Developers owe €800m to local authorities

DEVELOPERS owed €800 million to cash-strapped local authorities in overdue levies at the end of 2008 – a jump of €668m on the amount due at the height of the boom.

The shortfall was compounded by separate accounts which show councils’ actual revenue from these levies in 2008 fell by €261m – from €631m.

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

Last April it believed €500m was the amount due to the country’s councils.

Secretary general of the department Geraldine Tallon wrote to the Dáil’s Public Accounts Committee last month to alert it to the new figure.

“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,” she said. This did not include a provision for bad debts.

Meanwhile, the amount of levies paid by developers but waiting to be spent by councils fell by €1.2bn to €959m at the end of 2008.

Before Christmas, Environment Minister John Gormley said his department will provide €870m to councils next year to plug the gap between income and expenditure. This is a drop of €35m on 2009, but a fresh €200m will be raised by the levy on second homes.

Chairman of the Dáil Public Accounts Committee (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.