THE power of local authorities to increase the level of motor tax in their areas as proposed by the previous government is to be revoked by the new administration in its first Budget next November.
Local authorities will be permitted to retain only a small proportion of motor tax revenue yet to be decided, to cover the cost of maintaining and improving county and regional roads. The previous government had envisaged that they would retain 80 per cent.
After just a week in office as Minister for the Environment Mr Dempsey told a press briefing yesterday that he had already given instructions to set in train the necessary changes in legislation on local government funding.
The existing arrangements would continue in operation this year, he said. But the provision allowing local authorities to vary the level of motor tax by 3 to 6 per cent a year would be revoked, with effect from 1998 onwards. "Basically, the message to local authorities is that they won't have in the new financing arrangements the right to vary motor taxation," Mr Dempsey said. However, he denied local authorities would be short of funds.
"The financial arrangements we re putting in place will ensure that there will be no loss whatsoever," he said. "In fact, they will get some increases next year in general grant allocations from the local government fund."
The Minister explained that the bulk of local authority income would come from a "certain percentage" yet to be fixed of Exchequer revenue from either income tax or VAT. But he denied that this would reduce the level of local discretion.
Block grants would, be apportioned in line with a very strong 'value-for- money' audit system" which he intended to put in place. This would benefit local authorities which performed well.
Mr Dempsey said he intended to introduce "performance indicators", which would allow members of the public to compare how well their local authority was performing in relation to others. Inefficient local authorities would "lose out".
The Minister emphasised that he had "no proposals for service charges" and that he would not be re-examining the issue of water charges, which were abolished by the previous government.
