Firms likely to bear brunt of funds freeze

BUSINESS property owners pay up to two-thirds and more of the annual budget of some local councils.

Although the cases of Killarney, Naas and Skibbereen are quite extreme businesses in counties Louth and Longford contribute less than 6.5% of the council budget most business owners believe their commercial rates are relied on too much by local government.

Figures from the Chambers of Commerce of Ireland show that just under a quarter of the average local authority's annual spend comes from commercial rates. This year, Irish businesses will pay almost €750 million in rates to their local town, city or county council.

The Government coffers will provide €420m next year the same figure as last year to the same local authorities to assist with the €3.2 billion cost of their day-to-day services .

The Department of Local Government has yet to allocate the funding but councils will not be holding their breath over any potential increases. It is increasingly likely that the business community will suffer the most, particularly as there is no limit on the level at which local authorities can increase their commercial rates.

With most councils facing shortfalls in their budget of millions of euro Mayo County Council reportedly needs to raise 20 million from local charges and rates things are looking gloomy.

Limerick City Council, which has no domestic refuse charges but levies the highest commercial rates in the country, said there will almost certainly be consequences from the fund freeze.

"Obviously, there will be a knock-on effect if income is not increasing while costs are. It's a difficult process for us and for businesses but we are trying to minimise the level of increase," said the council's head of finance John Field.

A Dublin City Council spokesperson said: "The lack of an increase in funding from central Government will have major consequences for all local government services."