Thursday 26 April 2018

Councils owed over €400m in unpaid rents, loans and rates

Report shows council shortfall of €291m in unpaid commercial rates alone

Eoghan Murphy. Photo: Doug O'Connor
Eoghan Murphy. Photo: Doug O'Connor
Paul Melia

Paul Melia

Local authorities are owed more than €400m in unpaid rents, housing loans and rates, with some tenants refusing to pay rent for more than a year.

Reports from the local government auditor also highlight low collection rates in some local authorities. In some cases, councils are losing out on commercial rates because buildings have not been valued.

The figures are contained in audits of the country's local ­authorities. These are ­completed every year by the spending watchdog based in the Department of Housing, Community and Local Government.

Of the 31 local authorities, 27 audits have been finalised. None are available for Cork city, Louth, Mayo and Waterford city and county councils.

The audits show that councils are owed hundreds of millions of euro, with €72m owed in unpaid rents, some €37m in loans drawn down to buy homes, and €291m in commercial rates. The country's biggest local authority, Dublin City Council, is owed €75.9m, consisting of €22.5m in rent, €12.4m in loans and €41m in rates.

The second-highest arrears are in South Dublin for rent (€7.75m) and rates (€23.15m), while Cork County Council comes second for housing loan arrears (€4.1m).

The auditor has told some councils that they must improve their performance. "While the housing loan collection performance again slightly improved in 2016, it continues to remain relatively poor," the auditor told Cork County Council. "The performance yield of 55pc remains significantly below the 2015 national average for local authorities of 68pc."

The council said that loan arrears had reduced by €840,000 in the previous year "due to continued focus on arrears" and that it was considering updating its housing loan system to "improve functionality and thus aid debt management".

The auditor noted that in Sligo rate collection was improving but said the council had to ensure that all relevant properties were rateable "in a timely manner".

"It was noted that the council only had four applicable new properties rated in 2016, which is significantly less than surrounding local authorities," the auditor said.

"It was also noted that there were two wind farms which were in operation for a significant period of time and had not been rated by the council. This has resulted in a significant loss of income."

Collection

The council said it had put in place "updated procedures", which were now "operating satisfactorily".

In Carlow, the council has above-average collection rates but noted that it was difficult to retain "specialist revenue-collection staff".

It said: "Revenue collection is challenging even in times of relative prosperity, but it has become particularly complex since the economic downturn and the current level of arrears is a reflection on the changed economic circumstances of our customers post-2008."

The reports also highlight issues with procuring services and tendering, with some local authorities failing to properly advertise contracts.

The auditors also reference "unfunded balances" totalling €318m, where projects including housing, roads, land purchases and leisure facilities had been completed but funding for the projects had not been identified.

In many cases, councils said they were in discussions with State agencies or departments about the projects or would fund the schemes from their own resources.

There are also issues in some local authorities with an interest in companies, particularly leisure and arts facilities, where the firm is reliant on council funding or where corporate governance is of concern.

Some councils have also been told that property and land registers are "inadequate" and "incomplete", with "slow progress" recorded in updating information due to a lack of available resources.

The problem is highlighted by major issues with ­transferring water infrastructure to Irish Water. Across 12 local authorities, some 944 assets, including reservoirs, pumping stations and treatment plants, are now in the ownership of the utility, but another 2,030 have yet to be transferred.

Among the issues relating to registration of title are boundary matters, assets being located on land not owned by the council, questions of rights of way and pumping stations being located on private estates.

Cavan County Council said that progress was "steady but slow, which is normal for this type of work".

It added that it would take a "number of years to complete".

Irish Independent

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