Councillors Defer Vote on Budget Amid Challenges with Funding

Dublin city councillors deferred voting on the city’s budget for the coming year at City Hall on Monday, pushing the vote until next week, amid a stand-off with the Department of Housing, Planning and Local Government over funding.

A draft budget before councillors from council chief executive Owen Keegan suggested that they should increase rates on commercial businesses, parking charges, social housing rents, and the East Link toll, and slash what’s known as the “area discretionary fund” in order to balance the books.

At the meeting, councillors said they wanted to press the Department of Housing and the Department of Finance to cough up €8.4 million, to cover a hole in the budget that came from changes to how rates for Irish Water’s properties are calculated.

The government had earlier said that changes at Irish Water would be “revenue neutral” for councils, and that grant funding would be considered for Dublin City Council to offset the dip in money, said Keegan’s draft budget report.

“Dublin City Council has now been advised that no grant funding will be forthcoming and this huge loss of income to the City Council in 2020 and beyond will not be addressed,” the report says. “This is the most significant issue in the 2020 budgetary process.”

At the meeting, Green Party Councillor Neasa Hourigan said: “This is a budget that will see the most vulnerable Dubliners pay for the largesse of a government that states time and time again to those people, you’re not important to us.”

Fine Gael Councillor Paddy McCartan said that his colleagues in the chamber were shirking their duties. “It is up to this council to deliver a budget, rather than walk away from their responsibilities,” he said.

The Draft Budget

The draft budget set before councillors on Monday night had an estimated expenditure for the coming year of €1.026 billion. For comparison, the council expects to spend €977 million this year, the report showed.

“Despite a relatively benign economic environment, the City Council faces difficult challenges in preparing a balanced Budget for 2020,” said Keegan’s report.

“Significant additional income must be raised if services are to be maintained,” it said. “The draft Budget points to a Local Government funding system that does not provide the required financial resources to sustain Dublin City Council services.”

The draft budget report says that rising costs of services includes insurance, management fees for social homes acquired through what’s known as Part V, and doing up voids, or vacant council homes.

Meanwhile, the council has only brought in modest rate increases for commercial businesses, which “is not sustainable or even desirable”, the report says. Also, the model for assessing rents from social tenants has largely remained the same, even as the cost of housing provision is rising, it says.

Meanwhile, councillors have voted to lower the local property tax, which doesn’t yield that much, and the bulk of the money that does come back to the city has replaced grant funding from central government – rather than supplementing it.

Expected income losses include money that Dublin City Council is paying out for the emergency ambulance service that, in theory, could be recouped from the HSE. But only after changes have been made to the service – which council managers and trade unions have not agreed upon.

While Keegan’s report doesn’t mention it directly, figures in the draft budget also show that spending on homeless services is expected to rise to more than €190 million in 2020.

Last year, the council expected to spend €154 million on homeless services, but it’s looking like it will be closer to €177 million.

The Irish Water Question

Dublin City Council lost €8.4 million in rates from Irish Water, after changes made by the Department of Housing to how those rates are divvied up across the country. Several councillors said they wanted to push harder to get that reimbursed.

The government had said that changes at Irish Water would be “revenue neutral” for councils, and that grant funding would be considered for Dublin City Council to offset the dip in money.

At the council meeting, Fine Gael Councillor McCartan said that €8.4 million pales in significance in comparison to the €32 million in arrears owed to the council by tenants in social housing.

He said it was an indictment of council officials that they hadn’t dealt with that issue. “That has not been addressed,” he said.

Labour Councillor Dermot Lacey said the Department of Housing has broken its promises and that officials in Custom House couldn’t have it both ways.

“They can not demand of us that we exercise our responsibilities, when this government abjectly fails to honour its commitments, its duties and its responsibilities to the people of Dublin,” Lacey said.

Rises Here and There

Keegan’s draft budget suggests increasing the East Link toll from €1.40 to €1.90 per transaction, and funnelling the €1.9 million this would raise into road improvements, including footpaths and cycleways.

It also suggests increase parking charges. Sinn Féin Councillor Séamas McGrattan laster said they’re looking at hiking that by 30 cents an hour.

The draft budget, as it is at the moment, also includes increasing commercial rates by 1.5 percent, and dropping the vacancy refund rate further.

The most disputed proposal is to up rents on council tenants, with the suggested increase from 15 percent to 16 percent of a tenants’ weekly income above a certain threshold.

The council could use the extra €4 million a year to fund a loan to refurbish vacant housing units or voids and on energy efficiency works and works to improve fire-safety standards, it said.

At a full council meeting earlier this month, several councillors had raised concerns about how funding to renovate voids – social homes that are vacant after one tenant has moved out, and before a new tenant moves in – had dried up.

The council’s head of housing, Brendan Kenny, said they’d spent their budget already at that stage in the year, so there had been a slowdown in the turnarounds.

The council’s head of finance, Kathy Quinn, said the Department of Housing reimburses 45 percent of the cost of renovating voids – but that the council has to spend all of the money upfront.

At the more recent budget meeting, People Before Profit Councillor Hazel de Nortúin called next year’s draft budget an austerity budget, which puts the shortfall back onto Dublin’s citizens.

The council is trying to plug a funding gap for voids with tenants’ rents, she said. But “we’re not going to be putting any money back into services to fix those issues within housing maintenance that tenants are already paying for”.

From the Department of Housing

On Tuesday, a spokesperson for the Department of Housing pointed out that councillors had varied the local property tax downwards by 15 percent for the coming year.

Had the council instead reduced the local property tax by only 5 percent, it would have raised the €8 million shortfall now at issue, the spokesperson said.

Like for like, local authorities will get €23 million more in funding from the local government fund in 2020 than in 2019, they said.

That “will support local authorities in meeting additional pay and pension costs arising from national pay agreements”, they said.

For Dublin City Council, there’s an extra €5 million, the spokesperson said.

Slashing Area Funds

In past years, councillors have had a special “discretionary fund” to support local projects within their constituencies.

Councillors chose in the past to spend that on projects such as expanding the project to paint art on signal boxes, adding cycle facilities, keeping swimming pools open longer, or providing Halloween festivals to try to give bored kids something to do, and limit anti-social behaviour.

Recently, councillors voted to look at whether the discretionary funds could be used to pilot participatory budgeting, whereby Dubliners get to decide how some of it is spent.

Last year, that fund was €6.2 million, divided up among the five administrative areas of the city. This year’s draft budget slashes it to €1.25 million.

At the council meeting on Monday, Fianna Fáil Councillor Deirdre Heney said that the discretionary budget helped councillors to meet the social and other needs of those living in the city. If they got the €8.4 million from central government, “it will allow us to continue to meet those needs”, she said.

Sinn Féin’s McGrattan, after the meeting, said that the discretionary fund has done a huge amount of good in the city for small groups, and for enhancing areas.

“You sort of see a bit of value in the council spending,” he said. “You won’t get the same investment next year and probably going forward.”

A Wider Debate

Roughly a third of the council’s budget comes from grants from central government, while two-thirds is made up of money from commercial rates, services, social tenants’ rent and other streams.

But even the money that the council itself collects often has to be used in ways dictated from above, said Labour’s Lacey – who pointed to rules for doing up vacant council homes, or voids, as an example.

For voids, the department lays down standards. “But in laying down standards, they don’t give us the money for it,” he says.

Every councillor could talk about going into lovely council flats, where new tenants waiting to move in love the way the old tenants have had it, he said. But “we have to go in and rip all that out, and put it back to the way, the standard way, that the department lays down”. (That’s a long-running complaint.)

For Lacey, it’s all symptomatic of a wider dysfunction which means it’s past time for a discussion and changes to how local authorities in Ireland are funded.

“I have called so many times for a national forum on local government funding,” he said, the day after the meeting.

Compare how people think about local government funding versus a system such as PAYE, he says.

For PAYE, everybody considers that a fair system, even if they argue over the rates and the allowances, he says. “But the system is agreed, and the system has widespread acceptance.”

“What we don’t have in local government is an agreed system of funding local government,” he says. They should settle that, then they can argue about rates and amounts and so on within that.

Yesterday, Sinn Féin’s McGrattan said similar. “There’s probably a wider debate to happen about how councils are funded,” he said. “How we fund local authorities going forward.”

Dublin City Councillors have until 1 December to agree a budget.