Covid-19 costing Local Councils €100m a month – more funding will be needed

27 May 2020

Speaking in the Dáil on local government funding, Labour TD for Wexford Brendan Howlin raised his concerns with the Minister on the impact Covid-19 is having on local councils across the country, estimating they are down €100m a month in funding, and called on the Government to make up any revenue shortfall for vital services.

Deputy Howlin said: 

“Our local government system is a vital component of our response to Covid-19 and local authorities have been the lynchpin supporting communities in their efforts across the country.

“The restrictions on economic activity has had a huge impact on our society, and local authority funding resources have been seriously impacted. I estimate that it is costing our councils about €100m a month and more support will be needed from central government.

“As we move towards the recovery phase councils will be even more important as drivers of the reopening of our local economies.

“However local authorities are facing an unprecedented funding crisis and they would have had an estimated income of €5.7 billion this year that was expected to pay for the services that are all the more essential now.

“For example, commercial rates account for about one third of funding for councils bringing in €1.6 billion in revenue or about €400m every quarter. Even with the Government support of €260m that covers 65% of the expected shortfall, and assuming some businesses continue to pay rates, there is still a loss of revenue. That is equivalent to an impact of €87m a month, and most councils have also had increased expenditure to adapt to the new reality of Covid-19.

“On top of that, goods and services provided by local authorities bring in about €1.3 billion in revenue. Some of that remains, but a lot has been lost and won’t be recovered. Parking fees, payments for leisure facilities and access charges for tourism sites, even harbour fees have all been badly hit. This loss of revenue has not been covered and could cost councils over €100m this year, or over €10m a month across the country.

“Services still have to be provided by our councils, and that’s why I am asking the Minister if a comprehensive analysis has been carried out of the revenue losses faced by councils across the country?

“The Minister and the Government must commit now to making up any revenue shortfall for our vital local services.”

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