To Balance 2023 Budget, Councillors Vote to Increase Rates Businesses Pay

Dublin city councillors agreed the city’s budget for 2023, setting it at €1.24 billion – an increase of €110 million from last year, but at a time of inflation, pre-agreed wage increases and rising energy costs.

Councillors voted to increase commercial rates – the property-based charges paid by businesses – by 1.87 percent, to help plug the gap in council funding caused by those extra costs.

They also voted to scrap a long-standing rates rebate for vacant commercial properties, which meant their owners didn’t have to pay full rates. This was expected to bring in around €1.5 million for the council, and so councillors debated what to do with that pot of money.

A Fine Gael motion to use that money to protect small businesses from the rates increase fell without a debate, as councillors voted instead for a Green Party motion to divert the money to the area office discretionary funds, which are used to pay for community initiatives in each local area.

Councillors complained that they only control around 1 percent of the council’s budget, as so much of the spending is already decided on outside of their control.

Labour Councillor Dermot Lacey said that central government departments decide the majority of the council’s spending. “To pretend that it is our budget is simply not true and false,” he said.

“The city won’t grow, its citizens won’t grow, we have no money,” said independent Councillor Mannix Flynn. “We have to address the fact that as a council we are stuck in the harbour when we should be out at sea.”

In his intro to the budget document, the council’s chief executive, Owen Keegan, said that the draft budget provides for the same levels of services next year as this year, with some modest increases.

That’s satisfactory given the current climate, he said. “However, it is disappointing that the City Council will not be able to respond to the many legitimate demands for improvements in the services it provides and for new services to meet the needs of the city, and all those who live, work or visit the city.”

Income and Expenditure

The council’s head of finance Kathy Quinn gave a breakdown of where the council’s money comes from – with 36 percent from the central government, 31 percent from rates, 28 percent from goods and services, 2 percent from local property tax, and this year 3 percent from its own savings.

Inflation, wage agreements and the cost of energy are pushing up the council’s spending, she said, leaving it with little or no wiggle room.

“Energy inflation and general inflationary pressures have just eaten alot of the funds that we would have had,” said Quinn at the meeting.

The biggest lines in the budget are €550m on housing, €247m on environmental services, €137m on roads and traffic, and €122m on culture, recreation and amenities, said Quinn.

Central government has provided €5m to help the council with rising energy costs, says a budget report to councillors. “The impact of broader inflation is being borne by [the council],” it says.

Many councillors who spoke at the meeting criticised the HSE for its continued failure to fully fund the Dublin Fire Brigade Emergency Ambulance Service, saying that this leaves a massive hole in the council’s finances.

“Unfortunately the HSE is refusing to pay us the €104m it owes us to date from 2014 to 2022,” said Fianna Fáil Councillor Deirdre Heney. (In September, Keegan said in a reply to a councillor’s question that the figure was €116.8m.)

The HSE agreed in an arbitration process that the council spent double the amount the HSE paid for the service, said Heney.

Central government stumped up €8m towards the ambulance service this year, said Quinn.

Raising Commercial Rates

Councillors voted to back the plan to increase rates for businesses by 1.87 percent, to plug a gap in the council’s budget rather than cut services.

In 2022, commercial rates were calculated by multiplying the rateable value of the property by 0.268. For 2023, the rates will be 0.273 times the value of the property.

“In 2023, rateable valuations will increase by €27.5m providing an additional €7.4m in rates income,” says the report.

In 2016, owners of commercial premises that were vacant were able to get a rates rebate of 50 percent, and the council has reduced that over the years. This year the manager proposed reducing it from 30 percent to 15 percent.

Four political parties on the council submitted motions calling for the rates rebate for vacant commercial premises to be eliminated, and proposed different ways to spend the €1.5m released by that move.

Four Motions, One Pot of Money

The Fianna Fáil group tabled a motion proposing to divert the money to provide a bulky waste collection.

Fianna Fáil Councillor Deirdre Heney asked why the bulky waste service, which councillors put money aside for last year, was never provided.

Independent Councillor Noeleen Reilly said that people expected that bulky waste collection to happen.

Quinn said that the bulky waste collection “didn’t happen and should have” and that the €750,000 put aside for it is available. “That money is there for spending to be determined by councillors.”

Fine Gael Councillor James Geoghegan said that the commercial rates increase was the largest since 2009.

It’s the HSE’s failure to fund the ambulance service meant that the council has to raise rates on businesses, he said.

“We are very conscious of small businesses that survived through Covid, because of the business supports that our governments put in place,” he said. “A lot of them are now struggling or fighting to survive because of rising costs.”

The Fine Gael group proposed a grant system for businesses with rates bills of less than €25,000 per year, so that they could get a refund of the increase, he says.

The group’s motion said that Limerick City and County Council has introduced a similar scheme.

Sinn Féin Councillor Daithí Doolan proposed a motion that the council use €965,000 to provide a one-off payment of €1,000 to those firefighters who haven’t received the bonus for frontline workers during Covid-19.

The Sinn Féin group proposed giving €35,000 to a street festival, Lá Mór Na Gaeilge, to celebrate the Irish language, and the remainder to community projects through the area office discretionary funds.

Quinn, the council finance manager, said that it is not legally possible for the council to decide to make payments to staff outside of their existing wage agreements.

The rates of pay are not an executive function. “There is no question about the value of the Dublin Fire Brigade staff,” she said, but it “is beyond the capacity of the council to do that”.

All Fire Brigade workers should get their €1,000 payments by the end of this year, she said.

A Green Party motion proposed diverting the €1.5m to fund discretionary spending decided by councillors at the local area level. “I think we all know projects locally we would like to spend it on,” said Green Party Councillor Michael Pidgeon.

It is good that the council is getting rid of the “perverse incentive” for landlords to leave business premises empty, he said. The council shouldn’t reward vacancy with a rates rebate, he said.

In the end, councillors voted in favour of the Green Party proposal to divert the €1.5m money to the discretionary funds.

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Laoise Neylon: Laoise Neylon is a city reporter for Dublin Inquirer. You can reach her at [email protected]

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