Councils could face €727m rates plunge

A FINANCIAL analysis of the impact of Covid-19 on Ireland’s local authorities has found that €727m of the national commercial rates base — almost half of the total collected annually — is in jeopardy because of the crisis.

The potential loss of such a huge chunk of local government funding could lead to “severe measures to address the situation, up to and including curtailment of services and support projects for local community, shorter working weeks for staff and an immediate curtailment or cessation of planned economic development programmes,” it said.

The report — prepared by local authority finance experts for the County and City Management Association (CCMA), the body which represents all county managers in Ireland — found that the shortfall in rates income to councils would arise as a result of the enforced closure of rate-paying businesses.

An email sent on Friday to the executive membership of the Association of Irish Local Government — which represents county councillors — warned that the CCMA analysis showed “the economic position locally could spiral negatively out of control”.

The email also stated: “It is probable that most, if not all of this money, will remain uncollectable for 2020.

“It will not be possible for the local government system to sustain the financial shock that is emerging as a result of the Covid emergency unless there is compensatory funding available from elsewhere.”

It urged councillors to contact the Department of Housing, Planning and Local Government “to press the case for funding so that local services can be sustained and that councils are in a position to support the recovery in the local economy when the emergency is over”.

One Fine Gael councillor spoken to by the Sunday Independent — Fingal-based Tom O’Leary — urged the government to abolish commercial rates for six months to help smaller businesses, but to also provide immediate funding to county councils to protect local services and pay the wages of council workers.