Disquiet with Councils Amongst Cork Businesses
23rd November 2010
Cork Chamber has called on both Cork City and Cork County Councils to reduce commercial rates for 2011, highlighting the considerable disquiet within the business community following the decision not to reduce Commercial Rates in 2010, in addition to earmarking 5% of rates revenue for regional economic stimulus measures.
According to Mr Ger O’Mahoney, President of Cork Chamber, “While the Chamber notes the distressed financial situation of the Councils for 2010, insufficient cognisance of the equally distressed finances of the rate payers was not considered by the Councils. 40% of respondents in the most recent Cork Chamber economic survey stated that commercial rates are affecting the future viability of their business. It is time that Cork City and County Councils reflected the changed economic circumstances and protect employment by reducing their rates. Our Councils need to do everything in their power to secure jobs and support enterprise in Cork”.
“With the councils experiencing cost reductions and income increases through initiatives such as NPPR, it is imperative that local authority rates and charges are brought into line with cost reductions in other aspects of the economy. Over the last 24 months, we have seen tangible improvements in the competitiveness of unit labour costs, significant falls in property costs and industrial electricity costs, yet the impact of general deflation has not been seen in reduced rates and charges”.
Mr O’Mahoney stated, “This issue is critical for our members and Cork’s competitiveness. Businesses do not object to paying their fair share for local authority services, but just 4% of our members feel they get value for money for the rates they pay. In light of this it is essential that an annual breakdown of how the rates income is spent is sent to businesses along with their bill. Cork Chamber is specifically calling for 5 per cent of rates income to be ring fenced and reinvested in targeted economic development activities, including place marketing measures to strengthen Cork’s identity as well initiating targeted measures to protect enterprise and business activity and foster future economic development”.
“Businesses are facing significant challenges, with many companies having downsized in the last two years, in addition to recording notable decreases in turnover. A reduction in rates and local authority charges in 2011, in addition to targeted economic stimulus measures is crucial in the context of the substantial pressure on businesses to control costs and retain employment and investment”.
“The business community is also disturbed by government’s lack of vision in clarifying and strengthening local government, in addition to providing an adequate and equitable funding to local authorities. Commercial rates and local authority charges levied on business, coupled with drastically reduced levels of funding from central government to local authorities runs contrary to government’s stated objectives on job creation and investment. Since 1984, the business sector is the sole surviving rate payer and central government is the culprit for the situation”, continued Mr O’Mahoney
Mr O’Mahoney concluded by saying, “Unless government introduces new broad-based revenue streams for local authorities in Budget 2011 to alleviate the burden on the business community as a funder of last resort, it runs the risk of being the catalyst in the deterioration of local government. Government must move forward with the significant cost containment strategies identified in the Local Government Efficiency Review Group. It is now critical that these recommendations are implemented as a matter of urgency and Cork Chamber is calling for the cost savings which can be achieved to be passed back to businesses in the form of reduced rates and other charges”.
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