‘No cost savings’ in merging LDCs

There will be no financial gain from absorbing local development functions into local authorities, according to the findings of consultants who examined staff and administration costs in local development companies (LDCs), local authorities and the civil service.

The LDCs asked consultants Smith Everett & Associates (SEA) to compare their staff costs with similar positions in local authorities and the civil service, and overall administration costs as a percentage of overall income.

The consultants’ findings are the latest development in the opposition of LDCs to the re-organisation of local government led by Environment Minister Phil Hogan.

In the most radical reform in 100 years, Mr Hogan wants to reduce the number of local authorities from 114 to 31, and the number of elected members from 1,627 to 949.

Strategic policy committees would prepare local action plans for economic activity and job creation, and would control local enterprise offices (which replace County Enterprise Boards).

Local councils are to be given a greater say in local community development commit-tees which will co-ordinate spending of millions of euro each year on local and community development initiatives — work previously carried out by LDCs, which are set to lose certain functions in the reform.They have hit back saying the latest staff and administration costs findings question claims of potential for savings in greater alignment between local government and local development. Salary plus pension costs for five key positions in 40 LDCs were lower in each case than comparable positions in local authorities and the civil service.

Costs were €93,195 for LDC CEOs; €112,595 for local authority directors of services; €107,108 for civil service principal officers; €64,941 for LDC co-ordinators; €88,529 for local authority senior exec officers; and €87,015 for civil service assistant principal officers.

Administration costs in LDCs were “reasonable” in comparison with similar notfor-profit organisations and a number of private sector industries, and significantly lower than the average for 19 City and County Enterprise Boards. On average, LDCs have provided the Exchequer with a net gain of about €7.8 million each during the past three years, according to the analysis.


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