Fianna Fáil Spokesperson on Local Government Barry Cowen TD says the recent hike in rates for small businesses in Cork City is a further indication of the need for reform of the commercial rates system.

Deputy Cowen made the comments after Cork City Council voted to raise commercial rates for small businesses to plug a €1.6m budget deficit. The deficit primarily arises as a result of lost revenues due to rate reductions for large companies and semi-state bodies.

“The Valuation Commissioners recently revalued the properties owned by public utility companies, such as the ESB, An Post and Eircom, for the purposes of determining the commercial rates to be paid to each Local Authority,” said Deputy Cowen.

“This revaluation will result in semi-public and private behemoths paying substantially reduced commercial rates. This will in turn leave a massive €21m deficit in the budgets of Local Authorities right across the country.

“Cork City is down €1.1m this year as a result of this change. The knock on effect is that the council now has to increase commercial rates on small businesses in the city. This is one of a series of rate adjustments that is ongoing throughout the country and many local authorities face difficult decisions in the weeks ahead due to the antiquated nature of the commercial rates system.

“It is clear that the current system of valuations is discriminating against small businesses. Many struggling businesses have been stuck with a valuation that was determined at the height of the Celtic Tiger, when property prices were at their highest. These small companies have been struggling to pay these inflated commercial rates ever since.

“The system of state valuations is unwieldy and does not take account of commercial reality. The system desperately needs to be reformed to ensure more regular and fairer valuations are undertaken in each area. The so-called ‘global valuation’ of public utilities is undertaken every five years, despite the fact that these semi-state companies often do not have to contend with the commercial realities that small businesses encounter.

“Commercial rates are a major burden on struggling businesses throughout the country and there are many aspects of the system that requires review and reform. I have been putting pressure on Minister Coveney to set up a review to consider the future of the commercial rates system. The Government has promised such a review – it’s high time they delivered on this commitment,” concluded Deputy Cowen.