Cork Council services to take a hit after Government rate cuts to large companies

Cork County Council may be forced to cut its services after the Government decided some of the country’s largest companies are paying excessive rates.

The council was told the companies would have their rates bill reduced by €1.852m next year.

The Government has said it will provide the local authority with a one-off rebate of €1.3m to help negate the loss.

But it still leaves the council with a €500,000 shortfall next year, as well as finding €1.85m in 2017.

Fianna Fáil councillor Kevin O’Keeffe had standing orders suspended at a meeting in County Hall to discuss the fallout.

He said the Government should be more accountable for the move, while his party colleague councillor Seamus McGrath said it represented “a serious hit”.

He said the “impact for future years will be grave unless the Department of Environment compensate local authorities for the loss”.

“These are cuts to rates for the big companies. These are not the high-street butcher or baker,” said Sinn Féin councillor Donnchadh Ó Laoghaire. “This is a rates cut for big business.”

“These are mega-rich companies making large profits. Will they pass on the savings they’ve made now to their customers?”said Fianna Fáil councillor Frank O’Flynn.

“I assume that these companies are controlled by regulators and these savings will be passed onto consumers.

“I accept the concern that the Government commitment to pay back €1.3m only covers next year,” said Fianna Fáil councillor Gerard Murphy.

Council chief executive Tim Lucey said the income reduction in rates from 2017 onwards concerned him as it was also intended the staff payroll would be increasing by then.

“The fact is we have a net reduction of €500,000 next year and in 2017 we will be down €1.852m,” said Mr McGrath.

Mr Lucey said the loss of that money could be recouped with a 2% rate rise for other businesses. But he said his hands were tied as the council had decided not to increase rates for the next five years.

He hoped there could be an increase in buoyancy in the economy which might launch more new businesses and, possibly, increase the rates income. However, less optimistic councillors believed the shortfall would probably lead to a reduction in some of the services they provide the public.

Following a proposal by Mr McGrath it was agreed to write to the Government to seek more money to compensate for the loss of revenue.

“The department must make up the shortfall in funding over the next number of years,” he said.