23 July - Cutting cost of local government by 10% of their current €5 billion annual budget will hugely improve an inefficient system, according to Dublin Chamber of Commerce. This would equate to approximately €170 million in savings for Dublin’s four local authorities.

If implemented, the Local Government Efficiency Review Group report could result in over €500 million in savings. Dublin Chamber is calling for their swift implementation and for the savings to be passed onto businesses and taxpayers. 

Dublin Chamber President, Peter Brennan, said: “This report clearly indicates there is considerable scope for cost savings in local authorities.  The four Dublin city and council managers need to ensure they pass on these cost savings to businesses throughout Dublin when they are making their proposals for local commercial rates for 2011. Over 5,000 businesses in Dublin City pay between €10,000 and €1 m each year in commercial rates for what this report has shown is an inefficient system.”

The Department of Environment, Heritage and Local Government is currently drafting a white paper on Local Government, which will be looking at a number of issues including the number and funding of local authorities, which was outside of the Local Government Efficiency Review Group’s remit.  Dublin Chamber has pointed out that there are clearly more significant savings that could also be achieved as part of structural reform to the Local Government system.

Gina Quin, Dublin Chamber chief executive, said: “Business has an inherent interest in the efficient operation of local government as it is by far the largest single contributor to local authority budgets.  In Dublin alone, the combined current expenditure of the four local authorities is almost €1.7 billion, of which some 37%, or €625 million, is funded by commercial rates. This is well above the national average of 27%.

“The sheer scale of potential savings identified by the Local Government Efficiency Review Group highlight just how bloated our Local Government system is.  For example, the report recommends a much needed independent review of the number of senior managers in Dublin City which is currently 48, and for this number to be reduced by at least 15%. However, it is not only the size of the authorities but the number of them.”

There are currently 34 city and county councils, which break down into 114 local authorities.  In addition to these local authorities, there are another 93 local and regional bodies (10 regional authorities/assemblies, 29 motor tax offices and 54 other local bodies.) “Obviously significant gains could be realised by merging the functions of a number of these bodies and reducing the overall number of local authorities,” said Ms Quin.

The Local Government Efficiency Review Group’s report follows yesterday’s Annual Competitiveness Report by the National Competitiveness Council, which found that public and administered services in Ireland were negatively impacting on cost competitiveness.

Dublin Chamber called for the establishment of a Local Government efficiency review as part of their pre-Budget 2010 Submission. 

Footnotes:
Dublin Chamber’s Supplementary Submission to the Local Government Efficiency Review Group, which had research support from EPS Consulting, is available here: http://www.dublinchamber.ie/Uploads/Submission%20LA%20Efficiency%20Review%20Group.pdf

Dublin Chamber statement calling for the group in advance of Budget 2010: http://www.dublinchamber.ie/press_release.asp?article=1200