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Council chief says local authority facing ‘very large losses’, proposes 15% LPT hike

Joan Martin
Louth County Council Chief Executive Joan Martin speaking at the Drogheda Borough Mayoral Awards. Photo Credit: Kathy Gilroy-Barry.

Louth County Council face “very large” losses in 2020 with substantial declines in their income from commercial rates and pay parking due to the Covid-19 pandemic leaving the local authority with a huge gap to fill in their ongoing operating budget.

Chief Executive Joan Martin outlined the state-of-play to assembled councillors at the July monthly meeting of Louth County Council in which she said that the impact of Covid-19 lockdown had a significant impact on the council’s coffers.

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She told councillors she will once again propose raising the Local Property Tax by 15% this year in a bid to increase revenue. This is the third straight year that the Chief Executive has proposed a 15% increase in LPT – but that has been shot down by councillors in both 2018 and 2019.

“A 15% increase will give us €1.4 million,” she told the meeting. “That would give us sufficient funding to continue to provide services at the level we are now.”

In March, the Department of Housing, Planning and Local Government announced a rates deferral period of three months for businesses that were closed due to the Covid-19 induced lockdown. The government said that short-term cash flow support would be made available to local authorities to assist with subsequent cash flow problems that may arise.

However, Martin confirmed no money had been forthcoming as of yet.

“That money has not been paid by any Department to councils. Negotiations on that are still ongoing”, she told the meeting, held in St Gerard’s Hall rather than County Hall to accommodate social distancing.

“I’d be optimistic that we get the bulk of that money [but] we are facing very large potential losses on rates across the rest of the year.” The Chief Executive added that newspaper reports suggested the Minister was considering a nine-month rates holiday, as opposed to the originally planned three-month period.

Some councillors, including Fianna Fáil’s James Byrne, have called on the rates deferral to be extended as long as 12-months.

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Martin told the meeting that despite most shops and businesses being open once again post-lockdown, the local authority have not seen the kind of boost to their income they would have expected from pay parking – suggesting retail is not yet back to pre-lockdown health.

“We have clearly accumulated very large losses, over the months – April, May, June. Even with the reopening of shops, I’m not sure we’re seeing the kind of uplift in income form pay parking that we would have hoped.”

She said it was “really, really difficult” to see where the council would be at the end of the year, in terms of its finances. “I don’t know what the full loss will be.”

Martin suggested that the council “wait and see” what their outturn is by the year’s end, preferably to take that approach to making cuts to services. She said that surplus’ from the previous two years Annual Financial Statements will give the council “about a million.”

“I’m hoping that will help us alleviate the losses,” she added.

It was suggested that savings could be made by not filling staff vacancies currently available at Louth County Council. “In Northern Ireland, councils are beginning to layoff staff. That’s how they’re dealing with it.”

The local authority say they may have to set aside a large amount of 2021 revenue – in the region of €500,000 – to write off losses for this year.

“We’re still trying to operate. The budget will be difficult. There will be difficult decisions.  It’s a wait-and-see scenario. There is no question of Louth being left behind. Finance is top of the agenda.”

Martin said that all 32 Chief Executives from around the country speak on a weekly basis, with finance and health and safety among the primary topics for conversation. “Finance is being worked on nationally.” She also said cited that Minister Darragh O’Brien, himself a former councillor on Fingal County Council, “knows how tight is it” and “fully understands the financial challenge.”

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