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.

 

LOCAL AUTHORITY JURISDICTION	ACCUMULATED REVENUE DEFICIT 2010	IMPROVEMENT /  DETERIORATION 2007-2010
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%
NATIONAL AVERAGE	80.5%	52.4%
	Available Houses, 2009	Potential 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

 

Gay Mitchell’s Áras campaign must be in lamentable trouble

Under a front page headline ‘Phil Hogan warns No terrorist in the Áras’ today’s edition of The Sunday Independent report today that Ireland would be left looking like a banana republic and denuded of serious levels of corporate investment within 24 months’ if Martin McGuinness is elected President. Not one syllable of explanation is reported as to how Gay Mitchell, the Fine Gael candidate is ‘suitable’ in Hogan’s opinion.

Does this suggest that those sponsoring corporate investment in Ireland are likely to reject the democratic mandate of the Irish people as Hogan warns us of their jackboot influence?

The implication of the Phil Hogan remark would therefore presumably mean that Northern Ireland is a dead duck as far as its economic development is concerned because a terrorist has become a Government leader and business decision makers might ‘whisper’ that they are ‘appalled’. That fragile economy, which already has an overweening dependency on State intervention and money, will therefore never achieve the vitality, independence and prosperity that can only be derived from the private sector if that is the case.

The Fine Gael party has responded to the Mitchell nomination with the sense of excitement, shock and awe more typically associated with a monastery of Trappist monks’ or an enclosed order of nuns.

Gay Mitchell was chosen 83 days ago as the Fine Gael candidate but he is badly trailing the popularity of his own party in the opinion polls. Why are the plain people of Ireland not recognising his ‘suitability’ to become the next President and reflecting in the polls? Why is Mitchell not colonising the public imagination with excitement and exhilaration at the prospect of him becoming President? Poll ratings of 10% in favour and 90% not in favour of his candidacy are not trends that inspire confidence in a public that is about to make a 7-year commitment in choosing of candidate to become our President.

If Ireland is threatened with being associated with the reputation of a banana republic the source of this lies with unprosecuted bankers rather than with presidential candidates. If the Fine Gael Party do not demonstrate even mild conviction that Mitchell is a desirable candidate how can they expect the electorate to respond otherwise? Mr Hogan, your starting point is to say something, anything positive about the candidacy of Mr Mitchell before treating the electorate as if they are undiscriminating buffoons. 

Mr Hogan, if Fine Gael have chosen a dud candidate for this election that is their problem and that is a reflection of their judgement – not the judgement of the electorate.