Batt O'Keeffe (Cork South Central, Fianna Fail)

This scheme is working very effectively.

Local authority costs are driven by economic and population growth, the costs of maintaining an expanding public infrastructure, community and social needs, higher environmental standards and higher quality of life expectations. The Government is aware of the demands on the commercial sector and the need for continued and improved competitiveness to support Ireland's small open economy. Local authority charges are obviously a relevant factor in this. The level of funding made available to local authorities through the local government fund has had the effect of dampening the extent of demands on the commercial sector through rates and charges. In 1993, rates contributed 17% of total current and capital income of local authorities. The figure today is closer to 12.5%. When local authorities were adopting their budgets for 2006 at the end of last year, the Minister for the Environment, Heritage and Local Government requested that in order to support competitiveness in the economy and to protect the interests of communities, local authorities should ensure that they exercise restraint in setting any increases in commercial rates and local charges for the year.

The response to this request was very positive. To a large degree, local authorities exercised significant restraint in 2006 by imposing fewer increases than in previous years. In its 2006 budget, Limerick City Council adopted a reduction of 0.5% in its annual rate on valuation. This was a first in recent decades. To take the example of Longford again——