Local Government Reform

Nat O'Connor: A lot of people have heard of 'bord snip nua' and the various recommendations it made for cutting or changing public services. However, the Report of the Local Government Efficiency Review Group, published in July, got a lot less attention. It sets out a range of areas where costs could be reduced, but it also reviews local government services in more general terms.

For anyone stuck for summer reading, there's 209 pages of detail. But for quick reference, its 106 recommendations are listed from page 171 to page 180.

Interesting items include:

• Ending the situation where towns strike different commercial rates from their counties (Rec. 4), which businesses may welcome;
• Reducing the number of city/county managers from 34 to 24 (Rec. 8), which is in effect a merger of those local authorities at the top managerial level;
• Putting tolls on national roads (Rec. 56), which is madness;
• Full cost-recovery for planning to be sought, especially for major developments (Rec 68), which is logical but could deter higher density development;
• A €10 handling fee for non-online motor tax payments (Rec 75), which further punishes those who don't have Internet access, especially those who already pay the higher tax rate charged quarterly.

In all, the recommendations are designed to raise €511 million a year.

Different recommendations will no doubt strike different readers. But a couple of general points surface for me.

Firstly, the local government estimated spend in 2010 will be €8.5 billion, including €4.7 billion current. The total efficiency savings amount to 6 per cent of the total, or 10.9 per cent of current spending. I suspect that a lot of the savings are from initiatives that were planned by local authorities anyway (at least, by the more efficient ones), and some suggestions won't be taken up for various reasons. So, that leaves a relatively modest level of cost savings to be squeezed out, on top of the job losses that have gone on across the local government sector over the last few years. And the suggestions do not resolve the long-standing issue of fixing the broken system for funding local government.

Secondly, the report's terms of reference were linked to the state's tax revenue crisis. However, there is more sophisticated analysis that could have been done about the economic value of local government. Is there a difference in terms of business activity between towns of comparable size that do or do not have a town council? If so, is it good for business? There are reasons to imagine that having some kind of local, elected representation could be good for local businesses. This leads on to the question of why some major towns (like Swords) don't have a town council, whereas for historical reasons, very small towns do. If there is an economic value in having representation, the equal representation of all towns, above a set size, might be a more significant reform to consider. And it could have positive economic outcomes in using local government to foster and support enterprise locally.

Posted in: Economics • Democratic accountability

Tagged with: Bord Snip Nua • local government