Report of the Local Government Efficiency Review Group

13.1.17 There are a series of other exceptions in the current system of commercial
rates system that the Group considers need to be reviewed on the grounds
of equity and base broadening. These arise mainly in the accommodation
and catering sectors. The commercial rates system should also apply to offshore
structures, such as windfarms and power stations (the latter would
require a change in law to give local authorities rating jurisdiction in these
areas). Third-level institutions and professional institutions should be partly
rated, as should community halls where a significant amount of commercial
activity operates from them.
13.1.18 The effect of these proposals to broaden the commercial rates base was
estimated by the Commission on Taxation to be worth between €77-€87
million in income to local authorities per year. The net savings to the
Exchequer would be far less than this to the extent that other sectors of the
state would be paying these rates to local authorities. It is estimated that
€50 million of the €77-87 million relates to state properties that would be
liable for commercial rates.
13.2 Agency Services
13.2.1 The Group considers that where a local authority provides a service on
behalf of another public body, this should be done on a cost recovery basis,
provided that services are being delivered in an efficient manner.
13.2.2 Local authorities are not fully compensated for the overheads associated
with the requirement to process Higher Education Grants on behalf of the
Department of Education and Skills under the Local Authorities (Higher
Education Grants) Acts 1968-92. Four different student grant schemes
exist, one of which, the Higher Education Grants Scheme, is processed by
local authorities. This involves the processing of grants to some 27,600
students per year, amounting to in the region of €160 million in grants.
Local authorities receive an allocation from the Department of Education
and Skills for Higher Education Grants, but this allocation relates solely to
recoupment of grant payments made to eligible applicants – no allocation is
made by the Department to local authorities for the overheads associated
with carrying out this work. Some 90 local authority staff are involved in this
area, and in 2010 the budgeted operating costs of processing Higher
Education Grants ran to almost €3 million.
13.2.3 The current moratorium on local government staffing means that the
number of staff available for this function is likely to be constrained, while
CAO trends indicate that the number of applications for Higher Education
Grants is increasing and is forecast to increase into the future. This poses
particular problems as demand for this service tends to peak at certain
points in the year.
13.2.4 The Student Support Bill 2008 contains provisions to consolidate the four
existing schemes into a unified grant scheme, as well as allowing the
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