Group tasked with examining Cork City's boundary compensation crisis no longer exists 

Renewed calls likely for Darragh O’Brien to either increase council funding or directly intervene

Local Government Minister Darragh O’Brien had said that the implementation oversight committee
should examine Cork City’s funding challenge, but his department has confirmed that the committee no longer exists. Picture: Brian Lawless/PA

The group that Local Government Minister Darragh O’Brien says should examine Cork City’s potentially crippling €22m index-linked city boundary compensation crisis no longer exists, his department has confirmed.

The revelation is likely to lead to renewed calls at April’s meeting of Cork City Council on Monday night for Mr O’Brien to either increase council funding or directly intervene to resolve the issue.

The minister was first criticised last November when he refused to sanction additional local property tax (LPT) funding to the city to help it to cope with the surge in its compensation payments to Cork County Council arising out of soaring inflation.

He described the funding challenge, which is unique to Cork City, as an “exceptional issue” which should be dealt with by the implementation oversight committee — a special three-person group which was established to oversee the 2019 city boundary extension and to deal with any disputes which may arise between the two local authorities.

However, almost four years on, the operational and legal status of the committee was unclear.

In February, councillors passed a motion proposed by Fine Gael councillor Shane O’Callaghan which asked the minister to identify the implementation oversight committee members, the date of their appointments, and the date of their last formal meeting, and to set out the process through which he thinks the council should engage with them.

The formal response to that motion shows that the minister passed the issue on to junior minister Kieran O’Donnell to deal with.

'No membership'

In his response to council, Mr O'Donnell confirmed that the implementation oversight committee “has not been active" since the formal boundary extension was concluded "and currently has no membership”.

However, he did say that members could be appointed by the minister, if required.

He repeated the minister's defence of the allocation of baseline LPT funding to Cork City Council which took no account of the increased compensation payments it faces arising out of the boundary extension.

Under the terms of the boundary extension, the city has to pay an annual index-linked contribution of around €13.5m to the county council for a minimum of 10 years, with the first payment made in 2020.

At the time of the boundary extension negotiations, the city argued, unsuccessfully, against index-linking the payments.

The Irish Examiner first reported last November how soaring inflation has seen the annual compensation payment surge.

City council chief executive Ann Doherty told councillors that the 2024 payment will top €15.4m and that the index-linking element alone could add €22m to the overall cost of the compensation payments over a decade.

“This is not a sustainable cost for Cork City Council,” she warned.

The council has told Mr O'Brien that it is difficult to comprehend how it got an increase in its LPT baseline funding of just €1.5m — the minimum increase available to all local authorities — while the county got an extra €10m, given that the city is compensating the county to the tune of around €15m a year.