But existing local development companies (LDCs) warn that he will annihilate a successful community-led model for investing public funds, one of the best in Europe.
With nearly 2,000 employees in about 50 existing LDCs, which supported more than 1,644 enterprises in the past year, and which work with thousands of people in community schemes, the re-organisation which Mr Hogan has enacted will have far-reaching consequences — especially in rural Ireland.
Referring in the Dáil to a strong requirement for greater oversight, Mr Hogan said irregularities have been discovered in the Meitheal Forbartha na Gaeltachta and Mayo North East LEADER LDCs.
And referring to limitations in the current local development model, he said there can be a considerable administrative burden.
“Some companies spend 15% of the total funding on administration and others spend 30%.”
“There is a potential for duplication and overlap because of the complexity of the local development landscape, the many different funding and reporting arrangements, and the demands and hidden costs associated with the requirement on various stakeholders to participate in multiple boards and structures at local level.”
He said LDCs will be key players, and a key partner on socio-economic committees to be set up by local authorities to oversee development. “They will also continue to implement the programmes on the ground using the bottom-up approach.”
But he warned: “None of us should expect autonomy. Our citizens want to know where their hard-earned money goes, and they want a say in how it is spent.”
“The document on local government which I published some time ago will position local government with the overall responsibility.
“The powers we envisage giving local authorities and the level of accountability we expect of them means we will not see any dead hand flourishing in the local government structure of the future.
“I want to see the same happening on the community side.”
“Our approach has the support of the European Commission.”
Mr Hogan said he was satisfied that it represents a balanced and sensible way forward, and called for co-operation between the key stakeholders, including the Irish Local Development Network.
The re-organisation is part of the Government’s Putting People First range of reforms to place local government at the heart of local economic, social and community development.