs cover software licences, hardware, network communications, security and testing, while the bulk of running costs are for staff, at €3.4m. The balance are bank charges and ‘hosting charges’ for infrastructure, said the agency.

As the household charge deadline approached at the end of March, some 200 staff worked on double shifts. Since then, 71 have been working full-time.

As of last month, more than 1m households had registered for the charge.

However, at least another 600,000 properties remain to be registered.

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