Developers owe €800m to local authorities

DEVELOPERS owed €800 million to cash-strapped local authorities in overdue levies at the end of 2008.

The Department of the Environment has said provisional accounts from local authorities show the developers’ debts were 60% higher than early-year estimates.

Last April the department believed €500m was the amount due to the country’s councils. However, the final accounts revealed the situation was €300m worse than originally thought.

Secretary general of the Department of the Environment Geraldine Tallon wrote to the Dáil’s Public Accounts Committee last month to tell it the figure may even be higher when all accounts are settled.

“The Department has reviewed the provisional financial information to hand from local authorities on the level of development contributions owed to them at the end of 2008.

“This indicates a figure in excess of €800m. However, the gross figure does not include any provision for bad or doubtful debts and may well include contributions in respect of developments not yet commenced whose payments are not yet due,” she said.

Ms Tallon said 2008 was the first year councils were obliged specifically to account for the building levies which were due in their annual report.

Figures revealed by individual local authorities suggest the shortfall is likely to grow this year.

Last month, Westmeath County Council said it was owed €4.7m.

Roscommon County Council was due €17m.

On the last day the Dáil sat before Christmas, Minister John Gormley told the Dáil his department will provide €870m to councils next year to plug the gap between their income and expenditure.

This is a drop of €35m on 2009, but a fresh €200m will be raised through the levy on second homes.

Chairman of the Dáil PAC Bernard Allen said it was vital that councils pursued developers aggressively, otherwise local services would suffer.

“These are councils that, since the weather got bad, have not been able to properly salt or grit our roads.

“There seems to be a reluctance on behalf of councils to pursue this vigorously and it is something we (the PAC) will be looking at in the New Year,” he said.