Joanna Tuffy (Dublin Mid West, Labour)
Link to this: Individually | In context

Question 190: To ask the Minister for the Environment, Heritage and Local Government the steps he will take to ensure local authorities are not imposing rates on businesses that in view of the economic downturn are not sustainable for businesses to pay; and if he will make a statement on the matter. [5459/09]

John Gormley (Dublin South East, Green Party)
Link to this: Individually | In context

Rates are local property taxes that are levied by local authorities on commercial properties that are rateable under the Valuation Act 2001. The determination of the annual rate on valuation which is applied to property valuation to calculate rates is a decision taken locally by the elected members of a local authority in their annual budget and I have no function in this matter.

For 2009, I have allocated €935 million in General-Purpose Grants to local authorities from the Local Government Fund. These grants are a significant contribution to the current funding of local authorities. In allocating these grants, I specifically requested that local authorities again exercise restraint in setting any increases in commercial rates in their 2009 Budgets, in order to support competitiveness in the economy, nationally and locally, and to protect the interests of communities. Local authorities have responded positively to previous requests for restraint and, in light of the current, challenging environment for business, I strongly urged that they continue this restraint. This year, local authorities have again responded positively to this request and the national average increase in annual rates on valuation is 1.15%.

Many initiatives have also been undertaken in recent years to support efficiency and value for money in the local government sector, including the new financial management systems, multi-annual capital investment programmes, value for money auditing, expanding e-enablement and the new costing system which will facilitate authorities in assessing their unit costs over time and in comparing costs, on an appropriate basis, with other local authorities. In addition, the establishment of audit committees with a wide remit and financial expertise will, over time, further improve efficiency and value for money in local authority operations.

I have also asked elected members and management of local authorities as part of the 2009 budgetary process to continue to widen and deepen their examination of the scope for efficiencies and rationalisation of expenditure arrangements in all service areas in 2009.

The sources of funding for local authorities are being broadened with the introduction of a new charge to be levied on the owners of non-principal private residences. The new charge will come into effect during 2009. I will bring forward legislation at an early date to give effect to the new charge.