City manager defends business rates

A 10% cut in Cork City Council’s commercial rates would do little to help struggling businesses, the city manager has insisted.

Such a cut would equate to a reduction of under €20 per week for 70% of the city’s 6,650 individual ratings businesses, with close to 40% of them benefiting to the tune of less than €6 per week, Tim Lucey said.

He made his comments last night as councillors were presented with figures from Sept/Oct which show a retail vacancy level of around 20% in the city centre area.

It follows a public spat between a district court judge and Mr Lucey over rates.

Judge Olann Kelleher spoke out after 170 rates cases were listed at Cork District Court, raising concerns that high rates were closing businesses.

Cllr Mick Finn tabled a motion at last night’s council meeting calling for a restructuring of rate levies.

While Judge Kelleher’s criticisms may have been misdirected, there was “substance” to them, he said.

“Rates are adding to the burden of business,” he said.

But Mr Lucey said: “I want to kill this notion that there is a correlation between the level of rates charged in this city, and businesses closing.

“The fact is that the two main retail streets in the city centre, St Patrick’s St and Oliver Plunkett St, are performing well, with a retail vacancy rate of 10.4%.

“That compares to a rate of 18.3% in Limerick’s O’Connell St and 18.1% in Belfast. The UK national average is 11.3%.

“Cork City retail is performing very well. Never let it be said that the city council closed a business. That will never happen.”

He said the council can schedule rates payments over several months for businesses experiencing difficulty.

And he said the council is effectively acting as a “banker” to some businesses by extending rates credit facilities.

He said changing the rates policy is a matter for government, but that if it was to change, the Government would have to find another source of funding to replace the €65m collected from the city’s rate-payers.

Lord Mayor Cllr John Buttimer said he regretted the judge’s comments and urged rate payers in difficulty to contact City Hall.

“It is in nobody’s interests to end up in court,” he said. Cllr Terry Shannon (FF) described the city’s rate collection system as “benevolent”, with officials “helping and cajoling” businesses to pay their rates on time.

“The last thing we want is to be in court, or closing down a business,” he said.

The council was granted 293 judgements in Cork District Court in 2011 in relation to rates arrears.

The number of judgments in such cases this year has surged to 372.