Councils face funding crisis, claim TDs

LOCAL authorities are facing a major cash crisis next year, with new funding not enough to maintain services, Opposition parties claimed last night.

Environment Minister Martin Cullen yesterday announced a Local Government Fund of €626.3 million, an increase of 6.5%. The fund helps local authorities balance their budgets each year.

This block grant generally makes up about a fifth of the overall local authority budgets and the rest must be raised through commercial rates and local service charges.

Mr Cullen said the Government could not give major increases like other years but it still wanted to give local authorities adequate money to manage their affairs.

“Local authorities must ensure that in framing their budgets for 2003 they are guided by sound and responsible decision-making,” Mr Cullen added.

But both Labour and Fine Gael hit out at the increase and said it was not enough to meet the huge salary increases facing local authorities.

Labour’s Environment spokesman Eamon Gilmore said local authorities will be forced to cut their services because the Minister has not provided enough money to meet the major pay rises due under the benchmarking awards and the Programme for Prosperity and Fairness (PPF).

“This will leave a large hole in the budgets of most local authorities and many will face a severe financial crisis as they attempt to adopt estimates over the next few weeks,” Mr Gilmore said.

The net result will be cutbacks in essential local services, such as road maintenance, public parks and libraries and will lead to new increases in service charges, Mr Gilmore said.

Fine Gael’s Environment spokesman Bernard Allen said the 6.5% increase will actually amount to a cutback when inflation and the huge pay bills are taken into consideration.

Benchmarking, PPF increases and the recruitment of thousands of employees under the Better Local Government programme were all sanctioned by the central government and it should finance them, Mr Allen said.

This is in fact the third “Budget” the Government has introduced in the past week, he added.

“First there was the real Budget, then the second budget with the motor tax rise and now this fund which will force local authorities to dramatically increase their commercial rates and service charges,” Mr Allen said.