The Irish Business and Employers Confederation has warned that decisions taken by Mayo County Council in the 2010 local authority budgetary process will have critical significance on the ability of businesses to remain competitive and survive. That is according to IBEC West regional director John Brennan.
“The manner in which Mayo County Council respond to impending cutbacks in central government financing and shortfalls in revenue is crucial for the business sector,” Mr Brennan said. “A choice exists in how this shortfall is bridged; by cost saving through further efficiencies or by increasing already high user charges to business. The latter is not an option for businesses as the costs of local authority administered services already represent a significant component of non-pay costs.”
He went on to say that on an annual basis the gap between revenue and expenditure for each local authority is “plugged” by increasing rates. “In 2009, 22 of the 34 local authorities increased charges at a time when the whole economy was focusing on cutting costs. Increases of similar magnitude in 2010 would simply not be equitable or sustainable in the current climate of falling prices and would have significant downside risks for employment.
“In the past local authorities have justified commercial rate increases on the basis of inflationary pressures. With the Consumer Price Index expected to fall by between four per cent and five per cent in 2009, businesses believe there should be a commensurate cut in commercial rates in line with deflation. In relation to water charges, local authorities need to address the lack of transparency in how they price water and waste water services for the non-domestic sector,” added Mr Brennan.
In conclusion, Mr Brennan said: “Local authorities must frame their forthcoming budgets in such a fashion so as to minimise user charges to business. Levying increases on business to plug shortfalls in central government funding is inequitable, runs contrary to the polluter pays principle, and jeopardises the existence of many businesses. Business must be viewed as an integral part of a successful local economy and not simply a revenue stream.”
