Mr. Ian Talbot:

I thank the Chairman. It is a great pleasure to be here. I do not propose to read through the submission we supplied yesterday. I hope we can take it as read. I will focus on a few key topics contained in the submission.

Chambers Ireland fully supports the ongoing reform of local government. We compliment those who work in the area on the efforts they have made to change and restructure local government in recent years. There are others would could learn from what has been done in this regard. However, much remains to be done, and all too often we end up relying on businesses - as taxpayers - to cover excessive costs. We see ourselves as being particularly well placed to comment on local government issues as a result of the fact that we have a chamber of commerce in virtually every town throughout the country. This means that we receive almost constant feedback with regard to what is happening on the ground. Local chambers are typically heavily involved with their local authorities in the context of engaging in dialogue and, in most cases, trying to resolve issues.

We are of the view that more needs to be done at local authority level to achieve greater efficiency and to support the business community. At a structural level, mergers and the eradication of duplication of services must continue to be implemented and delivered. The savings achieved in this regard must result in a reduction in costs for the business community. We all know that in order to aid Ireland's recovery, all business costs must be reduced. Business has gone a long way towards reducing its own costs, but local authority charges on businesses tend to take the form of a fixed cost, regardless of their profitability or otherwise. They fall into the category of costs which need to continue to be restructured and reduced in order that Ireland can become more competitive and that we can create more jobs. We must seek to do this, of course, without any reduction in the quality of front-line services, through mechanisms such as back office consolidation, the flattening of hierarchies, the application of shared services best practice and, where appropriate, business process outsourcing.

It is clear that there are many issues which affect town centres. The retail sector is obviously very significant to the job creation market and has been extremely hard hit. The impact of rents and rates as business costs is significant, as is the effect of parking charges. The abolition of town councils and the creation of municipalities is creating concerns across our network. We need to be sure that costs will not be increased in a number of ways, not least as we integrate municipal districts into the wider county areas. There is also concern about perverse incentives, under the funding formula built into the legislation, that could lead to an increase in car parking charges. Our members would generally like to see the provision of some free car parking in town centres in order to encourage people to return to those centres.

On business supports, the local enterprise offices, LEOs, are in the process of being established. These are vital, and we continue to recommend that business representatives and chamber members should be involved in the governance of LEOs. These offices should be exclusively focused on their core remit of supporting start-ups and SMEs with up to ten staff and ensure that there is no replication of services already provided by the private sector. In addition, LEOs should be visible, accessible and functional. Anecdotal evidence to the effect that some of these expectations are not being met is beginning to emerge. LEOs are supposed to be very visible in county council offices but we are hearing stories to the effect that they are going to be hidden at the back of the second floor and will not be an accessible resource. It is early days in the context of the establishment of the LEOs, but there is a need to get on with it and deliver. The evidence to which I refer is anecdotal in nature because the LEOs are at such an early stage of their development.

Chambers Ireland advocated the introduction of a local property tax for many years. We see this tax as providing an opportunity to ensure the effective funding of local authorities in the wake of the steady reduction in the general purpose grant. However, the tax must be spent at local level in order to reduce pressure on businesses. In recent days a debate has been taking place in Cork City Council in respect of an increase in the rates for businesses. We do not think this is the right time to introduce such an increase and it would not be helpful. Such increases become a threat to competitiveness and jobs.

Another issue about which our members are concerned is the treatment of vacant premises for rates purposes. The Local Government Bill contains a provision to standardise the rates rebate to 50% on vacant premises. This could be harmful to business which are trying to downsize, lease out some of their properties or just survive. At present, there is much more flexibility in the system. A possible solution would be the introduction of a stepped process whereby a rebate of 90% would be paid in the first period for which a property is vacant. This rebate would then be paid on a decreasing basis over time in order to give owners the opportunity to re-let their premises or whatever.

Procurement is a vital area and one of great concern to small businesses in particular. Tendering for contracts from local authorities is really important for such businesses throughout the country. The State and local authorities must be responsible buyers. We fully accept the need to drive cost savings for the State from procurement, etc., but we must ensure that we also actively support local economies through procurement policies while remaining aware that the cheapest option will not necessarily be the appropriate, value-for-money option that will supply the best outcome. It is extremely important that local authorities use procurement professionals who will provide feedback in respect of the tendering process both pre- and post-decision. Local authorities must also adopt appropriate qualification criteria. In other words, the qualification criteria relating to a tender must relevant to what is being purchased. A three-year trading history and profits running into the multi-millions are not necessarily relevant when it comes to purchasing a few glasses to go on a table.

The final issue which arises - it arose again in recent days for a number of our members - is that of revaluation. I refer here to the underlying valuation of a premises and not the annual rate that is struck. There are huge concerns in this regard. In light of the problems with the Valuation Act 2001, the Valuation (Amendment) Bill 2012 was introduced. However, the latter stalled very early in the legislative process and we have not really had an opportunity to influence the debate on it. Many businesses are just as concerned about the underlying rateable valuation as they are about the annual rate that is struck. We are also of the view that there is a necessity for some key amendments in respect of the definition relating to a material change of circumstances. We are of the view that this definition should include economic viability because at present it tends to be based on, for example, the impact of a wall being built near one's premises. The latter is a material change of circumstances but we would like some economic criteria taken into account in this regard. Another matter in respect of which amendment will be required is that relating to tenants only being responsible for the payment of rates from the date of occupation. In addition, a hardship clause might be introduced.

The SME sector is extremely important to the regeneration of growth and jobs in the economy. SMEs and local authorities form a vital combination when they work together. It is very important for our members that local government will be set up in the correct way for the future.