Written answers

Thursday, 7 November 2013

Department of Environment, Community and Local Government

Commercial Rates Issues

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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147. To ask the Minister for Environment, Community and Local Government his views on the action that can be taken to deal with high commercial rates and assist small businesses (details supplied). [47516/13]

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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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 for 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. Rates income is a very important contribution to the cost of services provided by local authorities such as roads, public lighting, development control, parks and open spaces. Locally elected members adopt the annual rate on valuation they consider necessary in order to provide the required services.

I am acutely aware of the pressures on businesses at the present time. Local authorities have been asked by my Department to exercise restraint or, where possible, to reduce commercial rates and local charges for 2013. Local authorities have responded well to such requests in recent years and in 2013, 87 out of the 88 rating authorities have either reduced their ARV or kept it the same as in 2012. The reorganisation of local governance structures, set out in the Action Plan for Effective Local Government – Putting People First and to be given effect through the Local Government Bill 2013 currently before the House, provides an opportunity to achieve a more coherent approach to rates and charges on a county-wide basis having regard to funding requirements and the need to support employment and business competitiveness.

Local authorities have a leading role in creating a pro-enterprise supportive environment to generate new jobs and sustain existing ones. They are committed to local economic development, and are best placed to meet many of the needs of businesses, in terms of infrastructure, local promotion and other key enabling measures. Under the Action Plan for Jobs, the local government sector has developed a sectoral strategy, Supporting Economic Recovery and Jobs – Locally,to promote employment and support local enterprise, including measures in the area of business charges, local enterprise and business support arrangements, procurement support, local development and community-based initiatives, the Green Economy and participation in employment support schemes.

As is evident from the local government sectoral strategy and the 2008 Forfás report, the cost of running retail operations in Ireland, commercial rates, on average, account for less than 5% of overall business costs. Notwithstanding this, I will continue to keep the approach to rates by local authorities under active review, and am determined that every avenue will be pursued to optimise efficiency and contain costs in the local government sector.


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