Housing minister yet to receive submission on Cork city boundary payment

LOCAL Government Minister Darragh O’Brien has said he had yet to receive a submission from Cork City Council about its claim that an annual payment of more than €15m it makes to Cork County Council following the boundary extension of the urban area in 2019 is “totally unsustainable”.

Speaking in Cork on Friday, Mr O’Brien told reporters that he had had a virtual meeting with the executive teams of both councils on Thursday and the matter of the boundary extension payment, which was set at €13m plus an index linked inflation premium, had not been raised with him.

The queries were prompted by comments during Wednesday’s annual budget meeting of Cork City Council by chief executive Ann Doherty who said the fact that the payment was index linked to inflation and there had been a “blip” in the inflation rate due to covid and the war in Ukraine made it “unsustainable”.

In his remarks on Friday, Mr O’Brien said that the agreement over the boundary extensions payment had been reached before he was appointed minister.

“If I receive a submission from Cork City Council, I will assess it,” he said, pointing out that he had regular meetings with the executive teams of the country’s local authorities.

Ms O’Doherty said the council was in discussions with the minister about the issue during her address at Wednesday’s meeting.

“With the significant inflation rate increases, predominately arising from covid-19 pandemic and the Ukrainian conflict, the annual payment will be increased by €2.4m in 2024,” she said. This is not a sustainable cost for Cork City Council.

“We are in discussions with the department in relation to this cost increase but no agreement or commitment to fund this additional cost has been reached to date.

“For the 2024 budget, we are proposing that this additional cost should be capitalised until a funding stream becomes available,” she said.

The payment was described as the “elephant in the room” during the subsequent debate by councillor Shane O’Callaghan.

 “This is in addition to the €13m we already pay Cork County Council under the boundary extension agreement every year and that €2.4m could go up even further for next year and the year after depending on inflation,” said Mr O’Callaghan. “Such a situation is totally unsustainable.”

The councillor pointed to the provision of the legislation which underpinned the transfer of property to Cork City Council in 2019 and the compensation due to the county council as a result.

“Under section 24 of the 2019 act whereby the minister can give a direction regarding any dispute between Cork City Council and Cork County Council over the amount of the annual payment to Cork County Council,” he said, asking that Mr O’Brien intervene to resolve this issue by increasing the amount of the national baseline funding to Cork City Council from the current €1.5m because that’s not enough.

“I’m calling on the minister to do that because if does not do that quickly, this issue has the potential to spiral out of control,” he said.