00:00 Saturday 08 October 2011  Written by Archon

Bad debts to councils mushroom!

IT'S a great country! From 2007 to 2009, Cork local authorities wrote off commercial bad debts amounting to more than €17 million. Just like that! You owe a fortune one day and the following day councillors decide you owe nothing.

Nationally, rates arrears at the end of 2009 were €211 million, a sum that, if collected, would bring in more than the proposed property tax. A further €152 million is owed in commercial water charges, but there is no certainty any of that loot will ever be handed over!

Indeed, Cork county local authorities have allowed bad debts to mushroom. For instance, between 2007 and 2009, Macroom went from writing-off bad debts of €4,000 to more than €50,000.

Youghal's bad debt write-off soared to a monstrous €500,000 while Cork County Council in 2009 waived a whopping €5 million in bad debts. Cork City Council in the same year turned a blind eye to almost €2 million.

In 2007, Skibbereen wrote-off €118,618. In 2009, it wrote-off €161,644.

The fact is that local authorities are failing to collect monies that they have a statutory obligation to levy, amounts that are set by the elected members of the local authority in the council's annual budget. Why?

According to Jerry Buttimer TD, who winkled out the scandalous information from his boss, Local Government Minister Phil Hogan, the €17 million in bad debts that Cork local authorities 'wrote-off' was simply an indication of how 'hard pressed' businesses were.

Full of holes

It's an explanation so full of holes that it's almost unbelievable. Buttimer suggested that another method was needed to fund local government. And, he has the solution: Fine Gael's water and property charges for every citizen in the land. In other words, if business types won't pay, don't pursue them. Instead screw the householder!

Inexplicably, Buttimer, Hogan and Fine Gael did not address properly the issue of why local authorities cannot recoup the huge arrears and the huge debts. They didn't explain the speed of local authorities in nullifying the repayment of vast sums of unpaid taxes and charges, nor why politicians made it so easy for the commercial Roger Dodgers to escape their civic responsibilities?

All of which raises this question: when Fine Gael introduces its punitive water and property taxes next year, why should a householder pay up when he/she knows that the shop, business, or development down the road pays nothing, and that there is no penalty for non-compliance?

Astute commentator Peter Brennan of EPS Consulting points out that if 20% of what is currently owed to local authorities in commercial rates were collected there would be no need for property or water charges.

He argues that if local authorities were rationalised, as the McCarthy Report recommended, a centralised Debt Management Office for high volume local authority collections would have an enhanced success in extracting money from the business element of society.

Of course, Buttimer and Minister Hogan have many other questions to answer.

Naming and shaming

They include the following. If councils are so manifestly unsuccessful with the debt collection system they're using, why not try another? Naming and shaming, for example?

When is a debt considered 'bad', and why don't the politicos inform the public if some large debts are uncollectable? Is there a ballpark figure above a certain amount that constitutes a bad debt, and in what circumstances can councillors say that a reasonable effort has been made to recover the debt?

Do councils take into the consideration the possibility that the debtor may have assets that can be recovered in lieu of the debt?

How often does a council discuss the matter of bad debts and are detailed reports regularly provided to councillors regarding bad debts? If so, do the reports inform councillors of the length of time debts have been outstanding, and the attempts (if any) that have been made to recover the money?

Facing extinction

And here's the rub: In light of the fact that many town councils are facing extinction when the McCarthy reform of local government is implemented, the politicos' apparent indifference to mounting bad debts focuses attention on their credibility when making cuts in essential local services.

What's more, if a local authority fails to carry out its primary function, that of collecting commercial rates, then what purpose does it serve?

Corpo comedy

In the meantime, political comedy shows continue at the Corpo where the Cork City manager announced an emergency budget to cut council spending by €3.7 million before the end of the year.

Housing, roads, recreation, amenity and environment will be affected. The Corpo lads responded with a fine example of their irrepressible 'what-me-worry?' humour.

The €100,000 a year Fianna Fáil Lord Mayor, Terry Shannon, declared he was still going ahead with tarting up his office at a cost to the city of quarter of a million euros, and that he intended commissioning 76 portraits of former first citizens for a special 'Lord Mayors Day' at City Hall!

At the same time, councillors claimed €50,000 for having attended far-flung conferences in the first six months of this year (Lord Mayor Shannon has already notched up a bill that's close on €10,000).

And, of course, there's the €2.3 million hanging garden project for the Mardyke. In a despairing effort, Sinn Fein asked councillors to 'cop themselves on,' but the party might as well have been whistling down the wind.

Secret society

Excluding Kenny, Gilmore and Shatter, government ministers lost their right to use Dublin bus lanes when they gave up their state cars and garda drivers. But, in a recent secret deal, ministers in civilian cars and with civilian drivers were granted a special exemption to use bus lanes. The decision was never announced to the public.

The lucky lads have joined the list of slightly less important users of the bus lanes, such as fire brigade vehicles, ambulances and garda cars.

The body that deals with requests for improved services (perks), such as changes in the Dublin city centre traffic to make it easier for ministers to get to the Dail, have another surprise up their sleeve - the creation of an Oireachtas wine label.

As the well-known politico-cum-poet revealed in the Dáil bar, 'let us have wine and laughter/speeches and cant the day after!' Doubles all round.

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