Report of the Local Government Efficiency Review Group

for the overdraft, has the potential to yield a modest saving in the region of
€1 million.
11.1.14 For working capital purposes consideration could be given to allocating a
percentage of budgeted expenditure as an overdraft sanction. Currently,
overdrafts are predominantly sanctioned in respect of timing differences in
capital income and expenditure. Local authorities should not make
commitments to advance projects unless they have funding arrangements in
place for the full capital costs before commencement. The total value of
peak overdrafts currently sanctioned is in the region of €500 million.
11.1.15 An approach to overdrafts based on a percentage of adopted budget
expenditure could be considered for the 34 county and city councils as the
primary units of local government. Those requiring more than the agreed
percentage would need to make a formal proposal for a higher overdraft
sanction.
11.1.16 The length of time to get an approval can take up to two months due to the
system of checks and cross references in place. The approval period is
generally for 6 months. The Group considers that this could be increased to
one year and would eliminate repeating the cycle within the Department of
the Environment, Heritage and Local Government and within the banks.
11.1.17 In relation to longer-term borrowing, such borrowing should be appropriate
to the type of asset being financed and the proposed means of servicing the
loan (for example from fees/charges, or from local authority revenues). The
long-term debt of local authorities stood at €4.4 billion at the end of 2007
and increased to €5.0 billion at the end of 2008.
11.1.18 Funding from the Housing Finance Agency is available for housing and nonhousing
purposes. Costs are around EURIBOR plus 0.60% for 12/20 year
money, which is very favourable when compared to loans from the banking
sector. Where funding cannot be obtained from the Housing Finance
Agency, local authorities are compelled to go to the open market. In the
current market, the margins being applied are rising and this has
implications for longer-term borrowings that may span up to 20 years.
11.2 Online Services
11.2.1 There has been substantial investment in e-local government in the last
number of years with the use of online technology to improve efficiency,
quality and effectiveness in service delivery. Information technologies are
recognised as an important means of providing easier access to services
supplying information on the wide range of local authority activities and
speeding up service delivery.
11.2.2 Local authority websites are updated on a regular basis with news,
information, publications, along with tender and job opportunities. All
application forms are also generally available on local authority websites.
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