We need to move away from centralisation

Political reform must remain part of any new Programme for Government if our democracy is to be kept transparent and healthy, writes Theresa Reidy.

IRELAND is one of the most centralised states in Europe. Power in Irish politics is concentrated in the hands of central government.

Despite some recent Dáil reforms, the Government continues to control much of the political agenda and instruments of transparency and accountability remain under-developed and under-utilised.

Political reform must remain part of any new programme for Government if our democracy is to be kept transparent and healthy.

In contrast to almost all other European states, there has never been a meaningful tier of regional government in Ireland and local government remains woefully weak.

Some research suggests that reforms enacted during the economic crisis may have exaggerated the existing power imbalance. Yet, the extent of the political centralisation in the State is rarely acknowledged or discussed as a serious political problem. And the consequences of political centralisation receive little public treatment.

The preference for centralisation and its consequences are most obvious at local government level. There have been waves of reforms in the last three decades.

Local government has been stripped of responsibility for the delivery of services in health, education and infrastructure. In many cases, these functions were centralised at national level with the creation of the HSE and Irish Water — just two examples of a striking tendency to presume that centralisation leads to more effective service delivery.

New roles in social and economic development have been allocated, especially in the 2014 reforms when demands to give local government meaningful functions in the development of their local areas were finally delivered.

Overall, the cumulative effect of many reform plans is mixed with a clear indication that more can be done to achieve the level of local engagement attained in may European countries.

The extent of the centralisation of power in Ireland is not discussed much in public debates but it is a well-established fact and has been documented in several reports.

The Devlin Group (1970), the Barrington Report (1991) and more recently, the Putting People First (2012) policy programme of the last Fine Gael and Labour coalition have all noted the significant dependence of local government on central government and all have argued for substantial devolution of powers to local government.

However, devolution efforts are often disconnected and some research suggests there is deep hostility to devolution stemming from a distrust of local councils and a centralising mentality.

Evidence of the power imbalance in Irish governance is very obvious in the financial data for the State. Eurostat collates data on the proportion of taxes raised and the amount of public spending by each level of government each year. Ireland sits in second last position on both counts.

Only Malta raises less tax at local level than Ireland. More than 95% of tax revenues are raised by central government in Ireland. The same pattern exists for public spending.

Some 93% of public spending in Ireland is disbursed by central government with local government responsible for just 7%. If the old maxim that “money is power” holds, we can see that central government is where the power lies in Ireland.

The figure also demonstrates quite clearly how atypical Ireland is relative to other small EU states like Finland, Austria and Denmark.

Centralisation of power and state finances has consequences. Management of the public finances in Ireland is more complex because of the extent of the state’s fiscal centralisation.

The business cycle has exaggerated effects on the overall budget. The annual budget is the most important financial day of the year because it makes the most important financial decisions.

This is not the case in most other countries because financial decision making is decentralised across layers of government. Commonly across EU states, local and regional taxes are levied on individuals, businesses and property.

Property tax is an especially important source of revenue for local authorities in most states and it contributes to a degree a stability in sub-national revenues which has long been absent in Ireland.

The introduction of the property tax in Ireland is a positive step but the minister for finance retains important controls over its incidence. This limits its potential to develop as both an important autonomous revenue source for local government but also as a revenue source over which local government, and more specifically local councillors, are responsible and accountable.

The consequences of centralisation for regional development are also clear. Urban growth in the greater Dublin area has led to enormous congestion, an acute housing shortage and significant quality of life impacts for citizens living in these areas but also in the communities which are dealing with rural depopulation and community decline.

The extent to which public policy was leading to imbalanced development became a subject of some discussion during the Celtic Tiger period. It also featured in a different guise at the general election in 2016 when concerns that the economic recovery was concentrated in the wider Dublin area was identified as a factor in the collapse in the vote for Fine Gael at that election.

For decades, policy reports emphasised the need for local authorities to be given enhanced roles in economic and social development so that they might lead development at the level that is closest to the citizen. Some progress in this direction has been made but much damage has already been done and it remains to be seen if more balanced development can be achieved.

- Theresa Reidy is a political scientist at University College Cork. This op-ed is the subject of a chapter in Social Justice Ireland’s book, From Here to Where? published this week as a part of its annual policy conference.

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