The Minister for Housing, Local Government and Heritage, Darragh O’Brien, today announced a €75.4 million increase in Local Property Tax (LPT) baseline funding to Local Authorities – bringing the total to €428.4 million in 2024 – following a review of how the money is allocated.
Every local authority receives a minimum (’baseline’) amount of funding from the Local Property Tax, supplemented by funding from the exchequer where a local authority’s LPT income is lower than its baseline. This baseline funding is essential and recognises the essential role played by local authorities, not only in delivering a broad range of services day-to-day, but also in successfully leading the local response to emergency situations; such as the sector’s establishment of Community Call during COVID-19, and more recently the community response to support the Ukrainian crisis.
Minister O’Brien said:
“Local Authorities play an integral role in the delivery of services to our citizens. I am aware of the growing challenges faced by local authorities due to the increase in demand for services and the growing cost of providing these. This significant increase in funding should go a long way towards easing the pressure on the sector.
“Since 2020 I have been committed to a review of the baseline funding of local authorities and I established a working group earlier this year to examine the issue. I am pleased to announce that today’s funding has been guided by the review that has taken place and the recommendations of the working group.”
Kieran O’Donnell, Minister of State for Local Government and Planning, welcomed the completion of the review of Local Property Tax baselines, noting the important work completed by the review group, which included elected local representatives, to inform the final model.
Minister O’Donnell said:
“I would like to thank the Working Group for all their work on assisting our review of how we provide baseline funding. Today’s increase in allocations reflects the importance of the work that local authorities do, which I see for myself as I visit and meet with Councillors across the country.”
Baseline funding and equalisationEvery local authority is entitled to receive a minimum amount of funding from the local retention of LPT - known as baseline funding.
Equalisation is the process that ensures that all LPT allocations are funded up to this baseline. The baseline is made up of a combination of LPT yield and, where necessary, funding from the Exchequer. It is important that all local authorities receive at least this baseline level of funding to help ensure they can deliver adequate levels of service, as there are variances across the country in terms of LPT yield.
A working group, with representation from the local government sector, was set up earlier this year to review the allocation of baseline funding. The work of this group has concluded, with recommendations that baseline funding should be distributed in line with:
However, all 31 local authorities will see their baseline funding increase by a minimum of €1.5 million in 2024.
As well as assisting local authorities to meet the costs of providing essential services, ensuring a minimum increase in baseline funding to each local authority enables a level of flexibility and discretion for each authority to address local resource demands arising from the delivery of priority government initiatives.