Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. The background to this is that, between 2014 and 2019, compensation of the order of €47 million was paid annually to local authorities in lieu of commercial rates from Irish Water. Irish Water is liable for commercial rates from 2020 and the need for compensation in lieu of commercial rates ceases. The apportionment of the valuation of Irish Water among local authorities from 2020 will be based on population, similar to that for other utility companies with national networks. It is expected the local government sector will collect a broadly similar amount in commercial rates, as was previously paid as Exchequer-funded water rates compensation.

Most local authorities are better off under the revised distribution effect of the income from Irish Water commercial rates as compared to the compensation amount. However, seven local authorities will receive less in commercial rates than they received in compensation. Waterford City and County Council is particularly impacted, losing 70% of the income previously received through Irish Water rates related compensation. It is far less equipped to deal with such a reduction in income compared to the other impacted authorities, namely, the four Dublin local authorities as well as the Wicklow and Kildare local authorities. The loss creates a gap for Waterford to deal with of up to €3 million for its 2020 budget.

Support for local government in 2020 has been realigned, largely as a result of the valuation of Irish Water as a global utility liable for commercial rates. The Department of Housing, Planning and Local Government is monitoring the impact of this transition on local authorities and will, of course, take it into account. It is important local authorities have sufficient long-term sustainable funding to deliver critical services to local communities, rural and urban.

We are seeing a change in the way in which commercial rates will be allocated linked to Irish Water assets to ensure an appropriate distribution of those rates across local authorities. Most counties are gaining. Some counties, however, are losing as a result of that. Waterford is one of those. It is the job of the Department of Housing, Planning and Local Government to make sure it works through those challenging arrangements with the Waterford local authority to ensure it is appropriately funded through the transition.

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