Calls in Cork to tailor county council’s commercial rates system to help struggling sectors

By Peter McCarthy, Corkman

The commercial rates system used to raise funds for local authorities is outdated and needs to be reformed to reflect the contrasting fortunes of the different sectors that make up the economy, according to councillors in Cork.

In a motion brought before this week’s meeting of Cork County Council, Cllr Ger Curley argued that commercial rates should be divided into four categories, namely industrial, office buildings, hospitality and small retail business.

“This will enable county councils to target different sectors of commercial rates and help those sectors which are struggling at various points in the future. This approach would allow us to target sectors where rate hikes are more acceptable,” the Cobh councillor said.

“At last month's budget meeting nearly all councillors lacked enthusiasm for striking a rate due to its potential impact on small business and on the hospitality sector. In County Cork, like all other councils, the ARV is decided annually and is calculated at different amounts. If we divide the rates into sectors, we can set the ARV for each sector annually.”

In October the elected members of Cork County Council rejected a proposal from the executive that commercial rates be increased next year. The executive had sought a 3pc increase in the Annual Rate on Valuation (ARV), the multiplier a local authority uses to calculate its commercial rates each year.

Councillors from all of the political parties as well as independents spoke out against raising commercial rates, which they said would put further pressure on businesses already facing many challenges. The executive had argued that the rise was necessary to deal with inflation and the increasing demands on the local authority.

Cllr Curley’s motion was seconded by Cllr Peter O'Donoghue who said: “The way we collect commercial rates here on Cork County Council, we use a very blunt and broad instrument. We kind of paint all businesses with one brush. When it comes to economies, not all industries and not all sectors will be feeling the same financial pressures at the same time.”

Also among the councillors supporting the motion was Cllr Ann Bambury who said the proposal “would align commercial rates with economic reality. We all are familiar with the fact that a tech office building, a rural manufacturing unit, a shop on the high street and a small café all face different market conditions. This suggestion would allow the council to support the right sectors at the right time.”

Cllr Danny Collins also agreed with the idea of applying different rates to different sectors, saying “we've seen multinational companies, they're making multi-millions and you don't see many of them really over the years closing down, but you see a lot of restaurants, craft shops, pubs and so on closing down throughout our towns and villages throughout the county.”

The council agreed to write to the local government minister with the proposal. Cllr Curley asked that the letter “be strongly supported not only by the members here, but also by the executive.”