Councils take big cash hit as firms collapse
Tens of millions lost through fall in rates income
Published 10/01/2010 | 05:00
THE collapse of thousands of businesses is eating into the coffers of local authorities -- councils across the country lost tens of millions of euro last year after the recession forced record numbers of companies to close their doors.
This financial squeeze comes at a time when authorities are grappling with a grit shortage which has paralysed the nation's roads and brought the country to a standstill.
Nine local authorities alone saw the value of rates collected between them dive by over €11.5m last year, according to figures given to the Sunday Independent. In many cases, the value of commercial rates collected by local authorities last year has dived by between five and 10 per cent.
Laois -- home to Fine Gael's justice spokesman, Charlie Flanagan -- is among those worst hit. Laois County Council collected €7.8m in commercial rates last year -- about 10 per cent less than in 2008.
Cork -- ravaged by floods last November -- is also feeling the pinch. Cork City Council swallowed a €2.5m dip in its rate income last year.
The latest figures from Wicklow County Council show that it pocketed €12.5m in commercial rates in 2009 -- about €1m less than in 2008.
Monaghan County Council collected €4.9m in rates last year compared to €5.3m in 2008; Cavan County Council collected €8.6m -- down from €9.07m in 2008; while Louth County Council collected about five per cent less in rates than it did in 2008.
Cavan County Council largely attributed its fall in rate income to the economic downturn. "Businesses are finding it difficult -- especially those dependent on the construction and hospitality sectors, such as hotels, public houses and the motor sector," said Gerry Maguire, a senior staff officer with Cavan County Council.
South Dublin County Council collected about €2.5m less in rates last year, while Fingal County Council saw the amount collected dip by €2.4m. The amount of rates collected by Kildare County Council fell from €36.7m in 2008 to €35.6m last year.
"Local authorities are not immune to the effects of the downturn in the economy," said a spokesman for the Department of the Environment. "While there are pressures on resources at all levels, local authorities are prioritising their expenditure to focus on essential services and maximising the use of all resources available to them."
Shaun Quinn, chief executive of Failte Ireland, said that local authority rates were not sustainable for many businesses. "Many tourism businesses have cut down their costs but going into 2010, there are still big concerns about local authority rates," said Mr Quinn.
"You can't charge rates that are not sustainable."
Chambers Ireland said that local authority rates were "a continued gripe" for businesses. "There has been a significant shake up in the base for commercial rates and water charges because of the recession, and this is feeding its way through to the income of local authorities," said Sean Dunne, deputy chief executive of Chambers Ireland. "Some local authorities, however, are cutting their charges in recognition of the challenges to business in the current climate."
Among the local authorities that bucked the trend were county councils in Kerry, Westmeath and Waterford -- all three recorded a slight increase in rate income last year. Four companies a day went out of business in 2009 and this trend is expected to continue into 2010.