Tuesday, 20 October 2015
Topical Issue Debate
I thank the Ceann Comhairle for the opportunity to bring this Topical Issue to the House. I thank the Minister of State for the changes made to the Valuation (Amendment) Act 2015, which exempt community child care facilities from paying commercial rates to local authorities, a major advantage to these very valuable child care facilities that provide great services to local communities. Many members of the House, including me, have lobbied on this issue for some years.
The Valuation Office is currently implementing the new provisions contained in the Act. From now on they will be of great benefit to voluntary community child care groups. However, they do not come into place until 2015 for 2016 rates. The Minister of State will appreciate the large amount of voluntary work that went into setting up and running these facilities. The expenses incurred have put significant financial pressure on these groups, yet despite this local authorities are still pursuing the collection of rates arrears.
The changes made in the Valuation (Amendment) Act 2015 imply that these facilities should not have been rated in the first instance.
Considering the major contribution made by the voluntary sector to child care, and in light of the recent budget and the new emphasis on expanding the service, we should consider issuing guidelines to all local authorities which would immediately allow them to write off outstanding rates. I understand this would have to come from the Department, and clarification on this matter would be of major assistance to these groups. It would allow them to get their finances in order and help them improve and expand their services.
Many of these facilities employ local women, who might work part-time, and they give back a significant amount to their communities. They also help women get back to work through providing affordable child care. The cost of these child care facilities is probably a little less than the cost of other child care facilities. They provide an all-in-one service as they are usually open very early in the morning and also provide after-school care for children. This is a great facility for parents who work, many of whom travel long distances and are not home until 7 p.m. It is a significant onus on them.
These are not-for-profit organisations which are barely keeping going. Some of them are looking at expanding in light of the budget announcement last week and will do so over the coming years. Many of them throughout the country are in arrears with rates and while they are trying their best to pay them, it would be a great relief and a major burden off their shoulders if we could address this issue and give clarification on it to the local authorities. I am sure they would be happy to do it, but it is outside their remit in some regards because all they do is collect the rates. Will the Minister consider giving clarification to the local authorities that it would be acceptable for them to allow these facilities not to pay their arrears in light of the new valuation legislation?
I thank the Deputy for raising this matter and I am replying on behalf of the Minister, Deputy Kelly. 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 Commissioner of Valuation has sole responsibility for all valuation matters. The Valuation Act 2001 comes under the remit of my colleague, the Minister for Public Expenditure and Reform.
I am aware the Minister for Public Expenditure and Reform included an amendment in the Valuation (Amendment) Act 2015 to provide for an exemption from rates for properties occupied by parties that provide early childhood care and education on a not-for-profit basis. This extension of the child care and education exemption removed an anomaly that existed whereby those that provided child care and education on a charitable basis were exempt but those that did so on a not-for-profit basis were not.
I understand the Valuation Office is in the process of updating valuation lists to give effect to this extension of the exemption so it will be effective for qualifying providers in 2016. The Valuation Offices interpretation of paragraph 10 of Schedule 4 of the Valuation Acts 2001 to 2015 means that those that only provide the early childhood care and education scheme are also exempt from rates.
The levying and collection of rates are matters for each individual local authority. In accordance with section 29 of the Local Government Act 1946, as amended, local authorities are obliged to make one rate for the whole financial year. This must be levied upon those liable for rates according to the valuation of each premises contained in the latest valuation list transmitted by the Commissioner of Valuation at the time of the adoption of the budget by the council. The annual budget is adopted before the start of each financial year. Rates bills issued to ratepayers in the current year are not subject to amendment by any alteration of valuations within that year. These remain a liability for the business under ratings legislation and it is a matter for the local authority to manage the collection of any outstanding debt.
Commercial rates income makes a significant contribution to the current funding requirements of local authorities. However, local authorities recognise that these are difficult economic times for many businesses, and they work closely with ratepayers experiencing difficulty in the payment of commercial rates. In this regard, local authorities are facilitating the payment of commercial rates by instalments and will work with businesses to put in place flexible payment options that reflect the capacity to pay.
I thank the Minister of State for his response. I also compliment the local authorities, which are very flexible, and I understand that rates make a significant contribution to paying for the cost of footpaths, lighting and all of the other great facilities our local authorities provide. However, my understanding is that according to the Valuation (Amendment) Act 2015 there was an anomaly and these facilities should never have been rated. While I appreciate it is the job of local authorities to collect the rates, they can only collect those covered by legislation.
Will the Minister consider writing to the local authorities to state that where community child care facilities are in arrears, they should not have to pay them because of the extra strain? I am very much aware the local authorities are very flexible in helping businesses to pay their rates, particularly in light of the economic times we have all come through, but these are not-for-profit facilities which are now exempt from rates. There was an anomaly in the legislation which unfortunately took quite a number of years to rectify. I appreciate what the Minister has done in clarifying this, finally, after much lobbying. I again ask whether it is possible for the Minister to consider writing to the local authorities and asking them to waive these arrears.
As I stated in my introductory remarks, 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 Valuation (Amendment) Act 2015, to which Deputy has referred, is under the remit of the Minister for Public Expenditure and Reform. It provides for an exception from rates for properties occupied by parties which provide early childhood care and education on a not-for-profit basis.
The Minister welcomes the extension of the exemption to not-for-profit child care, as it will bring a consistency of approach to a subset of the child care sector while respecting the principle that those who operate with the intention of making a profit remain rateable. As I stated, this exemption will be reflected in the ratepayers' bills from 2016. With regard to the outstanding rates to which the Deputy referred and the liabilities which accrue and are owed by businesses which will become exempt or partially exempt in future, the management of the collection of this debt is entirely and solely a matter for the local authorities. This is the situation. The Minister and the Department do not have a direct role in this. It is a matter for the local authorities. While I am sympathetic to what the Deputy has outlined, those businesses should engage with the relevant local authority in respect of the liabilities.