Local authorities can't keep turning to retailers to balance their books

Councils considering rates increases are tone deaf to the scale of retail job losses, writes RGData's Roseanne Regan 

Commercial rates account for more than 30% of Cork City Council's income. Picture: Chani Anderson

Across Ireland, retailers are facing the shuddering reality that some local authorities are gearing up to impose further charges on already hard-pressed businesses.

A recent example is Cork City Council, where councillors are considering a 7% rates rise on top of the 5% increase imposed last year.

Meanwhile, Cork County Council has approved a 7.25% increase in its underlying commercial rate, following considerable opposition from councillors.

These increases are being piled on top of an already crippling cost burden for retailers, including soaring energy bills and the rising cost of employment. Commercial rates account for more than 30% of Cork City Council's income. 

Treating high-street businesses as an endless source of funding creates a real risk of undermining the very enterprises that support local economic resilience and keep our towns and cities alive.

Local authorities and central government need to wake up to the corrosive impact of continually imposing additional costs on businesses. Between 2023 and 2026, retail employment fell by more than 30,000 jobs — a shocking loss for one of Ireland's key service sectors. 

These losses come against a backdrop of years of additional costs being loaded onto retailers by both central and local government. The national minimum wage will have increased by nearly 50% between 2020 and 2027. 

Over the same period, retailers have faced higher insurance premiums and energy costs, sick pay obligations and now pension auto-enrolment.

Yet some local authorities believe businesses can simply absorb another increase in commercial rates. Where exactly do they expect the money to come from?

Every week, I speak to independent grocery and convenience retailers who express high levels of frustration at how some local authorities operate. While many councils work constructively with businesses, others are making decisions that add to the pressures facing local shops.

One Cork City retailer recently raised concerns with me about crime and antisocial behaviour, rising parking charges and the growing number of vape shops in the city centre. 

He questioned whether his business was receiving value for the substantial commercial rates it pays.

Retailers elsewhere raise similar concerns about parking enforcement, traffic restrictions and active travel schemes that can make it more difficult for people to access local shops.

Investment in public spaces and active travel can bring real benefits, but councils must properly engage with businesses and consider the impact on local trade. There is little point spending millions regenerating a town centre if the businesses that give it life can no longer afford to operate there.

Business owners also deserve greater transparency about how their commercial rates are spent. They need assurance that local authorities are delivering value for money and doing everything possible to control costs before asking businesses to pay more.

Roseanne Regan: 'Unless Government, both locally and nationally, changes its approach to funding local services and the costs imposed on businesses, the retail job losses we have already seen could be just a drop in the ocean.'

While the Public Accounts Committee scrutinises central government spending, there is a strong case for more rigorous oversight and accountability of local authority finances.

The National Oversight and Audit Commission (NOAC) was established in 2014 to provide independent oversight of local government. But so far, it has been a largely silent witness to the activities of local authorities. 

It is difficult to identify significant examples of NOAC acting as the fearless and effective watchdog that businesses paying substantial commercial rates should expect.

The wider cost burden on retailers needs a national response, rather than leaving individual local authorities to impose further charges on businesses. Government must recognise the cumulative impact of charges imposed by central government, State agencies and local authorities, and take immediate action to halt further increases.

Where local authorities face genuine funding shortfalls, the exchequer must examine how it can provide additional support. The endless practice of expecting small businesses to be the funder of last resort needs to stop.

RGData is calling on local authorities across Ireland to freeze commercial rates for 2027. Cork City Council should abandon its proposed 7% increase, while Cork County Council must ensure its waiver scheme protects independent grocery and convenience retailers from higher rates bills. 

What's your view on this issue?

You can tell us here

We also want stronger central oversight of local authority finances and meaningful engagement with businesses on decisions affecting their ability to trade.

Something needs to give. Unless Government, both locally and nationally, changes its approach to funding local services and the costs imposed on businesses, the retail job losses we have already seen could be just a drop in the ocean.

• Roseanne Regan is director general of RGData, the representative association for independent grocery, convenience and forecourt retailers in Ireland