Savings from Local Government Reform must be passed on to Businesses

Chambers Ireland has today (08/10/12) called on the Government to deliver on Local Government reform. Speaking this earlier today, Seán Murphy, Chambers Ireland Deputy Chief Executive, said: “The Programme for Government made the reform of Local Government a major priority. We are calling on the Government to fully implement reforms in areas such as water charges, local property taxes and business rates and also in the structure of local government without any further delay.”

“Funding from Central to Local Government continues to fall. The percentage of Local Government funding from the General Purpose Grant and Non-National Roads has fallen from approximately 32.5% to 22.5% since 2005. Initiatives such as the Non-Principal Private Residence charge are to be welcomed; however, the revenue raised (€61.5 million approx in 2012) is insufficient to fill the gap left by the reduction in the General Purpose Grant.”

“Furthermore, evidence from Limerick suggests the savings envisioned from the merger of Local Authorities are far from certain. The Brosnan report, which recommended the merger of Limerick City and County Councils, identified upwards of €15 million in achievable savings arising from their integration. However, rate cuts promised to businesses in the old Limerick City Council area to match those of their out of town competitors have yet to be delivered. These reductions are desperately needed to give the same cost base to these struggling businesses. Lack of execution on this issue does not bode well for other promised restructurings elsewhere in the country.”

“Cost savings achieved by implementing a range of measures would go a long way to easing the pressure felt by business owners, who are currently responsible for a large proportion of Local Government budgets. These include:

• A fair ‘user pays’ approach to the provision of water;
• An equitable local property tax ring-fenced for local services;
• An acceleration of the revaluation process, with the introduction of self-assessment and external delivery options to achieve this; and
• The completion of already suggested mergers of Local Authorities and the passing of cost savings arising back to the business community via appropriately targeted rate reductions.”

“It is imperative that savings achieved are passed on to those within the business community who have experienced the harshest consequences of the economic downturn. Businesses cannot continue to be taxed at current levels. Instead they must be supported as much as possible so that they can continue to contribute to the economic recovery and provide much needed employment,” Murphy concluded.

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For further information contact Amy Woods, Chambers Ireland on 01 400 4319, 086 6081605 or email amy.woods@www.chambers.ie.

Notes to Editor
About Local Authorities recommended to merge under the Local Government Efficiency Review Group
The Local Government Efficiency Review Group reviewed the cost base, expenditure and numbers employed in local authorities its report was published in July 2010.

The report recommended the integration of the following 20 local authorities
• Mayo County Council and Roscommon County Council
• Sligo County Council and Leitrim County Council
• Waterford County Council and Waterford City Council
• North Tipperary County Council and South Tipperary County Council
• Cavan County Council and Monaghan County Council
• Longford County Council and Westmeath County Council
• Limerick County Council and Limerick City Council
• Carlow County Council and Kilkenny County Council
• Laois County Council and Offaly County Council
• Galway County Council and Galway City Council