Council urged to Demonstrate Fairness in Budget 2014

2nd December 2013

Cork Chamber, while acknowledging the difficult fiscal challenges facing Cork County Council, has urged the local authority to demonstrate fairness towards Cork’s business community in the run-up to their 2014 Budget and ensure that there is no increase in rates at a minimum for 2014, when the Budget is struck on December 13th.

Reflecting on the discussions which took place at last week’s Council meeting, Cork Chamber CEO, Conor Healy stated, “We are currently at a turning point and the long-awaited green shoots are finally beginning to appear. If rates are increased, it will have a devastating impact on business confidence in the region, which according to the Chamber’s most recent economic trends survey is up 12% from Q3, 2012. Commercial rates impose a significant cost on businesses, many of whom are already struggling to remain competitive”.

“Even more worrying, is the ever increasing reliance of local authorities on business sources to fund their operational costs. Rates revenue continues to account for a growing proportion of the overall local authority budget, while the local government fund (LGF) continues to steadily decline. Commercial rates now account for 33.6% of Cork County Council’s total income while government funding accounts for just 11.1%”.

Mr. Healy continued, “While no-one doubts the pressure that the County Council is under, what is key now, is that Budget 2014 is designed and structured in a way that achieves two key goals. Firstly, the budget must reduce business costs to facilitate improved competitiveness. This is an essential catalyst to trigger growth and generate employment and sends a clear message that Cork is a competitive location in which to do business. Secondly, Government must ensure that local authorities are appropriately funded and that dependence on rates funding is reduced. Commercial rates remain one of the most substantial fixed costs for businesses and for many years it has been the business community that has shouldered the responsibility for funding local services through the rates system”.

“The Local Property Tax (LPT) has now been introduced and must result in a fairer and more equitable system. What we need to see is the extra revenue being raised though the LPT being placed in the Local Government Fund and leading to targeted reductions in commercial rates. A proportion of the LPT income should be ring-fenced for local services and local development needs. It is imperative that savings achieved through local government reform are passed to those within the business community that have experienced the harshest consequences of the economic downturn”, concluded Mr. Healy.

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