Wednesday, 14 October 2009
Dáil Eireann Debate
106. Deputy Joanna Tuffy asked the Minister for the Environment, Heritage and Local Government the steps he has taken to ensure that outstanding development levies are collected from developers by local authorities; the moneys outstanding in total; the moneys outstanding in respect of each local authority; and if he will make a statement on the matter. [36054/09]
Deputy John Gormley: As Minister, my role is to provide the necessary statutory and policy framework within which individual development contribution schemes are adopted by each local authority. The adoption of individual development contribution schemes is a reserved function of the locally elected members of each planning authority. It is a matter for the members to determine the level of contribution and the types of development to which they will apply.
Each planning authority also is required to include details of contributions received in that year, as well as information on how the contributions have been expended, in the statutory annual accounts of the authority. A new requirement was introduced for the financial year 2008 to include details in the annual financial statement of all accrued uncollected levies due to the planning authority. The 2008 statements will be the subject of a full audit by the local government audit service during the audit cycle 2009-10. My Department does not, therefore, have up-to-date information on the amount of development contributions due to planning authorities.
As with all local charges, the invoicing and collection of any outstanding development contributions is a matter for the local authority concerned to manage in the light of prevailing local circumstances and in accordance with normal accountancy procedures. Where any payments required in respect of development contributions are not settled, such payments may be pursued by the planning authority through the courts as a contract debt.
Deputy Joanna Tuffy: I thank the Minister for his response. I note he has not yet received the information regarding the amount that is owed to the local authorities for development levies. That is worrying in some ways because many newspapers have carried partial information that suggests the amount of money is considerable. In February, The Irish Times wrote that the four Dublin local authorities are collectively owed €322 million by property developers in unpaid levies. Dublin City Council is owed €142 million, Fingal County Council is owed €70 million and South Dublin County Council is owed €22.5 million. One story that caught my eye is related to the property bubble and how property developers are affected. It also relates to NAMA. A story in the newspapers over the summer concerned a development company that owed some €750,000 to local authorities. It also owed money to Anglo Irish Bank, which is a secured creditor.
Deputy Joanna Tuffy: This will become a major issue. We may find that local authorities turn out to be insolvent because development levies were a major source of funding for local authorities. If they do not collect these levies over the next few years, local government funding is reduced and they have difficulty collecting water charges from businesses that claim they cannot pay they will be in big trouble. What is the Minister proposing to do on this and what information does he have?
Deputy John Gormley: I have some extra information. Authorities are systematically pursuing outstanding development contributions. The action taken includes construction site visits by senior planning staff in order to determine an accurate picture of the moneys due. Failure to pay amounts due to the authority has resulted in enforcement proceedings being initiated under planning legislation and this will continue to be the case. County and city managers are maintaining a policy of actively managing any arrears that may occur or where money is due to be paid and remains unpaid. Staff have been assigned specifically to deal with the collection of outstanding development contributions.
With regard to local authorities referred to at the beginning of Deputy Tuffy’s contribution, Dún Laoghaire-Rathdown County Council has 219 cases that have been referred to the planning enforcement section for appropriate legal action to recover the moneys due. Deputy Tuffy also referred to Dublin City Council. Since January 2009 in excess of 200 developments have been inspected to establish if development contributions are due. Following these inspections, 92 warning letters under section 152 and 64 section 154 enforcement notices were issued, 10 section 157 referrals have been made to the District Court and the city council has been successful in the cases that have been heard to date. Fingal County Council has 50 cases at various stages of legal proceedings. These were instituted for the amount outstanding in respect of development contributions.
I could go through this in detail but I do not want to waste the time of Deputy Tuffy. In Kilkenny, 90 cases are with the legal advisors for legal action and Cork County Council has similar figures. We see a picture of actively pursuing these moneys. Deputy Tuffy can have no real concern that the local authorities are not pursuing this. It makes sense because it is their revenue stream and local authorities will do this.
Deputy Joanna Tuffy: It is welcome that local authorities are pursuing these development levies from the developers and that extra staff have been assigned to this. What if the local authorities are not able to collect the money? Is the Government examining this problem? At the Green Party conference at the weekend the Minister referred to how we will fund local authorities in the future. Local authorities were making money in the same unsustainable way as banks and the Government. All of this development was unsustainable and now it has collapsed. Local authorities are one of the institutions that will pay the price for this type of one-dimensional view of how to get the bulk of funding. Does the Minister have a view of how we will deal with this? Are there plans or emergency plans if they do not collect funds?
I referred to the developer, Laragan Developments Limited, that went in to examinership. The secured creditor was Anglo Irish Bank and the unsecured creditor was the local authority. When developers go into examinership will it be the case that local authorities lose out to the banks because the banks or NAMA have secured debts and the local authorities do not? We could have a crisis in local government besides unfinished estates.
Deputy John Gormley: I take Deputy Tuffy’s point that much of this is associated with the housing bubble. We conducted a survey and the breakdown of development contribution money as applied across various programme headings of my Department. The survey, conducted in 2008, show that 41% of development contributions are for water and sewerage, 45% on roads and 14% on amenities. We continue with that infrastructural development and continue to invest record amounts in the water services investment programme and public transport. We will continue to receive development contributions on that basis.
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