Willie Penrose (Longford-Westmeath, Labour)

I thank the Deputy for raising this important matter for debate, which I am taking on behalf of the Minister.

Rates income is a very important contribution to the cost of services provided by local authorities such as roads, water, public lighting, development control, parks and open spaces. The continued provision of these services is essential to creating and maintaining the local environment in which business can operate and prosper. Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The levying and collection of rates are matters for each individual local authority. The annual rate on valuation which is applied to the valuation of each property, determined by the Valuation Office, to obtain the amount payable in rates is decided by the elected members of each local authority in the annual budget, and its determination is a reserved function of a local authority.

The factors that influence the decision on the annual rate on valuation include the level of services to be provided by the local authority and the income available to fund these services. Therefore, elected members adopt the annual rate on valuation they consider necessary to provide the range of services for the communities, including businesses, in their area. In this regard, all rates collected locally are spent exclusively on providing services within that area. This is local democracy in action.

The Government is acutely aware of the pressures on small and medium-sized businesses and the challenging economic environment in which many property and business owners are operating at the moment. In this context, the Government is focused on reducing the costs of doing business to support competitiveness and employment in the economy and to protect the interests of communities. Local authorities have responded positively to requests to exercise restraint in setting commercial rates. Annual rates on valuation have been reduced by an average of 0.6% in 2010 and by a similar level in 2011. The Minister for the Environment, Community and Local Governmentwill continue to keep all matters relating to rates under regular consideration. However, I have no immediate plans to reform the rating system.

That said, the Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State. This will produce more consistent and up-to-date valuations for rating purposes and will assist in making the rating system fairer and more equitable for ratepayers.

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