Dara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Environment, Community and Local Government the measures he has implemented to improve competitiveness in relation to commercial rates and water rates; and if he will make a statement on the matter. [37404/12]

Dara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Environment, Community and Local Government his policy on commercial rates and water rates; and if he will make a statement on the matter. [37415/12]

Nicky McFadden (Longford-Westmeath, Fine Gael)
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To ask the Minister for Environment, Community and Local Government when a re-evaluation of commercial rates will take place; and if he will make a statement on the matter. [38445/12]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I propose to take Questions Nos. 1004, 1005 and 1098 together.

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, determined by the Valuation Office, 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.The Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State on a county by county basis. The purpose of the revaluation process is to provide for more consistent and up-to-date valuations for rating purposes and to assist in providing a more equitable distribution of valuations across those liable to pay rates.

The Commissioner, in consultation with my colleague, the Minister for Public Expenditure and Reform, has been reviewing various options for streamlining the valuation process and speeding up the national revaluation programme. In this regard, the Government agreed to the drafting of an amending Bill and the Minister for Public Expenditure and Reform recently published the Valuation (Amendment) (No. 2) Bill 2012.

Commercial rates income makes a significant contribution to the current funding requirements of local authorities. Rates provide the means by which local authorities can fund the services essential to communities, and therefore business, across the full range of local activities including roads, water and waste services, fire and emergency, libraries and a range of community, amenity and social activities.

I have, however, asked local authorities to exercise restraint in setting their Annual Rate on Valuation (ARV) in the context of the adoption of their 2012 budgets. From the adopted Budgets for 2012 submitted to my Department by the 88 rating local authorities, 68 authorities have maintained their ARVs at 2011 levels and 19 local authorities have reduced their ARVs. One local authority has increased its ARV and will continue to increase it until 2015, but this is a technical adjustment and legal requirement following the extension of a town boundary. Overall, the average change of ARV from 2011 to 2012 shows a decrease of 0.31%.

I recognise that these are difficult economic times for many businesses and I will continue to keep all matters relating to rates under consideration in my Department.

In relation to water charges, local authorities are required to recover the cost of providing water services from all non-domestic users of these services. This is in accordance with the polluter pays principle and the requirements of Article 9 of the EU Water Framework Directive. The policy provides for full cost recovery without profit, with charges based on actual metered consumption. The cost of providing water services to the non-domestic sector includes elements of infrastructure provision including meter installation and operation and maintenance costs, and varies from authority to authority. The Programme for Government provides for the introduction of a fair funding model to deliver clean and reliable water. The Government considers that charging based on usage is the fairest way to charge for water and it has therefore been decided that water meters should also be installed in households connected to public water supplies.

The Government has also decided, based on the recommendations of an independent assessment and in line with the commitment in the Programme for Government, to establish a public water utility company, Irish Water, to take over the operational and capital delivery functions of local authorities in the water services area. The establishment of Irish Water will improve the efficiency and effectiveness of water services delivery and ensure competitively priced water services are made available to users of these services.