The financing of local authorities is the greatest bone of contention among councillors and the people they serve. The present system of financing through the rates support grant is inequitable and has been since 1977. In 1977 the Government decided that local authorities would be funded by means of a rates support grant based on existing valuations. At that time some counties, particularly those along the western seaboard, including my own county of Kerry, had a low valuation base and to this day are financed on the basis of that valuation. The effect of this method of financing local authorities is to make poor countries poorer and rich counties even richer. To give one example of the anomaly there is a commercial ratepayer in the Limerick County Council area paying more in rates than is paid by all the ratepayers in Kerry to Kerry County Council, yet the rates support grant to Limerick County Council is higher than that to Kerry County Council. I am not whingeing about this. I am merely pointing out a grave injustice.
The method of financing is fundamentally unfair and has inhibited many local authorities, particularly along the western seaboard, in developing services for their people as they would wish. In addition, local authorities have ever-increasing revenue costs. In some cases this is because they are obliged by EU directives and regulations to provide levels of service that they simply cannot afford. Local authorities are obliged to put in place landfill sites which are extremely expensive to maintain, and this has become a major issue. In addition there is the question of sewage treatment plants in coastal towns. Kerry is the first county to have a landfill refuse site, which will be costly to maintain. There are sewage treatment plants in virtually every coastal town in the county and the running costs, subsequent to the capital outlay, are a cause of concern. Unless a new method of funding local authorities is devised they will not be able to provide the level of service that people demand and are entitled to.
For the commission that the Minister is setting up to investigate the role of local authorities, the fundamental issue must be the method of financing. I am aware that a request was made to the London Institute of Fiscal Studies to look into the question of financing local authorities. This institute reported back and some county managers advised the Minister that they were in favour of the recommendations in the report whereas others said that they were not. It seems the views of the county managers were based on how their county was doing under the present system.
Some county councils have been rewarded for years of overspending while those that were frugal and kept within budget have suffered as a result. This Minister is farsighted enough to recognise that such a system cannot be allowed to continue. The system is fundamentally unfair and requires a radical overhaul.
Nowhere is the lack of finance more apparent than on our county roads. It is not the fault of the Minister. This has been the case for many years, but the recent spell of bad weather has led to revolutions in many parishes because of the state of county roads. Potholes are commonplace and are such a feature of our landscape that they have become the butt of jokes.
This is not an easy problem to solve, but I congratulate the Minister on making a genuine effort to address it. The application to Europe for permission to use Cohesion and Structural Funds on non-national roads is very welcome. The Minister will have difficulty in getting the application through the European Commission because it wants such moneys expended on national, secondary and primary routes. Nonetheless, the unique importance of county roads to rural communities cannot be overstressed. I am sure Members will agree that people have a fundamental right to decent access roads to their homes. In this respect it is important that the European Commission listens to the pleadings of the Minister so that there can be a great improvement in our county road network in the coming years.
In the context of setting up the commission to examine the role of local authorities, it is important that there is some form of co-ordination and that the role of local authorities is expanded. Increasingly, local authorities are becoming involved in tourism, but there should be a greater co-ordination between statutory agencies. The list of State agencies involved in the development of tourism or job creation is mind boggling. For example, in Kerry County Council, Shannon Development, Údarás na Gaeltachta, Forbairt, the Industrial Development Authority, the County Enterprise Board, the Leader programme, Cork-Kerry Tourism and the county tourism committees are involved in the promotion of tourism and-or job creation. It is becoming more and more apparent that there are too many chiefs and not enough indians and that we are in danger of not being able to see the wood for the trees.
I pity any entrepreneur seeking grant aid to set up a business or industry here. It is difficult to know where to turn and very often one is sent from one organisation to another. When the numerous application forms have been completed many throw their hands in the air in despair and abandon their original plan. There is a need for greater co-ordination and it should begin at local level. There is no reason local authorities who traditionally were involved in the provision of services and infrastructure, should not become more involved in the creation of employment and the promotion of tourism. In Kerry recently the county manager and the county council agreed that a sum of £50,000 would be donated by the local authority to set up a company to market the county for tourism purposes. A sum of £50,000 would also be contributed by the urban authorities and others involved in the tourism sector. Over a three year period the fund will amount to approximately £1.2 million and £400,000 will be spent every year on marketing the county. That type of innovation should be encouraged at central level and there should be greater recognition of the fundamental fact that very often people with local knowledge who are familiar with local requirements are best equipped to promote the region and help to solve the problem of unemployment.
While it is desirable that there should be some central control, it should merely constitute a co-ordinating base and in this respect the need to devolve powers to local authorities becomes apparent. Anybody who believes that centralisation has been beneficial to those living along the west coast or in rural areas is sadly mistaken. The Minister stated yesterday that some 61 per cent of the population now reside in urban areas. Centralisation has failed miserably. It has led to a drift from the land and meant that rural areas are without some of their best people, although some of the best have also remained. New structures must be put in place to enable the bottom-up approach, advocated frequently by the European Commission, to be adopted. Devolution of more powers to local authorities will help to arrest the decline of rural Ireland and in the final analysis while that may not be the panacea for every ill, it is certainly a step in the right direction.
Like a fellow Kerryman, Con Houlihan, I will finish with a fógra. The reintroduction of small sewerage schemes is badly needed and grants for minor roads in tourist areas should be introduced. I ask the Minister of State present, the Minister for the Environment and the Minister of State, Deputy Stagg, to do all they can to bring about improvements on the Ring of Kerry road in the next few years. Otherwise tourist traffic will not be able to travel on it without tremendous congestion.