Friday 24 November 2017

Building works under way despite outstanding bills

The previous legislation dated back to the 1940s and covered up to 300,000 workers
The previous legislation dated back to the 1940s and covered up to 300,000 workers
Paul Melia

Paul Melia

Developers have resumed building new homes despite not settling bills for unpaid levies due to the local authority.

City and county councils are owed almost €320m in development levies, reports from the Local Government Auditor show, but many have major issues collecting the outstanding amounts.

Among the main reasons for not collecting the money are outstanding legal actions and disputes which have been sent for arbitration.

Some councils have also reported being unable to investigate if building works had resumed on sites for which money was owed.

In South Tipperary, which is owed almost €2.2m, there were not sufficient staff available to inspect building sites - as a result, the council could not say where developments have commenced, which would require levies to be paid.

The council has also allowed a number of planning bonds to expire "due to an oversight", which the local authority is now addressing.

The auditor also said that in Offaly, agreement was reached with a "major developer" that outstanding amounts would become payable when certificates were issued by the council saying the development had been completed in line with the planning permission. However, the money had not been paid over.

Leitrim County Council said it was proving "very difficult" to collect cash bonds linked with developments, adding it was "increasingly evident" that providers were no longer willing to put new bonds in place or extend existing arrangements.

These bonds are used to complete roads, public spaces and lighting in the event that the developer goes out of business.

Noting that collection rates were "far from satisfactory" in many councils, the auditor also advised authorities to increase the amounts set aside for bad debts.

In Clare, some €6.419m is owed, of which €4.4m is classed as "short term" debt. However, the council has put a bad debt provision in place of €2.775m.

"The assessment of potential bad debts is complicated by court proceedings, arbitrations and extant planning permissions. The council reviewed the bad debt provision at the end of 2013 and will undertake a further review in 2014 to assess collection levels and the progress of legal and arbitration proceedings," the local authority said.

In Cavan, 25 site inspections were carried out in 2013, with payment of outstanding levies based on the sale, rent or lease of completed properties. The auditor said regular site inspections should be carried out as part of following-up arrears.

Records

Some councils have admitted they will not collect the amounts outstanding. Mayo is owed €9.6m, but has a bad debt provision of €6m. Limerick County is owed €28.8m - but expects to write off €27.5m of this amount.

There are also issues with records held by some local authorities. Concerns have been raised in Galway County Council about the accuracy of its records, with the auditor saying it is not clear if developments have commenced; if legal action has been undertaken or if the outstanding monies can be collected because they are statute barred.

In addition, incorrect levies may have been imposed.

"All of these areas need to be thoroughly investigated and proper collectable debts established for inclusion in future accounts," the auditor said. The council said the area would receive "further attention".

In Dublin City Council, there are a "number of weaknesses" in its system including the "poor quality" of reports.

The council said work was underway in this area, with new IT systems to address the outstanding issues raised.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News