Back-to-front funding
The outcome in terms of cutbacks to local services as a result of household charge non-compliance is not fair
0N Twitter, a student asked me for my views on what he called the “Clare County Council debacle”. The constriction of 140 characters did not allow me to satisfactorily express an opinion but I will do so here.
Many commentators have claimed, with some justification, that Ireland does not have a system of local government; rather, it has a system of local administration under strict central control. We have never had a proper informed debate about the role of local government and what we expect from our local authorities.
Dr Mark Callanan of the Institute of Public Administration has written that local government has four key roles: (1) an instrument of local democracy; (2) a provider of services; (3) an agent of central government; and (4) a local regulator.
The administration by local authorities of the higher education grants scheme comes under the third category. While the adoption of a higher education grant scheme is a reserved function for each local authority, the scheme is a national one.
Clare County Council and South Tipperary County Council took the questionable step of linking third-level grant applications with proof of payment of the household charge. Both have been forced to reverse their decisions. Clare County Council had earlier defended its actions, stating that the assessing and processing of grant applications comes at a cost to them and their revenues are down due to a reduction in the local government fund and the failure of some citizens to pay the household charge. Taoiseach Enda Kenny, along with senior ministers such as Ruairi Quinn, Phil Hogan, and Richard Bruton, described the approach of the local councils in Clare and Tipperary as reasonable.
They argued that it was the law of the land to pay the household charge. However, the Taoiseach clarified the position yesterday, saying the household charge was separate to college grant applications and could not be used against an applicant.
While I have sympathy with cash-strapped local councils, I think Clare County Council chose to target the wrong group. As the president of the Union of Students in Ireland, John Logue, said, going along with the councils’ stance would punish students for the actions of their parents.
The purpose of raising taxes locally is to provide local services, but the waters have been well and truly muddied with the household charge. It is not generating extra income for local authorities; rather it is being offset by cuts in central government funding through the local government fund.
The outcome in terms of cutbacks to local services as a result of non-compliance is not fair. I have paid my household charge, yet suffer from reductions in local services in the same way as someone who did not pay. If the local council is forced to cut services and cannot buy new books for the library, my children lose out even though their parents have paid the local tax.
All of these bring us back to two core issues, the role of local government and how we fund our local councils. The reform debate — such as it is — has led to various calls for institutional reform, but the media and political classes have placed little emphasis on reform at the local level, the political arena closest to citizens and perceived to be the most relevant and responsive to them.
Perhaps this is not surprising, as the importance of local government has been consistently undervalued in Ireland. The foundations for any reform programme which sets out to increase accountability, improve public services and enhance community participation must begin at the local level.
If we reconstruct a model of local government based on dispersing power away from the centre, then the quality of government and the health of democracy will both improve. Central government and the Oireachtas will also be enhanced, a point frequently overlooked in the political reform debate. It is popular in Ireland at the moment to search for simplistic, short-term solutions based on a “slash and burn” reductionist model. The dominant perspective coming from central government favours efficiency over democracy but, arguably, we have neither.
Unlike many European countries, Irish local authorities do not have complete responsibility for substantial aspects of health, education, policing, or welfare services. Nonetheless, in recent years, Irish local authorities have seen their range of service responsibilities expand.
Their role now includes provision of the local democratic framework, promotion of sustainable development, support for social inclusion interventions and facilitation of public and private investment. As a result of these changes, Irish local authorities now compare favourably with European counterparts.
In his research, Dr Seán Riordáin stresses that one of the essential pillars for a successful national economy — as demonstrated by the Finns, the Danes, and the Dutch — is that the local authority system is a central feature of economic, social and cultural development. Democratic input is a cornerstone of such systems, with citizens and civil society playing active roles and where holding elected office or the mayoralty is an aspiration for most citizens.
As Dr Callanan argues, there is a striking dearth of evidence or data in support of proposals that a smaller number of local authorities would yield improvements, savings and efficiencies. Given the labour-intensive nature of most local government services, the economic benefits of local authority mergers from economies of scale would not be significant; in some cases there could possibly be additional ongoing costs due to diseconomies of scale.
Inevitably, all of these issues come back to the question of how we finance local government. Any new local taxation regime must provide a clear link between local spending and local revenue to be effective. During a cold spell of weather, people expect their roads (even the minor ones) to be treated. People expect effective service provision in terms of waste management, public libraries, social housing, public parks, playgrounds, water supply, and support for local festivals — but who pays?
Local authorities across Ireland are living with significant financial pressures. In the long term, funding for capital projects is expected to be reduced by one third.
The EU/IMF agreement also envisages further reductions in exchequer funding in the years ahead. Something has to give because the sources of funding for local government have dried up — the level of irrecoverable rates has doubled, commercial rates collection levels have fallen and so too have water collection rates. How can the system absorb such reductions in funding while, broadly speaking, continuing to provide the same level and range of services? It is simply not possible.
Most other countries manage by operating a system of local taxation. If local people want additional services, these have to be funded. Voters are presented with choices at local election time, between those who promise additional or new services (which have to be paid for), and those who promise to keep local taxes low (with the hard choices about reducing services that necessarily follow).
In Oct 2003, I was invited to speak at a Fine Gael regional conference in Cork, at which the current Taoiseach also spoke. The title of the session was: Is local government in need of reform?
I concluded my speech as follows: “The answer is patently clear. Yes we need reform. Yes we need new thinking, fresh ideas and new insights. Yes we need respect for local government. Yes we need a proper system of finance. Yes we need an effective representative association. Yes we need gender balance in our council chambers. Yes we need genuine local autonomy. Yes we need active community participation. More than anything else, however, what is badly needed is strong leadership and determined political will.”
In 2012, the conclusions remain the same.
* Dr Aodh Quinlivan is a lecturer in politics in the department of government at University College Cork
CONNECT WITH US TODAY
Be the first to know the latest news and updates
