Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity to contribute to the debate. I thank my colleagues for putting the motion before the House because it is an issue that has exercised the minds of many throughout the country and one we hear in every local authority every day of the week. This has to be placed in the context of a jobs initiative. We have had various jobs initiatives during the course of the year, although a specific jobs target was never attached to them. The focus of the Government now needs to be on reducing the number of unemployed given that many of the adjustments to the Government's finances have happened at the national level. It is important that everything the Government can do to get out of people's way in regard to creating and maintaining jobs at local level is done through the Oireachtas and down through the local authority level with immediate effect.

With regard to the motion, everybody accepts the importance of small and medium size businesses in the current challenging economic environment. There is a suggestion we might move on to self-assessment of valuation and also to outsourcing valuation work, as appropriate, in regard to the proposed new legislation, to which I will return later.

The main issues have been highlighted by my colleagues. The motion states: "that the current system makes no allowance for ability to pay or changed economic circumstances and that the valuation system and charges setting mechanisms are archaic and complex". Most people would assume that the rateable valuation would be in some way connected to the value of the property, and that is where it originally began. However, if anybody was to take a constitutional challenge in regard to specific provisions at this stage, I would be surprised if they did not succeed. It would be a bit like the situation of years past, when household valuations and rates on land were calculated based on the situation in the previous century, which had just carried on. Equally, I do not believe there is a satisfactory current constitutional basis.

There was a time when people thought rates were a small contribution that businesses made towards running the local authority. Now, in many situations, the rates bill from the local authority can be higher than the rent bill charged in respect of the building by a landlord to a tenant, which was never envisaged. It has developed in that way owing to the valuations of property having reduced in an area. I think of a situation where a town or street may have been bypassed, where a new road has reduced business on a busy high street or where new shops have drawn business out of a town centre location. While all of this means the valuation of the premises, the level of business, the turnover, the number of customers and the number of staff employed have dramatically reduced, this is not reflected in the current valuation legislation.

The current legislation is fundamentally flawed. I would recommend to a number of the employer organisations and small business organisations to consider taking a test case immediately to have the constitutionality of this matter tested, which might bring an immediate response.

If the courts ruled in a practical common-sense manner that some of this is no longer tenable, it might bring an immediate response and lead to us discussing the introduction of good legislation at that stage.

It is also important to note that the Local Government Efficiency Review Group has identified savings which I support and I will list a specific number of those that should be implemented. The group has called on the Government to immediately begin the process of substantial commercial valuation reduction in each local authority area in the country and, where necessary, to introduce a refund scheme for small businesses. It also calls on the Government to delete the subsequent occupier clause and to apply that retrospectively. I will return to those points.

I will turn to some of the difficult issues people might say we on the Opposition side are slow to grasp. I spoke about this in the last Dáil when I was chairman of the environment committee of which the Minister, Deputy Hogan, was a member and on which we worked well together. The annual report of An Bord Pleanála contains a summary, county by county or corporation by corporation, of the number of appeals and the different categories of appeal. From looking at its annual report year in year out I thought there were about 32 planning authorities when it listed all the counties. On pursuing the representatives of An Bord Pleanála at a meeting of that committee, I learned there were more than 70 planning authorities. It is daft to have that number of them. The powers of those authorities should be removed immediately. Such authorities account for offices, structures, planners and an administration system being in place. Counties like my county of Laois has one county council; it does not have a borough council or town council. That local authority is the adequate planning authority for the county. Neighbouring counties that are not dramatically different in size have two or three planning authorities and there is no case for that being the position. The idea of local town councils or borough councils, or urban councils as they used to be, having powers to issue planning permission is not only inefficient from a local authority point of view, it is bad government and bad planning that some of these smaller planning authorities continue to exist. Because of the limited number of cases with which they deal, it is not possible that planning officers and administrative staff could have the breadth of experience to deal with complex planning issues that may come their way from time to time. When we examined this area it transpired that some local planning authorities had dealt with 15, 20 or 30 planning cases during the course of a year none of which may have been appealed to An Bord Pleanála. To have a planning authority that did not have a case appealed to An Bord Pleanála in the course of a year or two is an example of how small and insignificant such authorities are.

The same principle should apply to housing authorities. I stand by the county structure we have in place and support the move in respect of Tipperary North and Tipperary South, although some people might not agree with me on that. Very few people outside local authorities other than the people in County Tipperary are familiar with Tipperary North Riding and Tipperary South Riding. Most people think Tipperary comes under one county structure and everybody would agree that there should be one local authority there.

A number of what were urban councils are housing authorities in their own right and there can be competing authorities. There can be two or three towns in a county that have a housing authority and the county council is also a housing authority. That is daft and that should be ended. The savings and efficiencies that would ensue from that could help to reduce the burden on businesses. It is an unnecessary bureaucracy and it was invented before the advent of the motor car when people gravitated to the local town and the concept of travelling to a town that was 30 or 40 miles away was not on people's radar. We need to be examine these issues.

In regard to rates, water rates must be factored in. The water supply into and the waste water from a premises is being metered. The owner of a premises will pay for the water consumed. Most local authorities apply a formula based on an assumption of the volume of waste water from a premises to a wastewater treatment plant and the owner of a premises is charged for that as well. That can be a significant charge on businesses and they also rightly have to pay refuse collection charges. The owner of an average size hotel can receive a bill of €70,000 from the local authority before he opens the door and meets a customer. That is a very high charge for a small hotel to have to pay. It is way too much.

Flexibility is required in regard to the forthcoming valuation Bill. A number of people have said that it is very rigid and that the annual amount is set. The phraseology used is archaic. Language such as "the first moiety" and "a half moiety" are used. I do not believe anybody in the 21st century knows that language. The use of such phraseology is extraordinary and it shows how archaic the system is. There should be a facility whereby rates could be charged on a monthly basis. There is a new phenomenon of pop up shops where people may want to set up a shop for the Christmas period or two months in the summer period. If there was a mechanism to charge rates on such premises, the authorities would be happy to charge them. If such shops are set up beside a shopping centre, there is confusion as who should pay the rates and, I suspect, sometime the rates are not paid by anybody. If one sets up a business and operates it for part of the year, somebody will be billed for the annual rates and the premises might only be open for a few months. It is important to examine those issues.

I mentioned the archaic nature of the system. Only elected members and a handful of people know how the system works. There is an annual rateable valuation and the rateable valuation is set by the valuation commissioners. There is an appeals system in place and we all know how long and complex that is. A council sets its annual rate of valuation in its annual estimates and one multiplies one by the other to get the rates bill. There are 88 rating authorities in Ireland. If the Minister halved that number tomorrow morning, we would support him on that. There should not be 88 rating authorities. In my county we have authorities that were town commissions. Portlaoise can set a rate and Mountmellick can set a rate and that goes on top of the county rate. There should not be an additional rate set for Portlaoise and a different rate set for Mountmellick. The idea of having three rating authorities in County Laois is long past its sell by date. If the Minister brings forward proposals on that, it would help simplify matters. It is a charade for these councils, which were town commissions, to set a rate. It gives the public the impression that they have a function, a role and a budget, but some of them have minuscule budgets.

Most people would see the sense of what I propose. It should only be an exceptional case where there would be more than one rating authority in a county. I am sure the corporation in the Minister's and Deputy McGuinness's county of Kilkenny would not like to lose its rights to be a local authority or planning authority, but that should only be the case in a county where there is a very big city. There is no reason Carlow should not have only one rating authority, one housing authority and one planning authority. There is no reason Offaly should not have one authority. Birr, Edenderry and Tullamore have housing authorities, planning authorities and rating authorities but at this stage Offaly County Council should be the authority for all of those.

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