The electorate witnessed a classic case of Government cowardice yesterday when the Minister for the Environment, Dick Roche, published - and immediately shelved - a report on the need to reform local authority funding. It took nearly two years, a great deal of professional expertise and €291,000 in taxpayers' money to produce, and less than an hour to effectively shred it. This is the sort of response that damages the credibility of central government.
Proposals designed to broaden and consolidate the local authority funding base by introducing water charges and rates for second homes and for exempted commercial properties were rejected as being contrary to Government policy. Instead, Mr Roche spoke of higher planning fees and encouraging local authorities to become more efficient. The Minister's response was astonishing. There is no doubt that the instant rejection of the main tax-raising elements of the report was informed by political pragmatism in the run-up to the next general election. But Mr Roche went on to ignore its central thesis that necessary efficiencies at local authority level "cannot be realised within existing financing structures". He claimed the present funding system "has served us particularly well".
Why waste taxpayers' money in commissioning the Indecon International report, only to retreat to a make-believe world? Mr Roche may have asked Indecon to produce this report in 2004, but funding and spending problems that existed back then have worsened. Local authorities have been lumbered with much of the cost of national benchmarking awards.
This report estimates that pay will account for almost two-thirds of projected cost increases by 2010. That means councils will experience an annual shortfall of up to €1,500 million in four years' time, if existing services are to be maintained.
Ireland is in the unique position of having no local domestic, income or sales taxes. Apart from Greece, service charges are the lowest in the EU. Councils are overly dependent on central government for funding, which inhibits development of local democracy and means those who spend the money are not responsible for raising it. Similar conclusions and recommendations for local tax reform were put forward in a report published in 1996.
The Minister hopes to meet the demands of local authorities "in 2006 and beyond" by increasing the flow of money from the motor tax fund. The hard decisions arising from the abolition of rates in 1977 are again postponed. Proper forward planning and adequate funding are required if the political and constitutional reforms of recent years are to bear fruit. Elected councillors have been given increased responsibilities. The dual mandate of Oireachtas members has been ended. This Government, like many of its predecessors over the past 30 years, shows no sign of grasping the nettle.