Councils forced to write off €500m in rates

Local authorities across the country have been forced to write off at least €500m in commercial rates over the course of the recession as businesses collapse under the weight of their debts.

Figures released by the Department of the Environment and Local Government Minister Phil Hogan show that between 2006-2011 alone, councils wrote off almost €430m.

Dublin City Council was forced to discount more than €71m of the total commercial rates it was entitled to over those years, while Cork County Council missed out on €32m.

Between Galway City and County Council areas, the total is more than €34m.

The total annual national write-offs have increased rapidly since the recession took hold firmly in 2008. At that point the total was almost €48m. In 2009, it was almost €65m and in 2010 almost €89m. By 2011 it had escalated to €116m.

A Department of Environment spokesman said it could not provide figures for 2012, as they have not yet been fully audited. However, they are likely to add significantly to the monies already lost.

The detailed list of figures for each of the local authorities show some have fared much better than others in terms of the loss of commercial dues.

For example, Kildare Country Council has not declared a write-off in any of the six years detailed by Mr Hogan. Meath County Council only declared its first write-offs of the period in 2011.

Mr Hogan’s department said that as with all local charges, “the invoicing and collection of due amounts is a matter for the local authority concerned to manage in the light of prevailing local circumstances and in accordance with normal accountancy procedures”.

The department’s spokesman said councils were not writing off commercial rate debts lightly and would only do so if there was no possibility of collection, as that money was not lost to the overall exchequer, but to their own budgets for the day-to-day running of local authority areas. He also pointed out that when businesses went to the wall, the banks would often be foremost on the list of creditors.

Fianna Fáil environment spokesman Barry Cowen acknowledged that in a lot of cases companies have gone out of business. However, he said the “archaic” system of setting commercial rates did not help.

In recent days, he brought a bill before the Dáil calling for “town teams” to be set up in each local authority to implement town revitalisation plans aimed at breathing life back into “dilapidated” town centres. A key part of the bill was a demand for a revamp of the commercial rates system.

Mr Cowen said he has been told that in Dublin alone there are up to 9,000 appeals undecided as regards the revaluation of commercial rates.

“[The figures] serve to highlight the crisis in this area,” he said.