Town firms fret as council plans to hike charge

Despite the clamour from small businesses that rates increases could put many over the edge it’s the big boys who really foot the bill.

Just 30 businesses will pay one third of the €96m of the estimated rates collected in by Cork County Council this year.

The reality is that large pharmaceutical companies, Irish Distillers, ESB, and Bord Gáis are among the big contributors to the rates which represent 34% of the total the council spends on services in the region.

The council’s rate stands at €74.75 per euro of the property’s rateable valuation, and the charge has not been increased since 2008.

The system is archaic, dating to the late 1800s, and is being reviewed at present.

But in the meantime the county rate is higher than anything levied by the nine town councils allowed to impose the charge, of which Mallow is the cheapest at €57.88.

The nine town councils are expected to take in an additional €10m in rates this year.

Ger Power, the county council’s head of finance, said the local authority had not increased its rates for five years as it was acutely aware some businesses were struggling.

Despite the economic climate, the local authority has had an exceptional collection rate each year since, well in excess of 90%.

“Any ratepayer who has difficulties is asked to contact us and they usually engage. We will look at their case sympathetically if they are genuine and we can come up with a stage payment plan or extend the deadline for payment. We don’t impose any interest or penalties,” said Mr Power.

Town councils will be abolished next summer and from 2015 the rates will be set by the county council. This worries businesses based in the nine areas where charges are lower.

Mr Power said the proposal is “a harmonisation” of rates, which he admits is likely to mean the council rate is reduced by a small amount but businesses in the former town council areas face a significant increase.

He said increases could be introduced over a period up to 10 years, but added the county council would like to get countywide harmonisation achieved “earlier” though it would “wait and see what happened”.

“We are aware it’s going to be an issue, we know that. But we won’t impose a big burden on anyone in a short-term period.”

Mr Power said 65% of the county’s ratepayers pay less than €3,000 a year.

A total of 19% pay between €3,000 and €7,500, while a further 13% cough up between €7,500 and €38,000.

Just 2.8% are in the €38,000 to €375,000 bracket and the big boys, which represent just 0.2% of all businesses in the county, each pay more than €375,000 per year.

Cork Regional Chambers has pleaded with the county council to commit to a period of adjustment of 10 years for businesses presently paying charges to town councils.

It maintains businesses must be allowed reasonable period of time to adapt to the costs incurred from increased rates.

The group pointed out that the Department of the Environment’s recent guidance document proposes that, in such areas, there should be a period of adjustment of between three and ten years.

It also raised concerns that the funding formula for a general municipal allocation (under the Department of Environment guidance document) includes “a perverse incentive for municipalities to increase the cost of car parking”.

It says this will only serve to harm retailers and other businesses located within town centres that do so much for local employment and local communities.

The figures

Cork County Council controlled areas have a rate charge of €74.75

The nine town councils apply their own rates:

Clonakilty €66.96

Cobh €71.53

Fermoy €61

Kinsale €65.11

Macroom €65.37

Mallow €57.88

Midleton €60.35

Skibbereen €69.84

Youghal €65.31

As former town commissioners, Bandon, Bantry, and Passage West town councils do not have the power vested in them to impose their own rates.