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Featured Article
| Local custom |
With money leaving local economies across Ireland to service debt and significant drops in local authority revenues, towns such as Dundalk, Ennis and Kilkenny are investigating the possibility of bringing in electronic currencies to keep money circulating locally, as Richard Douthwaite reveals.
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Official magazine of Easca  |
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Local custom |
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Monday, 23 August 2010 |
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Page 1 of 4
With money leaving local economies across Ireland to service debt and
significant drops in local authority revenues, towns such as Dundalk,
Ennis and Kilkenny are investigating the possibility of bringing in
electronic currencies to keep money circulating locally, as Richard Douthwaite reveals.
Alabama's main economic engine, Jefferson County, has laid off 1,000 public employees and closed courts, a prison and some sheriff's offices for lack of funds. In Phoenix, Arizona, hundreds of police and firemen have been dismissed and old people's day centres, libraries and sports complexes closed. Tulsa, Philadelphia, Rhode Island and Michigan are among dozens of American communities which have taken, or threatened, similar steps.
The financial pressures on Irish local authorities are not quite so extreme but painful cuts are having to be made here too and, nationwide, 5,000 council workers have already lost their jobs. In County Louth, for example, 130 people, a tenth of the workforce, have gone.
Bernie Woods, Louth's head of finance, says that those who have left fall into two categories. One consists of older, experienced people who either retired or opted for early retirement to secure their pensions. “A lot of knowledge has been lost,” she says. The other group was mostly made up of recent entrants – bright, enthusiastic young people with new ideas - whose short-term project-based contracts were not renewed. Both types of loss are bound to affect the council's ability to perform.
Most of the 150 or so people who have left Galway City Council's employ would fit into those categories and the same is probably true for every council in the country. Of the 80 or so people who no longer work for Kilkenny County Council, several had 25-30 years experience in the planning and engineering departments. Clare County Council has reduced its 2010 wages bill by €2.3 million, or about 5% less than its 2008 level, by not filling 115 permanent and several seasonal posts, and by cutting overtime.
Part of the reason for the staff cuts is that the €870 million general purpose grant which central government will share out this year among all the country's local authorities is 13% below its 2008 level. This grant comes from road tax with a central government top-up. It is now slightly less than the councils received in 2006 and is money which can be spent at their discretion. In a normal year it would make up about a fifth of the income that a typical council had available for current, as opposed to capital, spending.
The Department of the Environment points out that about half the €130 million cut in this grant is offset by the councils' new source of income, the €200 a year charge on second homes. However, all the other sources of council income are going to be down this year too by amounts which will only be known with certainty in December. Even the total amount of the other central government grants and subsidies, which typically provide about 23% of a council's income, is still unknown because the figures for the various programmes, such as the maintenance of national primary roads, environmental services and higher education, have yet to be announced. For example, this year's funding for rural water schemes was to be revealed in the third week of April, after this magazine had gone to press.
Green Party councillors Brain Meaney, Malcolm Noonan and Senator Mark Dearey are all in favour of launching community currencies
In the past, commercial rates have provided about a quarter of a typical council's income but estimating how much they will be this year is a problem because, with firms going out of business or cutting back, there are many more vacant properties. In addition, cash flow difficulties mean that the amounts due are harder to collect. “We're collecting in a very difficult climate. We try to work out flexible payment methods when we can,” says Ger Dollard of Clare County Council. Michelle Robinson of the Office for Local Government management says that the four Dublin local authorities have budgeted to collect 6.9% less in rates this year than last. However, this figure can only be a guess until the money is actually in.
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