Ciarán Lynch (Cork South Central, Labour)
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Question 397: To ask the Minister for the Environment, Heritage and Local Government if consideration or direction has been given to local authorities to reduce rates for 2011 in view of the adverse trading conditions experienced by many businesses; his plan to require local authorities to compensate businesses such as restaurants, which have suffered losses when the local authority was unable to provide essential services such as a consistent water supply; and if he will make a statement on the matter. [3327/11]

Éamon Ó Cuív (Galway West, Fianna Fail)
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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 levying and collection of rates are matters for each individual local authority. The Annual Rate on Valuation (ARV), which is applied to the valuation of each property to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function of a local authority.

However, my predecessor consistently urged local authorities to exercise restraint in setting rates in their budgets in order to support competitiveness in the economy, nationally and locally, and to protect the interests of communities. A significant number of local authorities accordingly decreased their ARV for 2010 while the majority kept the same rate as 2009. I expect the same positive response from the sector this year and the information obtained by the Department to date in respect of 2011 suggests this trend is continuing.

Local authorities recognise that these are difficult economic times for many businesses and have taken a number of initiatives to promote and support enterprise and economic development, including in particular the establishment of business support units or equivalent arrangements in each county and city council.

In respect of water, the Government's Water Pricing Policy requires local authorities to recover in full the cost of providing water services from non-domestic users of these services. The implementation of the Pricing Policy is in line with the requirements of the European Union Water Framework Directive. Under this Directive, Member States are required to recover in full the cost of providing water services from the users of these services by 2010. Water charges are based on metered usage.