Dáil debates
Tuesday, 12 December 2006
Local Government (Business Improvement Districts) Bill 2006 [Seanad]: Second and Subsequent Stages
5:00 am
Dick Roche (Wicklow, Fianna Fail)
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I move: "That the Bill be now read a Second Time."
As the festive season beckons, I am pleased to bring before the Dáil the Local Government (Business Improvement Districts) Bill 2006. The Bill has already been passed by Seanad Éireann having benefited from a wide-ranging and worthwhile debate on its provisions in the Seanad. The primary purpose of the Bill is to provide the legislative framework for the operation in Ireland of business improvement district schemes. It will introduce two technical amendments to the rating and valuation systems that will terminate an anomaly between these two codes and introduce more equity into the rating system.
Business improvement district schemes have been in operation for many years. A BID scheme can be described as an organisational and financing mechanism with legal backing through which businesses can develop and implement initiatives in defined areas to improve those areas for the betterment of the trading environment.
Essentially, in a BID scheme a group of businesses come together and decide first that they want enhanced services, a wider range of services, new facilities or new activities in an area. Second, these businesses decide that they are willing to pay for such services, facilities or activities. A specially established BID company is charged with responsibility for implementing the provisions of the BID scheme. The local authority plays a key role in such a company. In addition, the local authority collects the annual BID contributions that fund the scheme.
Originating in Toronto, Canada in 1971, business improvement district schemes are now in operation in many cities and towns throughout the world. It is estimated that there are more than 400 BID type schemes in operation in Canada and the United States. BID schemes are becoming increasingly popular in Europe. In the United Kingdom, for example, a legislative framework for BIDS was put in place in 2003. In so far as the UK is concerned, 42 BID ballots have taken place to date, of which 34 have been successful. The type of BIDS vary from town centre BIDS to mixed use, leisure, commercial and industrial BIDS and vary in location from Bolton to Liverpool to Swansea. In London alone, 12 BID schemes have been approved to date.
A wide range of activities can be carried out under a BID scheme, ranging from street cleaning, hospitality, promotions and special events to the provision of street furniture, signage and special lighting. A fundamental feature of the legislation is that the geographical boundary of a business improvement district and the range of services and improvements to be carried out in the district are determined by the business community. Thus, the business community, rather than central or local government, is the sponsoring party for BID schemes.
BIDS will represent a new and unique partnership arrangement between business and local government. While occasional tensions exist between local government and the business sector, important advances have been made in recent years in terms of formal partnership arrangements. A number of structures are now in place at local authority level which facilitate direct input by business into the development of policy at local level. Strategic policy committees at county and city level and municipal policy committees at town level are providing a direct channel for engagement by business in local authority areas. These changes have made a positive impact. Chambers Ireland has been very proactive in engaging with local authorities through these structures and local government has benefited greatly from this interaction. The BIDS will further enhance current partnership arrangements at local government level.
An important point I want to emphasise is that the services in a BID scheme will be additional to, not a substitute for, the services already being provided by the local council. I have included important benchmarking provisions in the Bill which will ensure that the level of services provided by a local council will be fully quantified in advance of a BID scheme being developed. These provisions will allay any concerns that local authorities might reduce the level of existing services following the introduction of a BID scheme.
In developing the provisions of the Bill, extensive consultation has been carried out with a wide range of interested parties. As key partners in BIDS, it was essential that early engagement took place with local authorities on this new and novel concept. In November 2001, my Department circulated local authorities with a draft framework for the operation of business improvement districts in Ireland. The concept of BIDS was outlined in the accompanying documentation. The observations of local authorities provided at the time were extremely useful in the further development of the framework.
There is also considerable engagement with the business community. The Dublin City Business Association in particular has been to the forefront in this regard.
I would like to set out for the House the main elements of the Bill and the principal issues associated with the development, running and financing of a scheme. Given the link between local government and BIDS, the legislative framework for BIDS will be incorporated into the Local Government Act 2001. The BID provisions are contained in section 4 of the Bill as passed by Seanad Éireann. The Bill inserts 20 new sections into the 2001 Act and these are numbered sections 129A to 129T. For ease of reference in discussing the Bill, I will refer to the new section numbers as they appear in the 2001 Act.
Section 129C provides that people wishing to undertake a business improvement district scheme must submit a proposal to the local authority for approval. The section sets out in detail the elements that must form part of a BID proposal. These include the boundary of the proposed BID area; a description of the objectives to be achieved under the scheme; a detailed description of the scheme itself specifying each project, service and work to be carried out or provided; the timeframe for operation of the scheme; details of the BID company which would be responsible for administering and managing the scheme; details of the current level of services being provided by the local authority; and details of the income and expenditure for the scheme. In addition, the proposal must include a current list of each rateable property in the proposed BID area.
In practice, the development of a proposal will require the BID proponents and the local authority to work together in a partnership approach. A key to the ultimate success of any BID proposal will be the extent to which there is meaningful engagement with the public and business community in an area. The Bill sets out a framework for such comprehensive consultation. In the first instance, a BID proposal submitted to a local authority must be made available for public inspection under section 129D. In response to an Opposition amendment on Committee Stage in the Seanad, I brought forward an amendment which provides that a BID proposal may be made available on the Internet.
Following publication of a BID proposal, the local authority must, by way of public notice, invite submissions from the public on the proposal. Following consideration of the submissions received, if the local authority is of the opinion that the BID proposal may be inconsistent with the interests of the local community, it must notify the BID proponents of the nature of the inconsistency. Where the local authority notifies the BID proponents that there may be inconsistency with local community interests, this would represent a clear signal that the BID proposal needs to be reviewed. Where any BID proposal is withdrawn or deemed to be withdrawn under section 129F, the BID proponents will be liable for all costs incurred by the local authority regarding the proposal.
Section 129G provides for the holding of a plebiscite to determine the level of support among ratepayers in the area. The financing of a BID scheme is a matter for the business community. It will involve the payment of an annual contribution by each business in a BID area. It is vital, therefore, that all businesses have a formal say on whether a BID proposal is to proceed. The plebiscite will be organised by the local authority. In the BID plebiscite, each business will have one vote. The vote of the corner shop is as valuable as that of the major department store. This is important because a BID scheme must have widespread and popular support. When a majority of the ratepayers who vote in the plebiscite vote in favour, the BID scheme can then be submitted for consideration by the local authority.
Section 129I provides that a BID company will be responsible for implementing and managing a BID scheme. The board of directors will be made up of businesses or their representatives and nominees of the local authority. At least two thirds of the directors must be ratepayers or ratepayer representatives. The Bill provides that where the board consists of fewer than 13 members, one will be selected by the elected council and one by the manager. Where the board consists of 13 members or more, two will be selected by the elected council and two by the manager.
I have given some thought to the balance of representation between local authority members and officials on a BID board. I believe that the equal level of representation provided for in the Bill is appropriate. Members of the councils have a clear role as policy makers and as guardians of the public interest, while the official representation is desirable in view of the high level of interaction which will take place with the BID proponents in the development and implementation of a BID scheme.
The BID company adopts a budget for the forthcoming year. The amount of the levy on any individual business is determined by the rateable valuation of that business. The local authority collects a BID contribution levy from each business in the BID area. The Bill provides for relief of 50% of the amount of the levy where a property is unoccupied. Current rating law contains similar provisions on rate refunds where a property is unoccupied. In effect, the 50% rate will apply where no income is being derived from a property and this is an equitable provision.
Two important provisions, which are not related to BIDs, deserve a mention. Section 5 provides that owners of newly erected properties will be liable to pay a levy to local authorities from the date the properties are entered on the valuation list. This ends an effective rating holiday which existed because of the inflexibility of current arrangements and increases equity in the rating system. Section 6 provides for an amendment to the Valuation Act 2001. Section 56 of that Act sought to ensure that the revaluation process, to be carried out by the Valuation Office, would not lead to disproportionate gains in rates income by local authorities in the year following a revaluation. The primary aim was to limit any negative consequences for the business community. In limiting the amount of income a local authority could raise through rates in the year following revaluation, section 56 did not provide for the rates buoyancy from new properties to accrue to local authorities. Section 6 addresses this anomaly.
I will table an amendment to the Bill on Committee Stage to provide that local authority audit committees can operate in line with best practice. I will deal with this issue in more detail on Committee Stage
The Bill provides an innovative framework for businesses and local authorities to work together for the betterment of towns and cities throughout the country. Research on the operation of BIDs in the USA has indicated that they provide a vehicle for innovative and proactive management of an area and yield significant positive impacts on the economic vitality and viability of cities and towns. All investment made through BIDs will be additional and complementary to the current level of services provided by the local authority. Investment under BIDs will leverage further investment into BIDs and surrounding areas as a consequence of the goodwill and impetus which will be generated by such schemes. There has been a broad welcome for this Bill across all sectors. I am grateful for the cross-party support for the Bill during its passage through Seanad Éireann and I look forward to similar support today.
Fergus O'Dowd (Louth, Fine Gael)
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A unique partnership is proposed in this Bill. The idea comes from the United States, where it has worked successfully in a number of cities. It has also been used in Canada and the UK and now it is being introduced here. In principle, I favour the proposition that money other than the normal expenditure of a local authority, with the consent of commercial ratepayers, may be used in projects to improve their community. Such projects would include the improvement of signage, the removal of graffiti or even more high profile projects, but I have some serious questions and, in view of the fact that this Bill will be law in an hour, we have been given inadequate time to discuss it. Nonetheless, we are in favour of the Bill in principle.
The Minister's proposal states that the majority of ratepayers, each of them having one vote, will decide whether a bid goes through. My research shows that in the UK, a two-part process exists that is not in this Bill. First, a majority of those voting must vote in favour. Second, the total rateable value of the properties of those voting in favour must be more than that of those voting against. Therefore, an in-built balance exists which is not in this Bill.
The chambers of commerce welcome the Bill and are very much in support of it. They have been anticipating this Bill for more than four years and it is a significant step for the funding of local services. Therefore, I am coming from the point of view of those who want this Bill to work and who favour it in principle. I ask the Minister to examine the situation in the United Kingdom, where there is a second check and balance provision regarding ratepayers. The problem is that communities in Ireland are different from those in the United States and the United Kingdom, where there are many more cities than towns and large centres of population. In places such as Dublin, this could be a very dynamic and useful operation where there are many successful businesses. However, further down the line, we need to be very careful in Cork, Galway, etc, because while a number of people might be doing significant business, others might not. The Minister must ensure that a consensus emerges rather than a dominant group which may have the economic power in this regard.
I acknowledge that what one pays is based on one's rateable valuation. Nonetheless, I want to ensure that the Bill is as inclusive as possible and I ask the Minister to consider raising the bar from a simple majority to perhaps two thirds, which would achieve greater consensus. If there is only a simple majority for the proposal, it might lead to conflict, pressure and so on. I make this point in the context of supporting the Bill in principle while trying to improve it and make it more sustainable. That is an important issue and I would appreciate it if the Minister would consider it on Committee Stage.
The Minister has announced he will insert an amendment, which we will have little time to discuss, about the audit committees of the council. In terms of auditing local authority financing, I presume this applies to all of the business of the council across the board, not just the BID proposals.
Fergus O'Dowd (Louth, Fine Gael)
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In that case, the issue is how local authorities and elected members look at what the council is doing financially — how it exercises its power. I have found in the past that they are very reluctant to exercise their power. I have always argued that there ought to be a finance committee that meets quarterly at least with the finance officers of a local authority to ensure that the budget is what it says it is and to go through all the financial proposals from each department in the council before the final proposal is put before councillors, which is happening as I speak. The problem is that councillors tend to pass the estimates, having been given a lead as regards particular projects they might be interested in, but they do not deal with matters in minute detail. I would like to see this happening and if that is the objective of the Minister's amendment, I have no problem with it. However, I have an issue as regards local government finances generally and value for money. One of the problems is that the auditing of the accounts is done by the local government auditor, but they are not presented or laid before the Committee of Public Accounts.
As a further step I would like to see, in terms of the transparency and openness of local authority funding and expenditure, that having gone through the democratic process of the council, it would be laid before the Chairman of the Committee of Public Accounts so that issues which specifically relate to value for money in local government might be examined. I do not know whether that is to be in the Minister's amendment, but I ask him to address that issue because it is very important that this should happen.
Another issue that has arisen relates to the additional provisions of the Bill, as referred to by the Minister. I will quote from his speech, but I am not sure whether the chambers of commerce have been consulted on this point. I understand he has had consultation as regards the Bill as a whole, but I do not know whether this particular issue was addressed.
Section 5 of the Bill provides that newly erected properties will be liable to pay a levy to local authorities from the date the properties are entered on the valuation list. This ends an effective "rating holiday" which existed because of the inflexibility of current arrangements and increases equity in the rating system.
The Minister will correct me if I am wrong, but I understood that over ten years one paid an increasing proportion of the final rateable levy. The first year 10% is paid, while 20% is paid the second year and so on. Is the Minister proposing to do away with that position? If so, I would be concerned. For example, in the context of a start-up business which might not have much money and obtains family support or a small loan within the local community, it would now be faced with full rateable valuation from day one. If that is what is being proposed, I am opposed to it on the grounds that it is a retrograde step.
Section 6 of the Bill provides an amendment to the Valuation Act 2001. I ask the Minister to explain those issues more clearly to me on Committee Stage. I will support the Bill on Second Stage but I would like clarity as regards those other proposals.
The last point I wish to make concerns an issue brought to my attention by Members in my party. They want clarity regarding where the Minister talks about the work that the BIDs might do so that they do not perform activities which at present are being done by the local authority. The point made to me by a number of Deputies was to the effect that the improvement or beautification of streets or footpaths in the business improvement district or on any lands buildings and other structures, such as the removal of graffiti, etc, is work which the local authority is obliged to carry out at present. The Deputies have asked me to query where the Minister draws the line. If it is a local authority with a poor rates base, as in some counties, will this be work, which should be done by a local authority which does not have the capacity to do it, that will fall on the business community? This is an important point and needs clarification.
Generally, I welcome the significant progress that can be made. I welcome that the chambers of commerce are behind the principle of the Bill and the innovation legislation it represents. I look forward to getting the clarifications I sought. I need them before I can support the Bill on Committee and further Stages.
6:00 am
Eamon Gilmore (Dún Laoghaire, Labour)
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The Labour Party is generally supportive of this Bill, but I very much regret the fact that we are being asked to pass it into law in about an hour's time because many aspects of it require teasing out in a normal Committee Stage discussion. There are three essential elements to the Bill — the establishment of the business improvement districts and the procedures in that regard; changes in the rating and valuation system for new businesses; and the amendment the Minister is introducing in respect of audit committees in local authorities.
In so far as the Bill is primarily concerned with rates and levies being paid by businesses to local authorities for certain services, the legislation requires a greater deal of discussion than it will get today. Frankly, the Government is being disrespectful to the business community, which is now the only section of Irish society to pay rates to local authorities. It makes a very substantial contribution to the finances of local government. As a matter of respect, while I appreciate that their representatives have been involved in consultation and that the chambers of commerce are broadly supportive of the legislation, a Bill dealing with a charging and levying regime for business deserves more consideration in this House than being rushed through the week before Christmas without a proper Committee Stage discussion.
I would like to have seen a number of areas teased out in a proper Committee Stage discussion. One of the proposals for the adoption of the BID scheme, for example, is that it should be done by one third of the membership of the local authority. I do not know where that threshold came from, but it is an area I would like teased out. It seems a low threshold for such a serous proposal.
There is an inconsistency as regards the provisions on the plebiscite and the way in which the levy is to be applied.
My understanding of section 129G(4) is that where there is multiple occupancy of a premises, there will be only one vote. Consequently, ratepayers who occupy part of such building will be obliged to agree among themselves how the vote is to be passed, even though the building might contain a number of separate rateable businesses. However, when it comes to applying the levy, the businesses will each be levied separately. This seems inconsistent and I would have liked Members to have teased out this issue.
The levy will apply on a majority basis. Businesses in a particular district will vote for it and it will then apply to everyone. While I appreciate that the majority rules, I would have liked some discussion as to what might happen in a case where a significant minority might be opposed to it, but is faced with being levied for it. In particular, I would have liked this issue to have been teased out in respect of circumstances in which the district might involve dominant businesses and in which pressure might be applied to businesses.
I also would have liked to have teased out questions regarding circumstances in which the Bill might be used for purposes for which it was not intended. The Minister's presentation stated it is for the upgrading of areas, by providing car parking or general improvements. I put the following scenario, with which Deputy Cuffe is familiar, to the Minister. At present, a proposal for a local area plan in Stillorgan is being prepared by the local authority. Much of the old shopping centre in Stillorgan and adjoining properties have been bought by a single developer who proposes to carry out his own local area plan. What in this Bill can prevent the following scenario? A developer who owns all the properties and who represents a majority of the ratepayers involved, proposes a BID scheme. He or she then begins to create what effectively would be a local area plan, using the BID scheme as a back door method for so doing. This matter should also have been teased out. I know of many other cases, such as redevelopments of shopping centres, which can be quite controversial in a locality. How can one avoid the BID formula being misused in such a manner?
What becomes of people who are not ratepayers? I cite Dún Laoghaire as an example. A significant number of people live in the town, whose interests as to what might happen to the town may not always coincide with what is being advocated by business in the town. All Members know of the conflicts that can arise in respect of matters such as car parking arrangements, traffic management, deliveries, the physical appearance of a town and similar issues, in which businesses may have one view while local residents might have another. Under this formula, businesses obviously will have a vote on BID schemes because they will pay for it and will have the clout. However, the only recourse for those who have lived in the town all their lives and who may have a different view would be to try to persuade members of the local authority not to proceed with the scheme.
How will one ensure the BID levy will not act as a substitute for rates? It is interesting that currently businesses are the only part of the economy that pay rates to local authorities. This is a formula in which a new voluntary rate, if I may put it that way, will be added to businesses. What safeguards exist to ensure businesses' payments under a BID schemes will not be used to provide services that local authorities should have provided from the rates the former have already paid?
I am concerned in respect of the provision for a local authority clawback in section 129K(6) which states: "The rating authority may recover from the BID fund all reasonable costs it incurs in performing functions related to the BID scheme". I wish to hear more regarding how one could prevent a local authority from getting greedy and taking too much back from the BID fund. Moreover, there is a lack of clarity regarding the role of councillors and local authority officials on such boards. The Minister's contribution noted they will be present as policymakers and as guardians of the public interest. However, my understanding is that under the Bill, they will be directors of the company and will have obligations, as company directors, under company law which may not always coincide or rest easily with their functions as guardians of the public interest. To whom will they owe their loyalty? Are they, as company directors, required to comply with one set of rules and, as public representatives, to comply with a different set or to serve a different master? There is a lack of clarity in this respect that must be dealt with.
The formulae for the changing of rates and of the valuation system also requires more time to be teased out than is available this evening. On the Order of Business, I drew attention to the rather complex algebra, to which Members are being invited to give approval, to give effect to the new rating regimes and to the limits on valuations and on rating payments. Such subjects require some time to ascertain exactly what is meant. For example, at some point all Members as legislators will be asked what is the liability for rates on a business in a particular set of circumstances. Members are not being provided with an opportunity to have this issue elucidated and explained as it should be. Rushing the Bill through in such a short time is no way to make law governing rates and valuations of businesses.
The Minister has tabled an amendment in respect of audit committees for local authorities. This morning, I read in a newspaper that this constitutes a new venture on the Minister's part and that the idea to have independent auditing and evaluation of local government financing is new. However, it is nothing of the sort as section 122 of the Local Government Act 2001 already provided for the establishment of audit committees in local authorities.
Eamon Gilmore (Dún Laoghaire, Labour)
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It did not work for two reasons. First, the Minister and the Department frustrated its operation.
Eamon Gilmore (Dún Laoghaire, Labour)
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While I do not know when the Minister commenced the section to enable local authorities to establish audit committees, there was a long delay in so doing. Second, it was frustrated at local level by local authority management, who did not wish to see the establishment of audit committees before which a local government auditor could be called and questioned.
Section 122 of the Local Government Act provided for the equivalent of the Committee of Public Accounts to operate in local authorities. It is a great pity Members lack the time to work through the Minister's amendment, which does not appear to strengthen this position at all. If anything, it weakens the role of audit committees in local authorities. At present, section 122 allows for the local government auditor to be brought before the committee in the same manner in which the Comptroller and Auditor General attends the Committee of Public Accounts. The latter is questioned, makes a report, explains what the audit means and so on.
There are similar powers enabling the audit committee to bring before it council management and to have them questioned. However, the Minister is replacing these provisions with a formula in which there will be a council committee that can discuss all kinds of matters, can review financial and budgetary reporting and foster the development of best practice. However, it will have no teeth whereas the current section 122, if it was allowed to operate, does so. If anything, the new formula proposed by the Minister, which he has touted in the media as representing a strengthening of financial accountability in local authorities, appears to be weakening its potential. I use the term "potential" because I am conscious the audit committee idea never really got up and running in local authorities, as it should have. The Minister's amendment weakens rather than strengthens it. I would like to see it strengthened and made effective and really operational.
As far as the principle of this Bill in terms of the establishment of the business improvement districts is concerned, I can see the logic of what is being done with rates and valuations. I have my doubts, which I have expressed, about the amendment on the audit committees that the Minister intends to propose. I have no difficulty with the general thrust of the Bill and if this were a Second Stage debate in the normal sense, I would support it. Unfortunately, we are being deprived of the opportunity to give the Bill the detailed scrutiny it needs and deserves. The Minister is unwise in rushing this Bill through the House when there would have been general goodwill towards it and a general willingness to see it enacted, but also to have it properly considered, scrutinised and evaluated line by line.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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Although the business community is creative, entrepreneurial and dynamic, and I fully agree that such energy should be harnessed and local authorities have not necessarily been to the fore traditionally in capturing it, I am concerned at the manner in which the Minister is bringing forward legislation in the House today, the third last sitting day of the session. Rushed legislation is almost inevitably flawed. We must now go back and revisit the A case legislation from six months ago. The concerns about which I argued then are now all being reiterated by the Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell. No doubt if the Minister, Deputy Roche, railroads this legislation through today or tomorrow, we will have to revisit it.
Not only is this complex legislation being hammered through today, but the Minister is also throwing in some important amendments to the existing rates legislation. It is a great deal to ask that we shove this through within the next 45 minutes. It is not the right way. Frankly, it is disrespectful to the House. This is not the way to put it through the House.
On a wider issue, the organisations that are behind this Bill are worthy ones and have a significant amount of creative energy to add. The Dublin City Business Association, through Mr. Tom Coffey, has added enormously to the debate about Dublin city. I recall that ten or 15 years ago Tom gave me a copy of Richard Rogers's A New London, which contained a considerable number of great ideas about the city. Chambers Ireland has also added to the discussion on accountability and the need for districts to be responsible. That is all useful.
Behind all this is my gut conviction that local authorities should be dealing well with these activities and I am very nervous about a bolt-on strategy to the existing local authority system. There are perhaps two elephants in the corner in this regard. The first is the Minister's denial of the adequate funding that local authorities should receive. He is not providing it. The second is the inflexibility of local authorities, whether that is due to inherited work practices or simply an inability to be dynamic and to respond to changing ideas and needs. I passionately believe that local authorities should be to the forefront of change and we need to make them work well rather than clamp an extra framework onto them that, ironically, will make them more bureaucratic.
If something needs to be fixed within local authorities, let us fix it but let us not simply add another layer to a process that is remarkably murky at present due to the changes that have been put upon the local authority system over the past ten years. The strategy policy committees are difficult for the outsider to comprehend but if one thinks they are bad, the addition of business improvement districts will make it even more difficult to comprehend what is happening.
I am also nervous of the examples that have been chosen. Business improvement districts appear to be popular, both in the UK and the United States. Frankly, our towns are not like Philadelphia, midtown Manhattan, Nottingham or Birmingham. We are lucky enough to have inherited strong town centres, although these are under threat from out of town shopping due the changes wrought by the Minister whereby he opened the stable door to allow development elsewhere, whether on the Ballymun Road with IKEA or in getting rid of the cap on the size of shopping centres. The Minister did something similar to what Margaret Thatcher did 20 years ago when he essentially gave carte blanche for development to take place outside the traditional town centres. That was a retrograde step.
Returning to the kind of issues that will be undertaken by business improvement districts and their boards, it is crucially important that we get right issues such as street cleaning, street furniture, signage and special lighting. Mr. Dick Gleeson, the chief planner in Dublin City Council, has referred to the public space of the city as being the living room. That is a good comparison to draw. When one looks at the floor as the footpath or pavement and the walls as the buildings, it is important that we get it right. In Ireland, we went through a particularly bad phase over the past 30 years when we allowed second best to suffice. The paving of Grafton Street with concrete bricks was a retrograde step.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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The bad aluminium street signs falling apart after 20 years were a retrograde step. We need to rediscover good materials such as cast-iron signage and natural stone. The examples I would look at are cities such as Ferrara and Bologna in Italy and Barcelona in Spain which do things well. Such cities do not use business improvement districts. They use the local authorities and they have reinvigorated them and given the power, ability and funding to deliver on improving the public space. That is significantly important.
I am tabling amendments to the Bill this evening. One of the most important concerns the idea that we must work with the existing residential community as well. I favour mixed use communities, that is, businesses and residential units in the same area. It is important that we harness the know-how of those communities and allow the residents and communities representation.
This is being rushed and I disagree with that process. I am putting forward amendments to it. Behind all of this is the need to give local authorities the power and clout they deserve. Sadly, I do not think Fianna Fáil and the Minister believe in it. If the Minister did, he would put local authorities on a firm financial footing and that would really harness the creative energy which local communities and local businesses possess and which, if all hands were put to the wheel, would really deliver the best for local communities. There are good examples of that, but they are against the odds.
I worry that it could go dramatically wrong. I look at one of the towns in the Minister's constituency, Wicklow town, where businesses have sponsored seats and put their advertising onto them. That is how one does it badly. We need to do it well and I am not convinced that rushing through a Bill over the next 40 minutes will do that ultimately.
Arthur Morgan (Louth, Sinn Fein)
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I welcome the thrust and intention of the Bill. We all want achievement of its objectives because we know that visual appearance is extremely important, not just on high streets, but also industrial centres in urban and rural areas. The Bill seeks to bring together people to efficiently and effectively produce a plan to enhance their area beyond a point which would be reasonable for public financing. The concept of modern marketing is heavily dependent on image, although we should not underestimate the depth of the substance behind it. Irish businesses are significantly improving their image.
The Bill provides for the improvement or beautification of streets and footpaths in business improvement districts. This can be achieved by grouping together, as described in the Bill, in a business improvement district. This type of work could not be done by local authorities alone. While local authorities strive to, for example, remove graffiti, they are rarely successful because that problem is prevalent in many areas. It is not unreasonable that local businesses join together to deal with such issues. I welcome the provision for the carrying out of studies and making of reports in respect of the business improvement district.
The new section 129E proposed for Part 13A of the principal Act gives an opportunity for public input into the consultation process. We are familiar with consultation processes in this State and I must sound a note of caution. We have had such processes on issues such as incineration and road development, but they were paper exercises and the consultation was not heeded. This causes me considerable concern. Provision must be made for consultation.
Section 129F allows the local authority to weed out what I can best describe as bluffers, namely, developers who will cause considerable expense to taxpayers or ratepayers in preparing material or working with the local authority to develop a scheme, but cry off at the last moment. Section 129H provides for the cost of preparing for the scheme and ensures that it will not fall upon the local authority. This is an important and welcome element of the Bill.
However, I am concerned about section 5 and this has also been referred to by another speaker. It states: "It is necessary for the passing of a resolution under subsection (1) that at least one third of the total number of members of the authority concerned vote in favour of the resolution." What happens if 60% of members vote against a resolution, 10% abstain and 30% vote in favour of it? How stands the business improvement district in such circumstances? I do not think the Bill is clear enough on this matter. I welcome the fact that plebiscites are to be organised by the relevant local authority; no one in this State is as proficient in organising plebiscites as local authorities.
I have a difficulty with water pricing policy. When discussing business it is important that we mention not only marketing and image, but competitiveness too. I am concerned that some local authorities have shown disregard for the effect of water pricing policy on competitiveness. Businesses are expected to pay over the odds. I acknowledge that the Minister said that he would try to ensure this does not happen. Unfortunately, it is currently happening.
It is unfortunate that we do not have more time to deal with this matter. The framework of the Bill is fine and a couple of decent amendments would ensure that we could all accept it. Unfortunately, we cannot do so as it stands.
Paul Connaughton Snr (Galway East, Fine Gael)
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Like everyone else, I welcome the overall concept of this Bill. I took particular notice of the Bill as it progressed through the Seanad. Given that the Dáil adjourned early several times in recent months, I do not know why we have such a short period to deal with this Bill. At that time, the Government was not able to bring forward legislation, but all of a sudden this Bill has become hugely important business.
I do not have a background in this area and I am not exactly sure how the issue will pan out. The Bill gives an opportunity to businesses and others to progress matters in a communal manner in a particular area. A number of factors would have to be in place for this to work. Based on what is happening in Britain and the United States, critical mass is important. I find it difficult to see how this will come about in a small town like Ballinasloe, for example. There is no reason that it should not, but I imagine that it would have to be pioneered by an organisation as powerful as the Dublin Chamber of Commerce or some similar organisation. It is worth giving this Bill a chance. Assuming it is passed in its current form, I expect an organisation will pilot this in one of our cities, probably Dublin.
I was a member of local authorities and have been a Member of this House for some time, and I have always found great tension between the business community and local authorities. It should not be like that; everyone should be on the same path and should aim to bring about prosperity and the better delivery of services. However, for some reason there is barely a town with a local council where there is not tension between it and the business community. Perhaps when this concept was first mooted many years ago it was done with the intention of overcoming this problem. If that could be achieved, it should be closely examined. With the competition this county faces, there is no room for tension between local authorities and the business community — it is better that they sing from the same hymn sheet. I assume that much of the tension arises from rows over rates and valuations. Many people either think the money is not well spent or that they are too highly rated. There is also the clear disparity between what is deemed commercial and social in a community. These lines can be jarred on occasion.
I note that the chambers of commerce are strongly behind the concept of this proposal. There are likely to be big businesses in the areas where this will work best. They tend to bring a lot of business and traffic into particular areas. One could argue that they might have been the cause of extinguishing or diminishing existing businesses. The Minister proposes checks and balances in the system of rateable valuations by the use of a mechanism preventing one anchor tenant controlling everything. That is a very important provision as the proposals would not otherwise work.
The Bill reminds me of the Leader programme in agriculture in the way it tries to bring together various features which increase productivity and beautify an area. That is a very useful concept, provided it is handled correctly.
I also understand the Minister proposes to amend the Valuation Act 2001. Some businesses have low valuations and others high, which has been a vexed question for many years. It can be assumed that any changes in valuations will be upwards — current high valuations will not be reduced and lower valuations will be increased, which will cause problems.
The Bill proposes to introduce outside audit experts to sit on existing boards, on strategic policy committees and on finance committees of county councils or local authorities. I share the view of Deputy Gilmore on this matter. Having been a member of the Committee of Public Accounts for a few years, I always believed that local authorities should be brought under its remit. I do not think many in the Dáil would disagree, however, that local authorities have a good record on the question of misappropriation of funds. Over the years there have been no major disasters and, while they may move slowly and lack imagination when proceeding with various projects, at least the books always seem to have been correct, for which I pay tribute to them. Will the people who take up additional seats on the board become directors? What responsibilities will they have?
On the detail of a BID proposal, the Minister said: "Following publication of a BID proposal, the local authority must, by way of public notice, invite submissions from the public on the proposal." When summing up can the Minister say what will happen if the public objects to a proposal in large numbers? What mechanism will deal with that? It is very important the public be taken into account but, at the same time, a good project should not be jettisoned for a frivolous reason.
Fine Gael, like most in the House today, supports the principle of the Bill and hopes the Minister provides answers to the many questions that have been asked. He does not have much time to convince us, however, for which he should be ashamed. There is no excuse for that but we await his words of wisdom between now and 7 p.m.
Paudge Connolly (Cavan-Monaghan, Independent)
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How long do I have?
Paudge Connolly (Cavan-Monaghan, Independent)
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I wish to share time with Deputy Cowley. I welcome this Bill. There has been widespread support for business improvement districts, BIDs, since their emergence in the late 1960s or early 1970s in Toronto. BIDs are essentially public private partnerships, to which we have become accustomed, in which property and business owners of a defined area decide to make a collective contribution to the maintenance, development, marketing and promotion of their commercial district. The idea is similar to the promotion of a suburban shopping centre or mall, for which tenants must pay a maintenance fee. Chambers of commerce have also come together to promote themselves and it is a very effective way of doing business. I recall a supermarket being granted planning permission to open beside a small shop, prompting many objections from the small shop owner, fearing her business would be wiped out. Eventually, she had to take on three or four more employees because of the increase in her trade. There can be a fantastic spin-off for individuals if they approach such developments in the right way and realise there is strength in numbers.
In the coming decade business improvement districts will develop more partnerships with residents and, in doing so, show more concern for open public space and community projects. I, Deputy Crawford and the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, attended a meeting in Virginia last night at which bad planning and the failure to demonstrate joined-up thinking were discussed. One such example was of a primary school whose services had become quite inadequate. Planners had been happy to grant permissions, builders to build and people to move into the neighbourhood but the education of children had not been catered for. The speakers also decried departments being separated from each other.
We need people to come together and be responsible for their own planning issues. The people of Bailieborough should have been brought into the loop by councillors, or by us in this House, and told about the planning process, the implications of planning permission to build houses and the greater importance of schools in that equation.
In many cities across the United States, business improvement districts have brought new economic opportunities and revitalisation strategies to run-down areas. Central government cannot achieve that so people must accept some responsibility for their own area and take a degree of ownership. In another example in Monaghan, the Mullaghmatt housing estate was built some time ago. The council then let the houses to people but did not properly maintain them. Now people are trying to take ownership of the scheme. They should get some Government assistance as they are meeting with many objections and not being adequately supported. I ask the Minister to give ownership to these people because, in the long term, the Government will receive a greater dividend by supporting and encouraging such local developments and it would involve a relatively small amount of money.
Business improvement districts provide an opportunity for co-operation, not only between the public and private sectors but also with planners, by bringing together various interest groups who share common goals. There are many diverse interest groups and the idea of business improvement districts offers the opportunity to pull people together.
In the coming century initiating and fostering these partnerships among community groups may be one of the most important roles of urban planners. Urban planners must start to think outside the box and include people. The people on the housing scheme to which I referred do not believe that they are in the loop. There are similar schemes in Muirhevnamore etc. It is a matter of pulling people in and giving them a voice, be it unofficial or whatever. They may not need to be elected representatives of the public, but while they do not necessarily go forward for public election, they are the voice of the people.
Jerry Cowley (Mayo, Independent)
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I welcome the opportunity to speak on this Bill. People interested in developing areas should note that this innovative concept has been used internationally and I welcome the idea behind the scheme.
Unfortunately, I approach this matter with a degree of cynicism. While I like to be positive and proactive in everything I say and do, I have seen wonderful projects across Europe that were co-financed by local authorities. As someone who has been involved in community projects, I am upset and annoyed by the lack of support provided by local authorities to communities interested in positive projects. If one comprises a for-profit business, one has every opportunity to get money and to use it to good effect, but it is more difficult for community concerns. Previous schemes required local community contributions, but getting that money can cost an arm and a leg and such projects may not get off the ground.
I welcome the positive idea of a business improvement districts scheme, but enterprise schemes are only as good as the investment made and the willingness of the local authority to carry them through. In my area, the local authority has been incapable of handling waste management. People have been given notice of ten business days, excluding holidays, to try to get an alternative disposal system for our county. One would be inclined to succumb to the cynicism stemming from such issues, but one likes to be positive concerning these matters.
The town of Ballina is a neglected area and has lost thousands of jobs without replacements. It does not have an IDA Ireland site to which industrialists can locate. We have been told that industrialists have been brought by IDA Ireland, but we do not know where because no industrial site exists. There is a legal problem in respect of land acquired a number of years ago, but any local or State authority interested in the type of development that would bring necessary jobs to the area should ensure that the matter of land is not held up in a legal quagmire for years.
We lack the resources to build the infrastructure necessary to make our area competitive, namely, broadband, roads and railways. We must wait until 2008 before the BMW region is brought up to a par with the east and the south. By 2008, the deficit of €500 million in respect of our roads will have been made up, but where will the south and east be? They will have gone so far ahead that the BMW region will not have caught up. We will continue to lose 60% of graduates to the greater Dublin area.
Such problems exist, but I welcome the business improvement districts scheme and any measure that allows local autonomy in collecting funding for local use. It is my earnest wish that schemes such as this succeed. I will be positive concerning the matter and I hope that the Government will live up to its obligations to balance the deficit, which should have been made up by the end of this month, by 2008.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I welcome the opportunity to contribute to the debate on this legislation. While I may not be as positive as some of my colleagues, it is not for reason of being awkward. I come from the Border region where rates, insurance and so on have been major headaches. I am slow to agree to more levies that may push businesses further into difficulty. I realise that benefits will accrue from the BID scheme, but we must be careful. During a Dáil term when business broke down several times, it is unfortunate to rush this Bill through with little time to debate the nitty-gritty of the scheme.
To start with the end of the Minister's speech rather than the beginning, one statement was particularly interesting. Often, I have heard the Minister make statements that sound great. He stated: "All investment made through BIDs will be additional and complementary to the current level of services provided by the local authority." I welcome the various funding provided to the Border region, such as the IFI funding resulting from the Anglo-Irish Agreement, the peace and reconciliation funding resulting from the Good Friday Agreement and the INTERREG III funding.
The assurance given in respect of all the funding programmes was that, beyond a certain point, they would comprise additional funding based on the fact that areas had suffered dramatically due to the Troubles. I went to school in Clones, and every road around it was closed down. I will speak on valuations later, but the rates and insurance costs paid by businesses, such as hotels and filling stations, despite their economic difficulties, led to their closing.
INTERREG, peace and reconciliation and IFI funding were introduced as additional funding to ensure that businesses would get extra money to guarantee them a step up. Thank God for the funding. It was needed, but it certainly was not additional, and I am not the only person who has said so. The Taoiseach, who sat where the Minister is seated, admitted it to me across the floor of the House. Anyone who examines the figures knows that is the case. If the Bill is to be meaningful, it is important that the funding is additional and that, in one or two years, we do not find that it has become a replacement.
As the Chambers of Commerce of Ireland support the scheme, it has the backing of business people and industry. My colleague, Deputy Connolly, mentioned Mullaghmatt. While it is a housing estate, it differs from those for which this scheme is intended. However, I cannot help but support my colleague's cry for Mullaghmatt to be examined. While a great deal of money is being provided, it is a matter of keeping the scheme moving and ensuring the community's involvement. The community is prepared to get involved to ensure that the scheme works properly and that support is given for the work on the houses and walls. There could be community employment scheme involvement if the groups concerned worked together.
Money was allocated by the Department of the Environment, Heritage and Local Government to build a back road behind Dublin Street in Monaghan to allow major development. There was, however, no mechanism to bring people together so it did not happen and the money was used for a road in Mullaghmatt. I see benefits in this legislation so I want to tease it out to see how it might work. That money was allocated and certain people in the area were enthusiastic but unfortunately it did not work.
Towns such as Ballybay, Clones and Castleblayney have been on their knees. Many businesses are not being utilised and many for sale signs are visible. The problem is that the moment someone tries to get reconstruction off the ground, some person arrives from the Valuation authority in Dublin. Immediately a high rate is placed on the property. I wrote to the Minister some time ago and received in reply a two page letter dictated by some of his Civil Service colleagues.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I appreciate that, not all Ministers do it. It does not, however, address the problem that there must be some leeway to allow those people to get off the ground.
There is a business in south Monaghan in a factory that was closed for many years. It is now a cement works, a completely different enterprise from the towel factory it once was. It has been compared to all sorts of other businesses for rates. This company decided to utilise the steel work to ensure its workers were covered while making the cement where many of its competitors work in the open air. The company was given a valuation of €1,196 or a rate bill of €63,000 for 30 workers. There must be a degree of fairness in the system, and this is completely over the top. I talked to a number of people in the business and they say this is madness because the company will have to shed jobs to find the means to pay the bill if it is to continue in business. It is a miracle the factory has reopened. CPD in Clones was a major ratepayer and it is lying empty.
We must be sympathetic towards small businesses that are trying to get off the ground and ensure they are not forced out of business. I welcome the ideas in the Bill but small businesses need help to get off the ground and extra levies are not the answer.
Fergus O'Dowd (Louth, Fine Gael)
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On a point of order, what are the arrangements for the conclusion of the debate?
Séamus Pattison (Carlow-Kilkenny, Labour)
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The debate will conclude at 7 p.m.
Fergus O'Dowd (Louth, Fine Gael)
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Can the Minister extend that time?
Séamus Pattison (Carlow-Kilkenny, Labour)
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No, it is an order of the House.
Fergus O'Dowd (Louth, Fine Gael)
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Here is a golden opportunity to amend the Bill and we are all in favour of it in principle.
Eamon Gilmore (Dún Laoghaire, Labour)
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We could do this by consensus.
Fergus O'Dowd (Louth, Fine Gael)
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The opportunity, however, is being denied us and the Minister. It is very arrogant for the Minister to treat the House in such a cavalier manner. It is unacceptable and undemocratic and does the Minister's cause no good.
Dick Roche (Wicklow, Fianna Fail)
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It is a pity that Deputy O'Dowd chooses to personalise his points, although he is entitled to make them.
Fergus O'Dowd (Louth, Fine Gael)
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The Minister is being arrogant.
Dick Roche (Wicklow, Fianna Fail)
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He calls me arrogant but I want to make some points.
Fergus O'Dowd (Louth, Fine Gael)
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This is Fianna Fáil arrogance at its worst and the Minister is the worst of them all.
Fergus O'Dowd (Louth, Fine Gael)
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He is the most arrogant Minister; he has a Bill he will not allow us to debate when we agree with it in principle.
Dick Roche (Wicklow, Fianna Fail)
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Name calling in the House is just silly.
Eamon Gilmore (Dún Laoghaire, Labour)
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The Minister is no slouch when it comes to that himself.
Dick Roche (Wicklow, Fianna Fail)
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I regret the Deputy takes that point of view but I will not return it in kind.
Deputy Crawford said he was worried about this being imposed but it will not be. We are introducing facilitative legislation which will allow businesses in a particular area to come together for a specific purpose.
Deputy O'Dowd, until his last few moments in a very constructive contribution, was concerned about the majority and he made the point that the British have a double system. The opposite effect would arise here, however, because it would give a disproportionate representation to the views of large business and it is important that there is equality in the system.
Deputies O'Dowd, Gilmore and Crawford mentioned additionality. The idea is that it is protected by the benchmarking arrangements that exist specifically for that purpose.
A number of Deputies mentioned the rating holiday that is being ended. I was surprised this was raised so frequently because it is an injection of equity for all the other ratepayers; a holiday must be paid for and it is not fair if it is paid for by other ratepayers.
Deputies asked about the additionality and how to protect against it. The BID company will have specific requirements that will then be costed and allocated. Nothing other than those things the company requires to be brought on board will be brought into it.
Deputy Cuffe, who characteristically made a contribution and then left the House having asked a series of questions, made the point about local government being sufficiently funded. I draw attention to the allocation yesterday of €958 million to local authorities through the general purposes grant. Last year we allocated almost €600 million for non-national roads and the figure will be higher this year. This funding is almost three times what it was when other parties were in power in 1997.
Paul Connaughton Snr (Galway East, Fine Gael)
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The roads are still a mess.
7:00 am
Dick Roche (Wicklow, Fianna Fail)
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I make that point because it is becoming jaded for us to argue continuously that local authorities do not have money. The major issue now is that local authorities have taxpayers' money, €9,000 million in one way or another in the coming year. That is a huge amount and explains why I have introduced the amendments on the audit committees. Deputy Gilmore was partly correct, the committees have not worked. I agree that local authority members find it challenging to deal with the funds that come forward. Local authority accounts are impenetrable and when talking about the expenditure local authorities are dealing with, it is important we strengthen the audit process. We do not get value for money for every penny spent in all parts of public administration but I would be hard to persuade that we get 100% value for money in local government.
In amendments Nos. 1, 2 and 11 we see a different form of audit committee with external membership to provide an alternative view and assess and promote efficiency, review the financial and budgetary reporting relationship, foster the development of best practice, review the auditor's report, review risk management and make other recommendations to the members of the local authority.
I will bring forward specific regulations to deal with audit committees, the holding of meetings and so on. Regardless of whether they should comprise five or seven members, they should be small. It is important that significant additional expertise is injected into local government because it is no longer a Cinderella service starved of funds; it handles a vast amount.
I am grateful to Members who contributed. The reason for the speedy passage of the legislation is the proposal has been around since 2001. It is a good proposal and business interests are anxious to get on with the process, as Deputy Crawford mentioned. We are enabling a new partnership between local government and businesses from which everybody will benefit.
Séamus Pattison (Carlow-Kilkenny, Labour)
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As it is 7 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for the Environment, Heritage and Local Government for Committee Stage and not disposed of are hereby made to the Bill; in respect of each of the sections undisposed of, that the section or, as appropriate, the section, as amended, is hereby agreed to in Committee; the Title, as amended, is hereby agreed to in Committee; the Bill, as amended, is, accordingly, reported to the House; Fourth Stage is hereby completed and the Bill is hereby passed."