MANY LOCAL authorities are struggling to maintain services because their taxation base is too narrow; costs have risen because of benchmarking awards and Government subventions have fallen. In other words, local administration has been brought to its knees by the same combination of stupidity and political cowardice that has beggared national government. The difference is that ministers were warned it would happen more than four years ago.

Early in 2006, while the Celtic Tiger still roared, Indecon produced an expensive report for the Fianna Fáil-led government predicting a growing shortfall in the income of local authorities. It said the tax base had to be broadened. And it proposed the introduction of water charges and rates for second homes and exempted properties. Because of pending elections, the report was shelved. Deficits grew. Last year, a levy on second homes raised about €62 million for local authorities and eased the situation. But water charges are not due to take effect until 2014.

At least eight local authorities are now under acute financial pressure and are struggling to pay for basic services. The situation is most severe in large rural counties with a small commercial rates base. Part of the reason is that motor tax and exchequer funding – the Government’s contribution – have fallen by an average of 25 per cent in two years.

Most politicians would accept that the abolition of rates on homes and farmland in the 1970s was a serious mistake. A new tax on principal residences has now been proposed by Government, following a succession of reports. But there is no talk of a land tax. The Opposition parties are either opposed to a home tax or would divert any revenue raised to the exchequer.

Wilful ignorance and a failure to confront vested interests have created this sorry situation. Politicians should learn from those mistakes. Reform is already under way within local government. The amalgamation and restructuring of 20 city and county councils is expected to lead to a reduction of between 15 and 30 per cent in the number of middle, senior and top local authority managers in the next few years. Towns with populations of under 17,000 may see their urban councils subsumed into larger town and district councils. Those that remain will lose control over rates, planning, roads and housing functions. There will be knock-on effects in terms of political representation. A White Paper has been promised. It should be published.