Barry Cowen (Offaly, Fianna Fail)
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748. To ask the Minister for Jobs, Enterprise and Innovation if her Department or a body under its aegis has undertaken any research on the costs imposed on small to medium businesses of commercial rates; if so, the central findings of this research; and the estimated average cost of commercial rates in different local authorities for various sized businesses. [4275/17]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Improving Ireland’s competitiveness position is a key economic priority for Government. As set out in 'A Programme for a Partnership Government', our objective is to protect our national competitiveness from unsustainable cost growth and to deliver a job-fit business environment which ranks in the top tier globally.

The most recent Costs of Doing Business Reportpublished by the National Competitiveness Council provides an assessment of Ireland's cost competitiveness performance vis-a-vis a range of competitor countries. It found that Ireland’s cost base has improved across a range of metrics over the last five years. This has made Irish firms more competitive internationally and made Ireland a more attractive location for firms to base their operations in. However, despite these improvements, the Council warns that Ireland is particularly vulnerable to external shocks beyond our control – external risks at the moment include in particular Brexit, oil prices and exchange rate movements. My Department and its agencies continually engage with relevant public and private stakeholders, as there is a role for both the public and private sectors alike to proactively manage their cost base and drive efficiency improvements.

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. Commercial rates form an important element of the funding of all local authorities. 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 their annual budget and its determination is a reserved function of a local authority.

As set out in the 2016 Action Plan for Jobs, the Department of Housing, Planning, Community and Local Government encouraged local authorities to exercise restraint in adopting the Annual Rates on Valuation and, where appropriate, the Base Year Adjustments for 2016. It encouraged local authorities to provide to the greatest extent possible certainty for commercial ratepayers in terms of the impact harmonisation may have on their rates bills in future years.

Following the reorganisation of local government structures arising from the Local Government Reform Act 2014 there are 31 local authorities which adopted an Annual Rate on Valuation (ARV). 11 local authorities are not affected by rates harmonisation measures provided for in the Local Government Reform Act 2014. This is due to those local authorities either having amalgamated prior to establishment day under separate amalgamations, or due to there being no former town or borough councils in the local authority area. Two of these local authorities (Galway City Council and Limerick City and County Council) increased their ARV for 2016 and nine adopted the same ARV in 2016 as in 2015. The average increase in ARV for this group of local authorities was 0.46%. The remaining 20 local authorities are required by law to harmonise their rates through implementing the Base Year Adjustment (BYA) process. In 2016 of 74 former rating authority areas within the 20 local authorities subject to the BYA, ARVs have increased by an average 3.07% in 40, decreased by an average 1.12% in 17 and remain unchanged in a further 17. This equates to an overall average increase of 1.4% in commercial property rates.