An increase of 250 per cent in water charges will devastate businesses in Mullingar and may lead to many shutting their doors for good.
That’s according to president of Mullingar Chamber of Commerce Paul O’Brennan, who is seeking an emergency meeting with Westmeath County Council executives to discuss the increases announced in December’s budget.
With a number of businesses in the town closing their doors in recent weeks, and several more considering closure, Mr O’Brennan fears that water charges may prove the deciding factor.
The water charges imposed on businesses by Westmeath County Council are set to increase by 250 per cent over the coming year. In the recent budget, the council announced an increase in charges from 94.5 cent per cubic metre to €1.19. An additional charge of €1.26 is also to be applied for waste water going out, meaning a total of €2.45 per cubic metre will now be payable by businesses.
While reporting a positive outcome from sales over the Christmas period, Mr O’Brennan said that the increased costs being placed on businesses by the council are a major cause for concern.
“The rates increase of 1 per cent is disappointing. It was the one time we figured the council would show leadership and leave rates at a zero increase, as most councils did.
“However it is water charges that are the biggest worry for businesses, with a 250 per cent increase on last year’s rates. This will certainly close some businesses down. It will have a massive effect on restaurants, bars, and hotels where the percentage of water turnover is high.
“One business told me they paid €13,000 last year in water charges and are wondering what they are going to pay this year. If it is as much as €33,000 or €34,000 they will be going out of business. This sort of increase at this time is completely unacceptable.
“We are looking for an emergency meeting with the council and possibly to address the council chamber itself.”
Mr O’Brennan remains hopeful that a satisfactory solution can be negotiated with the council. “I hope we can try to work something out together. It is not sustainable for businesses to take the hit. If businesses end up closing down, the council will lose out on rates. The council is being told it must charge for water and waste water, but the way it is charging is destroying business. They need to look into deferring the charges and seeing if they can find the money elsewhere.
“A number of shops are having closing down sales and a few more are seriously considering whether it is worth continuing.”
Business over the Christmas period in Mullingar was surprisingly good, according to Mr O’Brennan, with retailers reporting similar sales figures to last year.
“There is good news regarding sales. The last two to three weeks of December in Mullingar were as good as the same period last year. November had been very bad as people seemed to be holding out until December, but then sales were high across the region. We are keeping our fingers crossed that the January sales will bring people out.”
However overall sales across last year were down 15 per cent on the 2007 figures. “Most retail businesses are already under so much pressure. A 15 per cent drop in sales over the year is significant, and we have to find a way of cutting costs,” said Mr O’Brennan.
Sales of Mullingar Chamber gift vouchers were also lower than the previous year. Whereas in 2007, €170,000 worth of the vouchers were sold, for 2008 the figure was €130,000.
“People were not giving out as much in bonuses, so we didn’t sell as many. However, they are going fairly strong, and they are money that will definitely be spent in the town, so we should see the benefits in the coming weeks and months.”
When asked whether locals had heeded pre-Christmas calls to ‘shop local’, Mr O’Brennan feels that many will have learned from experience that it doesn’t pay to travel to the North to shop.
“The damage was done in December, and millions of euros went across the border from the area. I believe it was a perception; for all of December people believed it was cheaper to go north and spent their money there. In fact the savings on the basics by going across the border are almost nil, especially now that the euro is moving back to its normal position in relation to sterling.
“If the Government had taken an immediate stance and reduced VAT it could have been prevented. And as it happened retailers here were discounting by 10 and 20 per cent anyway, which was more than the difference in VAT. We didn’t do ourselves or the local area any favours.”
The chamber is currently conducting a survey among businesses in the town regarding use of water, and hopes to have the opportunity to dialogue with the council as soon as possible. “It will be a busy year. All we can do is keep plugging away and keep businesses united,” concluded Mr O’Brennan.
