Five councils are in serious financial difficulty, report says

Five local authorities – Donegal, Mayo, Sligo, Waterford and Wexford – were grappling with a “significant deterioration” in their finances at the end of last year, according to a report from an independent local government watchdog.

The National Oversight and Audit Commission report into local authority performance found Sligo County Council’s revenue deficit more than doubled from €11.4 million in 2010 to almost €27 million in 2014.

The auditors said the Sligo local authority was the most “adversely affected” in deficit terms over the last five years.

Donegal County Council saw its annual revenue deficit rise from €11.6 to €14.9 million in the period; Mayo’s annual deficit rose from €1.9 million to €5.05 million; and Waterford city and county’s deficit went from €7.57 million to €8.56 million.

In all, 17 of the State’s 31 local authorities were in the red at the end of 2014.

‘Cause of concern’

In a commentary on the figures, the audit commission said “while some of these [17]authorities have made progress on arresting the worsening situation, a small number continue to be a cause of concern”.

In contrast to the financial problems of some, the auditors note Dublin City Council’s surplus increased by 71 per cent from 2013 to 2014, leaving the council with €28.35 million in the bank.

Fingal, South Dublin and Cork County also showed a surplus of more than €10 million at the end of 2014.

Westmeath moved from a deficit of about €1 million per year to a small surplus in 2014 and Clare, Kilkenny and Longford all significantly reduced their deficits in 2014.

According to the audit commission’s report, collection of rates, rents and annuities – although an important element in the financing of local government – were mixed over the period.

Collection levels for rates in 2014 varied from a high of 92 per cent in Fingal to lows of 56 per cent in Donegal and Louth.

The commission said it is carrying out a review of rate collection performance to better understand the contributory factors.

Collection rate

Sligo moved from collecting 79 per cent of commercial rates in 2010 to 67 per cent in 2014.

Similarly Mayo’s collection rate fell from 83 per cent to 75 per cent; Donegal went from 61 per cent to 56 per cent; Waterford City and County went from 78 to 72 and Wexford dropped from 72 to 71 per cent.

In terms of rent and annuities, the highest collections were in Laois and Monaghan at 95 per cent, and the lowest in South Dublin at 73 per cent.

Overall, housing loan repayment collection levels show a deterioration from 80 per cent in 2010 to 65 per cent in 2014.

The highest was Fingal at 98 per cent and the lowest were Kildare and Sligo at 42 and 46 per cent respectively.

The audit commission said it is undertaking a more in-depth analysis of the underlying issues associated with revenue account deficits.

The National Oversight and Audit Commission was established in 2014 to provide independent scrutiny of local government performance.

Its mission is to oversee the local government sector by reviewing the financial and operational performance of bodies.