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LOCAL AUTHORITY BUDGETS

LOCAL AUTHORITY BUDGETS. Peter Duggan, FCA Head of Finance Mayo County Council. Local Authority Budgets. Introduction Budgetary Process Budget – Key Components. INTRODUCTION. INTRODUCTION. Significant changes in Local Authorities Introduction of Irish Water

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LOCAL AUTHORITY BUDGETS

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  1. LOCAL AUTHORITY BUDGETS Peter Duggan, FCA Head of Finance Mayo County Council

  2. Local Authority Budgets • Introduction • Budgetary Process • Budget – Key Components

  3. INTRODUCTION

  4. INTRODUCTION Significant changes in Local Authorities • Introduction of Irish Water - Transition of Functions from 1 Jan 2014 - Provision of Service under an SLA agreement with Irish water • Enterprise - Roll out of Local Enterprise Offices (LEO’s) - Replaces County Enterprise Boards and will operate under the aegis of the Local Authority in collaboration with Enterprise Ireland

  5. INTRODUCTION • Alignment - Set-up of Local Community Development Committees (LCDC’s) - LCDC’s take over the role of the County Development Boards • Municipalities - Town Councils have been dissolved - Introduction of Municipal Districts • Specific Changes in Finance - New Budgetary Process - Introduction of Local Property Tax - Cessation of NPPR

  6. INTRODUCTION • Operations and activities of Local Authorities can be divided into two primary accounts • Revenue Account Covers the day-to day activities of the Council i.e. the provision of Local Services • Capital Account Covers the Construction/provision of Infrastructure (Assets) within the County • Obligation to keep both accounts “in Balance”

  7. BUDGETARTY PROCESS

  8. Budgetary Process • Legislative Basis • Key Issues • Key Tasks • Timelines

  9. Legislative basis • Local Government Act 2001 (as amended by S 58 Local Government Reform Act 2014) • S102 Local Authority Budget • S103 Local Authority Budget Meeting • Local Government (Financial & Audit Procedures) Regulations 2014 • Informed by EU requirements that, inter alia, main parameters of National Budget to be published by 15 October each year

  10. Respective Roles & Functions • Corporate policy group involved at outset and assists executive in setting parameters, identification of issues and agreeing approaches • Chief Executive & Head of Finance to lead at executive level the calculations of the draft Income & Expenditure budgets noting parameters, issues, approaches etc.

  11. Respective Roles & Functions • Authorities may have interim workshops with full Council to inform of approaches, obtain feedback and refine emerging issues • Municipal Districts – Chief Executive to prepare draft budgetary plan regarding General Municipal Allocation (GMA) for municipal district, for consideration and adoption, with or without amendment

  12. Respective Roles & Functions • Chief Executive takes account of these draft budgetary plans when completing overall, draft local authority budget for the County • Statutory Budget meeting of the members of the County Council considers and adopts with or without amendment final adopted Revenue Budget for the following year

  13. Key Issues • Local Property Tax/General Purposes Grant • Local Property Tax Variation (if applicable) • Income from Goods & Services • Income from Grants & Subsidies • Commercial Rates • Miscellaneous Income

  14. Key Issues • Determination of Fixed & Non-discretionary costs • Pensions, Wages & Salaries • Loan Charges • Contractual & Statutory Commitments • Fixed & semi-fixed overheads

  15. Key Issues • Calculation of Non-Fixed or Discretionary expenditure • Will include strategic expenditure areas that while classified as discretionary are discretionary in scale/amount only • General Municipal Allocation, determined from available remaining income

  16. Key tasks • Local Property Tax variation consideration (S20 Finance (Local Property Tax) Act 2012 • L.A. may as reserved function resolve to vary LPT by +/- 15% from 2015 • L.A. must have regard to current financial position, likely Income & Expenditure overall, impact of any decision on the full range of stakeholders and report on submissions from the public.

  17. Key tasks • General Municipal Allocation (GMA) • Pool of discretionary funding made available to municipal district members for allocation in draft budgetary plan • Level calculated by Chief Executive following determination of overall fixed, semi-fixed and non-discretionary costs & available income

  18. Key tasks • Completion of budgetary report for L.A. to DECLG • Required for EU reporting requirements • Sets out preliminary estimate of Income & Expenditure for both Revenue & Capital for coming year • To be submitted by 30th September • Further details pending

  19. Timelines • July/Aug (Indicative) CPG meetings & initial workshops to agree parameters, identify issues, and to consider implications of range of options on LPT, Rates & GMA taking into account current financial position • July (Indicative) Commencement of public consultation process on LPT variation option

  20. Timelines • October - Chief Executive to allocate agreed GMA between the Municipal Districts • October - M.D.’s to consider and adopt individual draft budgetary plans meetings to take place between 1st and 10th October 2014 • October/November - Chief Executive to formulate final Draft Revenue Budget for County taking account of M.D. draft plans • Statutory Budget meeting must take place between 1st & 24th November • 14 day adjournment allowed

  21. BUDGET KEY COMPONENTS

  22. Revenue Account – Expenditure & Funding

  23. Revenue Account - Funding • Budget 2015 will include for the first time Income from Local Property Tax (LPT) • This funding source is replacing GPG allocation. • Some authorities will continue to receive a GPG allocation where LPT Income in 2015 is less than their GPG allocation for 2014.

  24. Revenue Account - Funding

  25. Grants/Subsidies • Grants received from various Government Departments and Bodies - Dept of Environment, Community & Local Government - National Roads Authority - Department of Transport - Department of Education & Skills • Grants are primarily non-discretionary and must be spent in the area for which they are allocated • The General Purposes Grant is the only Non-Discretionary grant that Local Authorities receive

  26. Grants/Subsidies

  27. General Purpose Grant • Also known as Local Government Fund Allocation • Grant is Discretionary and primarily used to fund the day-to-day activities of the Local Authority • Each Local Authority receives an annual allocation which is paid quarterly • Grant is paid by the DOECLG out of the Local Government Fund

  28. General Purpose Grant

  29. Goods/Services • Local Authorities charges for the provision of certain services • Rates charged can be set by the Local Authority • Some Charges are set by Minister/statute (e.g. Planning Fees, dog licenses) • Examples of the services for which Local Authorities charge include: - Housing Rents - Landfill Charges - Housing Loans - Planning Fees - Parking Fines/charges - Fire Charges - Library Fees - Swimming Pool Fees

  30. Goods/Services

  31. Expenditure • Divided into eight Divisions (A-H): A. Housing & Building B. Road Transportation & Safety C. Water Services D. Development Management E. Environmental Services F. Recreation & Amenity G. Agriculture, Education, Health & Welfare H. Miscellaneous Services

  32. Expenditure

  33. Thank You Questions ? Peter Duggan Head of Finance Mayo County Council

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