Rates reduction for multi-nationals will force service cuts, say councillors

Cork County Council will have to cut services because it is going to be left with a €1.9m deficit in its budget after major multinationals got their rates reduced.

The move by the Government to cut some companies’ rates is to be resisted by county councillors who say their cash-strapped local authority can’t afford the cut to its revenue when they are trying to address a housing crisis and homelessness.

Cllr Des O’Grady, the SF leader on the council, received cross-party support when he said major telecoms, pharmaceutical, and services companies had their rates significantly reduced on foot a government move prompted by an EU directive.

The rates reduction was imposed last year, but the Government decided it would reimburse the council by €1.3m, leaving it with a deficit of €600,000.

Mr O’Grady got a suspension of standing orders at a meeting in County Hall to discuss the issue.

He said councillors would have to immediately lobby Minister Simon Coveney and his colleagues to get at minimum the €1.3m reimbursement reinstated.

“If we don’t get this money, then people are going to suffer,” he said.

Cllr Paul Hayes said it was a serious matter and pointed out that the council also had to run the motor tax collection system for the Government and didn’t get any reimbursement for that, so in total it was €2.5m out of pocket.

“These are extremely profitable companies which have got the reduction, whereas small businesses are struggling,” Cllr Melissa Mullane said. “We need the money. It’s very important because we have a homelessness and housing crisis.”

“There’s no way we can take this cut, communities will suffer. We’re hearing every day from Michael Noonan how well the economy is going. We should also write to the Taoiseach and minister for finance. No way we can square the budget books and provide all our services with this,” Cllr Frank O’Flynn said.

Cllr Kevin Murphy, the FG leader on the council, said they should make every effort to retrieve the money. “Why should we pay for what was a proposal which actually came from Europe,” he said. “We should also write to other councils around the country to get their support.”

Acting council chief executive Declan Daly said the council had already contacted the Government and “put down a marker by saying it’s unsatisfactory”.

Mr Daly said that other businesses need not worry that the council would rise their rates to make up for the loss. Mayor of County Cork, Cllr Seamus McGrath, they would write to different government departments as well and agreed with Cllr Des O’Grady that they also raise the issue with Fianna Fáil leader Micheál Martin.