Mr. Reg McCabe:

I thank the Chairman for the kind invitation to address the joint committee. IBEC's focus is on the recently introduced Local Government Bill and the wider issue of local government reform.

With regard to the Bill, it is important to emphasise that it is not all about rates. From IBEC's point of view, as an organisation and on behalf of its member companies, business is all about costs, competitiveness and the potential to expand employment and generate profits. Commercial rates are a very significant cost for many companies; hence we focus on them. There is a headline figure of €1.6 billion paid by the business sector to local government, which figure comprises commercial rates and water charges.

IBEC welcomes the Bill's provisions which are well intended. We believe the reforms included are quite significant and will have an impact, particularly the audit functions. The Bill will create a more regionally based audit function and allow stakeholders to participate in the process, including businesses. We are, however, a little concerned about another proposal. I know representatives of the municipalities attended this morning, but we welcome the proposal to eliminate town councils, thus generating significant savings. On the other side, the town council network will be replaced by a network of municipal districts. We understand there will be three or four municipal districts per constituency. That means that the number of municipal districts will exceed the current number of town councils. Our difficulty is with the unknown quantity of the measure. We simply do not know what is the level of costs. We know that there is a saving associated with the elimination of town councils, but we do not know the level of costs or additional charges associated with municipal districts. Therefore, we seek more information on what the Minister intends to achieve. Of course, he will say the intention is to reduce costs, but the devil is in the detail. As funders of the system, we have not seen the details and are quite anxious to do so.

I will outline another point made in IBEC's submission. The standardisation of commercial rates between town and county councils will, in many cases, lead to an upward adjustment. My colleague, Ms Caulfield, will talk about this matter. The increase will be significant; it will be between 15% and 20%. Typically, a retailer in a place such as Dungarvan will find over a period and for no particular reason that his or her baseline rates bill has increased by between 15% and 20%. That increase will be connected to jurisdiction, as opposed to a drawdown of services.

The Government has talked about reducing the cost of local government, efficiencies and so forth, but there is another measure in the Bill that will increase business costs. I refer to the proposal to standardise the refund of rates levied on vacant buildings. Unfortunately, there are a lot of vacant commercial buildings around the country for all the wrong reasons. Standardisation, therefore, is a significant issue. As the Chairman will know, the current rebate on rates on vacant buildings is 100% for county councils which, in my view, is generous, and 50% for city councils, but that is for historic reasons. Of course, the Minister has proposed to standardise a 50% rebate for companies which will result in a very significant increase in costs without a commensurate increase in the level of service provided by local government.

As I do not want to take up too much time, I will summarise. IBEC welcomes many of the provisions included in the Bill. It is a reforming Bill that will have an impact. We welcome, in particular, the elimination of town councils and the new provisions in respect of a local government audit, transparency and accountability. We are, however, concerned about who will foot the bill for many of the proposed changes to the structure of local government.