Galway Independent Column - May 5th 2010

In Galway Chamber’s Pre-Budget Submission to Government prior to the last Budget, we stated that Government needs to reform its system of funding for Local Government. There are many reasons for this, not just the decline in construction activity and its effect on revenues derived by local authorities from development contributions.

We proposed some specific measures including a more broadly based sectorally inclusive system of funding for Local Government, Rates increases must be reduced or at the very least capped at current levels. Commercial Rates, as a tax on business, are a tax on job creation and entrepreneurship.

There must be value for taxes paid at a local level (€32 million to be levied in rates in Galway City in 2010), for example, a direct tax credit against actual rates paid and inequity in location must be addressed in terms of Commercial Rates where centres of critical mass are being penalized.

One of our proposals in the document was to cut the Local Authority paybill through a ‘back office’ rationalisation plan for activities such as HR, IT and Finance Administration ie both City and County Councils using the same back office function. This occurs every day in the private sector as business struggle to survive.

This has come to the fore again recently where the Galway City Manager recently referred to the problem of Rates collection as being paramount to the difficulties the City Council is experiencing in balancing its books. As a business organisation, whose members are struggling to pay rates (particularly in the retail and hospitality sectors), an extra tax on the business community for which many people feel they get nothing in return, Galway Chamber would again encourage the City Council to examine the possibility of amalgamating certain functions with the County Council. Costs as well as revenues must be examined as arguably, the City Council has more control over costs. This would appear to be worthy of consideration before threatening legal action.

This idea is currently getting a lot of airplay in Limerick where the Boundary Commission Report instigated by Minister Gormley has generated responses such as ‘not an inch’ from at least one local elected representative on its proposal to extend the Limerick City boundary into Clare.

An Taisce in Limerick has gone so far as to propose a regional authority or a region with a unified authority involving Clare, Limerick and North Tipperary County Councils. This view of amalgamation to promote cost saving is not the preserve of local government…this week there appears to be emerging consensus in ongoing discussions on the future of the Irish Catholic Church that there are too many dioceses with four archbishops and 25 bishops. It appears that the diocesan structures in Ireland were established in 1111 and if that tradition is being examined then perhaps Local Government should be too.