Monday, May 14, 2012

The chaotic, poorly-led Department of the Environment, Community & Local Government

There are no fewer than 124 local authorities in the State which have directly elected representation – 5 city councils, 29 county councils, 5 borough councils, 75 town councils, 8 regional authorities and 2 regional assemblies. While these ostensibly have an independent existence their mother ship, or spiritual temple, is the Department of Environment, Community and Local Government.

Big Phil Hogan and his predecessors, Éamon Ó Cuív, John Gormley, Dick Roche, Martin Cullen, Noel Dempsey and Padraig Flynn in the twice rebranded role of Minister for the Environment, Community and Local Government have an atrocious and inept record of effective political leadership. 

Despite, or perhaps as a consequence of it, a private members bill to bring the scrutiny of local authorities into the ambit of the Comptroller & Auditor General emerged and failed at the behest of the Government in Dáil Éireann on Friday 11 May 2012.

The Government, it seems, ‘supports the principle of greater scrutiny of public money – but only in the context of public sector reform’.  Virtue is a sun-bathed, idyllic resort located far away.

The audit of local authorities is carried out in Big Phil’s own department under his jurisdiction.  This begs the question of what happens to the audit findings advocated by local government auditors.

Going back to 1997 the jurisdictional landscape of this Department if littered with milestones and tombstones of disgrace that include:

  • Dempsey’s inauguration of The Mahon Tribunal in 1997 without effective independent oversight of the cost implications or spending or accountability.
  • Cullen’s escapade with electronic voting machines and his subversion of the purpose of the Planning and Development (Amendment) Act 2002 which allowed gobshite developers evade their statutory duty of providing 20% of development for social housing.
  • Grossly inadequate oversight or control of the Dublin Dockland Development Authority whose buccaneering legacy has left taxpayers with a financial nightmare costing hundreds of millions of Euro – despite the Department being represented on this board at a senior level.
  • The Building Societies Act 1989 sponsored by Flynn and successor legislation promoted by Roche at the behest of predatory building society executives out for a quick kill by abandoning mutual status, a stunt that eventually obliterated the sector at enormous public cost and scuppered the building society sector.
  • Failure to rein in the exuberant planning permission zeal of gombeen local councillors whose legacy is a collapsed construction sector and a landscape pock-marked with ghost housing estates.  By the end of 2009 some 42,058 hectares of land was zoned for development – 450% of actual need. The land and development component of NAMA’s €31.78 billion portfolio includes land and development assets in Ireland listed with a value of €5.3 billion.

    Interestingly, housing completions in Ireland and Spain in 2007 were 18 per 1,000 citizens – more than twice the rate of housing construction elsewhere in Europe.  Mortgage debt increased from €47.2 billion (45% of GDP) in 2002 to €139.8 billion (74% of GDP) in 2007, an increase of 196%.
  • Inaugurating a Household Charge and only collecting 58% of the target revenue.

The loss of sovereign economic independence in 2010 has resulted in a major tightening of local authorities State supported budgets – mainly on the capital side. 

The State provides these bodies with €4.45 billion per annum under a variety of labels from a diversity of government departments.  That sum is approximately €1 billion less than the sum thrown at them in 2007.

The principal source of the independent income of local authorities is derived from the commercial rates, commercial water rates, development contributions and various charges and borrowings.

Collectively their revenue expenditure in 2010 was €4.45 billion, a very modest drop of €62 million on peak spending in 2007.  Capital spending was pared from €6.2 billion in 2007 to €2.8 billion in 2010 but the population expanded by over 330,000 (8.2%) in this period. The losers as a result of the cut back in the capital budget were contractors and professional service providers.  Despite the downturn local authorities spent €1.9 billion on land between 2007 and 2010.

Their combined balance sheet includes fixed assets valued at over €90 billion, listed at cost of acquisition, not prevailing market value.  The fixed assets include land and housing valued at original cost of over €20 billion.  The local government auditor points to the need for an asset revaluation but when will this occur?  How can the accounts of local authorities be true and fair if the valuation of important assets ignores the collapse of the property market?

The next big test of Big Phil’s political virility will be reflected in how he controls spendthrift  councils.  Too many of them are running outrageous accumulated deficits and the financial position of Donegal and Sligo County Councils is beyond the pale.


Co Donegal €12,704,598 -€434,780
Co Sligo €9,981,616 €8,512,114
Meath €8,329,809 €1,427,445
Co Waterford €6,916,907 €32,230
Co Wexford €6,365,810 €2,491,097
Co Kildare €3,913,254 -€2,550,187
Mayo €2,747,647 -€1,177,314
Co Wicklow €2,092,176 €330,661
Westmeath €2,046,872 €1,618,639
Offaly €1,899,146 €1,834,156
Co Galway €1,383,882 €2,147,187
Co Longford €595,892 €2,095,687
Co Leitrim €123,121 €363,739
Galway City €67,743 €8,177,154
  Commercial Rates collected in 2010 as % Commercial Rates Billed
in 2010
Commercial Water Rates collected in 2010 as
% Billed Commercial Water Rates Billed in 2010
Co Donegal 64.3% 35.6%
Co Sligo 78.7% 48.1%
Meath 86.8% 39.5%
Co Waterford 73.2% 62.1%
Co Wexford 76.5% 37.4%
Co Kildare 80.6% 55.9%
Mayo 83.0% 50.7%
Co Wicklow 76.5% 41.1%
Westmeath 85.2% 36.1%
Offaly 93.4% 37.1%
Co Galway 78.2% 49.6%
Co Longford 85.3% 55.9%
Co Leitrim 78.0% 41.2%
Galway City 63.7% 55.9%
  Available Houses,
Oversupply, or
- Undersupply
Co Donegal 13,874 9,064
Co Sligo 5,436 3,727
Meath 9,179 610
Co Waterford 4,509 2,276
Co Wexford 9,419 3,757
Co Kildare 10,075 1,504
Mayo 9,875 6,104
Co Wicklow 5,486 914
Westmeath 5,571 2,393
Offaly 4,159 1,641
Co Galway 12,990 6,975
Co Longford 4,385 3,169
Co Leitrim 3,871 2,836
Galway City 3,087 -56
STATE 260,032 120,248


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