Government grants to local authorities in Dublin and better-off areas, such as Cork and Galway, will be cut and directed elsewhere under plans to be announced today.
Minister for the Environment Alan Kelly will outline how the Government intends to ensure councils with lower property tax yields do not suffer financially in comparison to areas benefiting from bigger tax yields on account of higher house prices and populations.
Councils have the power to vary property tax rates up or down by as much as 15 per cent and have until the end of the month to notify the Revenue Commissioners of their intentions for next year.
The Government has committed to allowing 80 per cent of the tax take to stay within the local authority area in which it is collected. About a dozen councils will receive enough money to provide a windfall which would allow them to reduce the tax rates or engage in additional spending, while Fingal and Dún Laoghaire have enough to do both.
How to rebalance funding from these areas to less well-off councils such as Leitrim and Longford has been the subject of Coalition negotiations for a number of months. A final decision was reached at the first Cabinet meeting following the summer recess yesterday, with one figure describing the outcome as “kind of confusing”.
‘Better off’
“There is a rejig of the road and housing grants, though, to reduce the windfall, which will cause comment, but after the jigs and the reels all the Dublin authorities will still be much better off than now.”
A Government spokesman said “no local authority will be worse off than they were last year”.
The Cabinet’s return to work after the summer break follows positive tax returns for August which have intensified the clamour for tax cuts in the budget next month.
There was no substantive discussion on the budget and senior Coalition figures stressed yesterday that there is no scope for a giveaway package.
The Cabinet was also briefed on the situation in the Golan Heights, where Irish troops exchanged fire last weekend with Islamist insurgents. Ministers were told that the current military assessment is that the Irish mission remains under “significant” threat.
The Government’s position remains that the Irish mission will stay in place pending a UN review of the mandate under which it serves.
