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Thursday 18 September 2014

Councils' budgets cut as too few pay household charge

Published 26/11/2012 | 05:00

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LOCAL authorities have been hit with a second round of budget cuts because of low household charge collection rates.

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Almost €1m has been taken from councils in Donegal, Cork, Laois, Louth, Meath, south Dublin and Offaly because fewer than 65pc of residents have paid the controversial €100 tax.

The money was withheld last week by the Department of the Environment after councils were warned in the summer to improve collection rates.

The cuts come on top of €15.6m being taken from the State's 34 local councils earlier this year. But the decision to withhold another €900,000 from the six councils will have serious effects on local services.

This is because many have serious financial issues to address, with auditors warning that some are on the brink of going bust despite being owed millions of euro in unpaid water charges and commercial rates.

The worst-hit council is Donegal, where just 55pc of people have paid the charge.

More than €1.1m, or 4.3pc, of their annual budget has been slashed this year with €310,000 taken last week alone.

The next hardest-hit are:

• Offaly, which had €121,648 deducted from its budget last week and is down a total of €508,432 (4.2pc) this year.

• Laois lost €65,949 last week and is now down €475,549 (3.6pc) this year.

• Louth lost €45,652 and is down €323,945 (3.5pc) this year.

• Meath lost €108,425 and is down €753,260 (3.5pc) this year.

• Cork County lost €167,478 and is down €1.1m (3.4pc) this year.

• South Dublin lost €84,820 and is down €560,030 (3.3pc) this year.

All of the councils hit have household charge payment rates of between 59pc and 64pc.

The average budgetary cut experienced across the State's 34 local authorities is 2.55pc.

The councils were targeted after Environment Minister Phil Hogan warned in September that unless all achieved a collection rate of more than 65pc by November, their funding would be reduced.

Some 1.6 million homeowners are liable for the household charge, which was expected to yield €160m a year. To date, just €110m has been collected.

The Department of the Environment defended the cuts, saying councils that improved collection rates before the end of year would receive some of the funding back.

"The final amount of grants available for 2012 will be revisited and reviewed at the end of the year to take account of the financial position at that stage, including progress on securing an increased household charge yield," a spokesman said.

Deficit

"Any recoupment of the reduction for these local authorities will be made in early 2013."

The Local Government Auditor says he is concerned about the "financial standing" of Donegal County Council, which, despite cutting costs, owes €156m in long-term loans and has a deficit of more than €12m.

The council is also owed €11m in unpaid commercial rates and €11.7m in unpaid water charges.

Meath has a deficit of €6.8m, and the household charge collection rate is just 62pc. It is owed almost €9m.

Laois, which also has a 62pc collection rate, is owed €5m.

Irish Independent

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