Business rates to increase by 3% across Cork county
Business rates will increase by 3% across Cork county as a new council budget for the region has been approved.
Although concerns were raised that any rate increase “would be a slap in the face” for already struggling businesses, overall the budget was hailed as “positive” and “very pro-community”, with most services being either maintained or improved.
Tim Lucey, chief executive of Cork County Council, said although the rate hike may be the headline from Budget 2022, it was a carefully thought-through budget. Business rates have not been increased for 14 years, despite inflation, he said. And as inflation grew by 9.24% in the last 10 years, the burden on rate payers had actually reduced, it was suggested. The only other option for raising the necessary revenue would have been to increase local property tax. It was argued a 3% increase would have no material impact on many businesses. Some 30% of businesses across Cork county currently pay less than €1,000 in rates annually, meaning they would pay on average €16.89 per year extra or 32c per week, the council said. For the 55% of businesses that pay rates of less than €2,000 a year, they would pay between €16.89 and €43.84 extra per year. And for the 70% that pay less than €3,000 per year, they would pay between €16.89 and €74.32 extra per year. But these additional charges would have a very meaningful impact on the council’s budget and what services it could therefore provide to the community, Lorraine Lynch, the council’s head of finance said. Overall expenditure has increased from €348.1m in 2021 to 372.5m in this coming year’s budget. Money brought in from business rates will increase from €112.5m in 2021 to €118.8m in 2022, providing 32.3% of the budget. Local property tax will remain the same as it was in 2021 at €17.1m. Increased costs due to Brexit and the pandemic, investment in public spaces, in climate action, increased activity across all services and increased investment in property and economic development meant the council had to find extra money for next year. The budget was prepared on a deficit basis of €4.1m. Additional government grant income of €9.7m will help fund social housing in the county. An additional €2m will go to the payments and availability scheme. From grants, the council will also increase spending on void properties by €750,000. There will also be an additional €300,000 raised from the planning fee. A number of councillors mooted changes to how business rates, known as the Annual Rate on Valuation (ARV), are calculated. The rates are currently based on the size of business premises and it was suggested that they should be based instead on profitability. Some councillors also said that the rate equalisation scheme introduced some years ago had meant rates had been increasing for businesses in many Cork towns in recent years so those businesses had not already benefitted from a rate freeze for the last 14 years. The council pledged to continue to support citizens and communities throughout the pandemic while ensuring the highest levels of service delivery. What’s your view on this issue? Commenting on the passing of the 2022 annual budget, Mayor of the County of Cork Cllr Gillian Coughlan said: “Cork County Council’s approach is one that is very conscious of the need to support the business sector and is designed to underpin the sustainability of communities. A number of important funding initiatives are being fully retained, such as the general municipal allocation for our eight municipal districts, ensuring continue supports are available for our county’s towns and villages. “Funding through the Economic Development Fund, which drives our tourism and strategic marketing initiatives as well as further town centre rejuvenation to address issues such as vacancy and dereliction has been ringfenced. Further investment will also follow into our rural digital innovation hubs, which are essential to the resilience of towns and will ensure balanced economic growth across Cork County.” Some of the initiatives in Cork County Council’s Budget for 2022 include:
Additional funding for the maintenance and improvement of local authority housing with provisions to refurbish in excess of 150 vacant properties during 2022;
€1.2m for the Economic Development Fund and to address town regeneration issues; and €8.2m for libraries;
A fund of €150,000 for the arts programme for creative towns and spaces.
The Climate Action and Low Carbon Development (Amendment) Act for 2021 commits Ireland to move to a climate resilient and climate neutral economy by 2050. Cork County Council Budget 2022 contains provisions for:
The public lighting efficiency project to retrofit upwards of 31,000 lights to LED by 2024, achieving at least 38% energy reduction and significant cost savings;
A ringfenced fund for climate action and biodiversity, with €400,000 being provided for 2022;
A fleet replacement programme to upgrade to newer more fuel-efficient vehicles to meet the 2030 climate change targets.
Chief executive of Cork County Council, Tim Lucey, said: “Presenting Budget 2022 has required some difficult decisions and a fine balancing of priorities. When considering the financial resources available, the council had to reconfigure the budget to ensure there was no impact on service delivery for 2022. “Sound financial management and prudence in previous years ensured the council built up reserves for purposes such as playground improvements, burial ground extensions, and ICT infrastructure. “However, the expenditure provided for in Budget 2022 exceeds the projected income, leaving a gap that must be bridged. Every effort has been made to support businesses throughout the last 12 months while the modest rates increase has been designed to ensure a minimum impact on ratepayers while priortising continued service delivery and growth.”