Environment: Local authorities will have to raise commercial rates and increase other levies to compensate for a shortfall of €42 million for benchmarking pay awards next year.
The estimated cost to local authorities of benchmarking and payments under the Sustaining Progress agreement is put at €80 million, but they have only been allocated an additional €38 million.
The Minister for the Environment, Mr Cullen, said this was "a lot more than the zero increase they expected" and suggested that revenue "buoyancy" would raise the extra money needed to meet pay bills.
He said some €60 million had been paid out in the current year for benchmarking "and almost nobody noticed it. The local government system didn't collapse and there was no reduction in services to the public". Mr Cullen said he recognised that finding the extra money needed in 2004 would be "a real challenge for local government", especially as he expected any increases in charges or levies to be "very reasonable and fair".
To put the figure in context, he pointed out that the total spend by local authorities was almost €4 billion a year - so the €42 million shortfall only represented 1 per cent of their overall budget.
He also said he did not want to see a "massive rise in waste charges", particularly if it hit recycling. "What I will be telling the local authorities is that they must squeeze more value out of every euro they spend."
But Mr John Dunne, chief executive of the Chambers of Commerce of Ireland, said he feared the expected "buoyancy" would come from raising business rates and imposing other levies on the community.
He noted that the Department of the Environment had raised its own wage bill by 6 per cent and its expenses by 7 per cent, while expecting the local authorities to "juggle figures" to meet the cost of benchmarking.
"It's not fair for the Government to be simply exporting the problem onto the desks of the county managers with an eye ultimately to the business community to foot the bill ... Where are they expected to find the money?" Both Mr Cullen and the Minister of State for Housing, Mr Noel Ahern, hailed a €33 million increase in the allocation for social housing. This would enable 5,000 "starts" to be made during 2004.
Overall, the Department will spend €2.345 billion next year, an increase of 0.2 per cent on 2003. The main priorities were to maintain spending on housing, roads and local services, such as the water programme.
Officials explained that an apparent cut of 32 per cent in the Environmental Protection Agency's budget would be made up from the Environment Fund, which would raise €42 million from the plastic bag and landfill levies.
The EPA will be receiving €7 million from the fund, which one official said had been almost designed to be "raided". But he stressed that this would finance environmental research rather than wages and salaries.
The National Parks and Wildlife Service budget has been cut by 1 per cent, as have fire and emergency services. The planning tribunal budget is down 10 per cent to €12 million because it did not use all of the 2003 allocation.
The water and sewerage services programme has been cut by 7 per cent to €440 million, but Mr Cullen said this merely reflected the completion of large schemes such as the €250 million Dublin Bay Project.
One of the biggest single cuts, of 35 per cent, applies to partnerships in local authorities, where the allocation is down from €5.8 million to €3.8 million. Architectural protection grants are up 1 per cent to €3.29 million..
