Written answers

Thursday, 6 April 2017

Department of Housing, Planning, Community and Local Government

Commercial Rates

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
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60. To ask the Minister for Housing, Planning, Community and Local Government his views on the 10% increase in the commercial rates burden on average across local authorities since 2010 and his views on local authorities increasingly over relying on commercial rates revenue; and if he will make a statement on the matter. [17117/17]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The local authority funding model has changed considerably in recent years principally as a result both of the introduction of Local Property Tax (LPT) in 2013 and the establishment of Irish Water. The Local Government Fund, through General Purpose Grants (GPGs), historically provided local authorities with finance for funding some of their day-to-day activities, including elements of water services costs. In 2014, certain water services costs were moved to Irish Water, resulting in a reduced funding requirement for local authorities from the Local Government Fund and, in 2015, LPT allocations to local authorities replaced GPGs. Local authorities now receive funding from Irish Water for services provided under service level agreements.  Local authorities also receive significant other funding, current and capital, from my Department and from other Departments and agencies for a range of activities, such as housing and the maintenance of non-national roads, for example. While capital funding levels declined in line with the national economic circumstances, they have now started to increase significantly again.

The combined impact of these changes is that income proportion figures from 2010 are, therefore, not directly comparable to more recent years.

The levying and collection of rates is a matter for each individual local authority. The annual rate on valuation (ARV) is decided by the elected members of the local authority as part of the annual budget based on what level of income is considered necessary in order to provide the required level of services.  My Department has in recent years requested local authorities to exercise restraint in setting, and where possible to reduce, ARVs and they have responded positively in this regard.  The national average ARV decreased each year from 2010 to 2014; 2015 and 2016 are not directly comparable due to local authority mergers and the necessity to harmonise rates across new local authority areas.

It is important to note that, while income from commercial rates in 2015 makes up an increased proportion of local authorities' income compared to 2010, the actual quantum of rates income has not increased significantly in monetary terms from 2010 (€1.43bn) to 2015 (€1.496bn).

Further details of the funding available to local authorities is reported in the Chapter of the Comptroller and Auditor General on Central Government Funding of Local Authorities, the most recent of which is available at:

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