Before I move Second Stage, with the permission of the Ceann Comhairle, I ask that we remember this day in world history. It is a very poignant date as it is the fiftieth anniversary of the brutal assassination of John F. Kennedy, an Irish-American President, who only six months earlier had visited this country to see his ancestral home and the Garden of Remembrance. He also addressed a joint sitting of the Houses of the Oireachtas. We remember fondly that time in our history and that of his family. He was an inspiration to many. We remember the great shock and numbness at the news of his death in America and also in Ireland and throughout the world. With the indulgence of the Ceann Comhairle I ask that the House take a moment's reflection in remembrance. May he rest in peace.
Local Government (Town Centres) Bill 2013: Second Stage [Private Members]
I move: "That the Bill be now read a Second Time."
Across the length and breadth of Ireland, towns are showing the scars of disastrous unemployment rates, abysmally low confidence, myopic planning and the slow bleed of emigration. Abandoned shops dot the streetscape while remaining businesses struggle to entice customers and to keep their doors open. Government public relations are promoting the slow signs of recovery. However, it is obvious to many of us that outside the M50, towns are struggling under an incessant stream of closures. It is a vicious circle of reduced spending, declining trade and a move to out-of-town shopping centres, leading to what I call a hollowing-out of towns.
Fewer shops mean reduced footfall on the streets and reduced spending, leading to further closures in a downward spiral. In short, Irish towns are in crisis.
The rich traditions of town life stretching back centuries, from farmers' marts to a vibrant social life, have been and can be again an integral part of the fabric of Irish society. Towns have played and can continue to play a pivotal economic role in Ireland, providing local entrepreneurs with a place to set up businesses and provide local jobs through direct and indirect employment. A lively town centre is one that has a commercial, social and cultural space, with vibrant local businesses at its heart. Strong local businesses create employment, invest in the civic amenities of towns, provide revenue for local authorities and sponsor local community groups, sports and cultural organisations. Without them, towns will continue to die. As is the case with many Deputies, I know that this is true of my constituency. Banagher, Clara, Birr, Tullamore, Daingean, Kilcormac and so on have traditionally been the centres of their hinterlands, but they are under immense pressure to retain that status.
Ironically, these threats to the future of towns as vibrant economic and social hubs come at a time when broader demographic changes mean that towns are growing in importance. Over the decades Irish society has been transformed from a predominantly rural society into an urban one. Some 62% of the population now live in urban areas compared with just 42% in 1951, bringing Ireland closer to the European norm. Despite these population increases, towns face a grave challenge to their position as hubs of activity. The systematic closure of 140 Garda stations, the threats faced by An Post to its future viability and the policy of major State-supported banks in withdrawing their services and closing down branches have left numerous towns reeling from the loss of critical local services. On top of this, the Government is taking the axe to the democratic institutions of town councils which give these communities a focal point to fight their corner. All the while, the changing nature of commerce and the rise of Internet shopping present new problems for towns to tackle as the old models of business are put under pressure.
In order to rise to the challenges presented by this crisis, it is imperative that we put in place a legislative framework for towns to develop a viable, comprehensive strategy to revitalise their centres. This Bill is a step towards that aim. It is drawn from Streets Ahead, a Fianna Fáil policy document specifically designed to revitalise town centres throughout the country. It would empower and charge local authorities to establish town teams to lead the way in creating an holistic plan to tackle the problems facing each town. Under the Bill, each town would have a team drawn from business, the Civil Service, politics, the Garda and civic groups to evaluate the issues facing it. While the broader difficulties are nationwide problems, they manifest in different ways. As opposed to the unwieldy top-down approach, a localised team for each town would allow people to identify their own needs. The teams would be tasked with developing individualised town revitalisation plans with clear targets and timeframes encompassing various facets that I will now seek to outline.
A key issue for the teams would be the unsustainable financial burden placed on businesses and consumers that is crippling commerce in towns. The archaic commercial rates system in Ireland is a Victorian invention in an Internet age. Businesses faced with a downward spiral of trade are being hit with rate bills that are pushing them over the edge. Retailers in towns are being burdened with financing local authorities to an unsustainable level, with local authorities deriving 28% of their finance from commercial rates. For entrepreneurs hoping to set up new businesses or existing retailers fighting to keep their heads above water, the commercial rates system is the straw that is breaking their backs and rendering their efforts financially impossible. It is imperative that the Government and local authorities work together to establish a revamped system that would create breathing space for retailers in financial difficulty, incentivise new businesses to set up in towns and form a sustainable base for local authority finances. Rates should also reflect the need to attract businesses away from the environmentally and socially unsustainable out-of-town shopping centre model.
Introducing flexibility for local authorities to use discretion in reducing or delaying commercial rate charges against new businesses would be a vital power that would enable towns to attract fledging businesses and new ideas and foster a greater sense of entrepreneurship across the country. As old business models change in the age of Internet shopping, fostering new enterprises to fit new demands will be increasingly important in keeping the main streets of towns alive with commerce. In the United Kingdom, for example, councils have the power to exempt struggling businesses from paying rates and provide a 50% mandatory rates exemption. Empowering local authorities to alleviate the burden of rates in specific key sites in towns for new businesses would serve as an incentive for innovative retailers to set up shop and create local jobs.
In order to assist town teams nationally, a specific inability to pay clause should be introduced via an amendment to the Valuation Act. This clause which is standard in valuation procedures in the United Kingdom would be a key measure to help to alleviate pressure on struggling businesses. It is also a central demand of the Irish Employers for Affordable Rates, IEAR, group and its vision for a reformed rates valuation process. An overhauled commercial rates system should be cognisant of the turnover and commercial rent specific to a particular business and its location.
In order to balance the financial costs of incentivising new business with rates relief, a special commercial rates surcharge should be levied on out-of-town shopping centres. This surcharge would encourage businesses to locate in environmentally and socially sustainable town centres. The additional charge would reflect the parking advantages enjoyed by out-of-town centre developments. A similar charge has been implemented in Northern Ireland since April 2012 through the introduction of an additional tax at a 15% rate which is expected to yield £5 million per annum.
A major obstacle to enticing greater numbers into towns is the parking charges structure. The added costs and hassle of parking are encouraging people to flock to out-of-town centres where there is free parking rather than to the traditional hearts of our communities. The additional costs of parking, the wide variations between local authorities, the expensive fees imposed for overstaying allotted times and the dreaded prospect of clamping have all combined to deter people from shopping in many towns. Local authorities have grown accustomed to using parking charges solely as a revenue-raising mechanism rather than viewing them as an impediment to business. In effect, parking charges are an additional cost to customers, penalising them for shopping in towns. Under the Bill, town teams would be entrusted with tackling this issue head on. A number of steps can be taken to reduce parking costs and encourage greater numbers into towns, for example, a review of the parking fees structure in out-of-town centre developments, a new graded parking fees structure and payment methods, special parking offers to encourage town centre visits and a published parking cost league.
Many town councils are already taking action to address this problem. Town teams can build on this progress and open up towns to greater numbers.
Towns are about more than shopping. They are the social and cultural hubs of communities, not only for those living in the urban area but those across their hinterlands. They must be welcoming places for all generations, young and old. Imaginative planning, cultural initiatives and close co-operation with the Garda to ensure streets are safe and accessible are key components in revitalising towns across the country.
Town teams are tasked with taking the lead across these areas. Out-of-town centres should be discouraged and the retail planning guidelines reviewed to emphasise the need to focus future development on town centres. Car parking facilities should be conveniently located to help encourage visits to the town centre. The layout of towns should encompass enhanced cycling facilities and residential uses near the centre to create environmentally sustainable living practises.
Communities and businesses should have a central role in shaping town development plans to ensure they reflect their knowledge and vision for the future, thereby securing community buy-in to achieving the plan’s objectives. Empty shops should be opened up for pop-up businesses rather than left vacant. Town teams should also be charged with interacting with NAMA to maximise the use of properties in their towns.
In social terms, new cultural initiatives such as local festivals should be undertaken and market days held to foster a more vibrant street life. National events such as Open House nights should be built upon at a local level with new twists and ideas suited to each locality. Town teams are charged with instigating these changes.
To open up streets to all generations, town teams should take the lead in securing Purple Flag street initiatives. Similar to the Blue Flag given to outstanding clean beaches and the Green Flag awarded to the most eco-friendly schools, the Purple Flag is an accreditation scheme that honours excellence in the appeal and management of a town or city centre. Working with businesses and the Garda we can ensure that our towns eradicate anti-social behaviour as a barrier to people enjoying their local areas.
As stated, Ireland and Irish towns are in the midst of a fundamental crisis. However, they do, in my opinion, have the capability not only to survive but to flourish. This Bill is designed to empower them with the tools to rise up to the grave challenges they face. Reducing the costs of doing business, making it cheaper and easier for customers to come into towns, creating a more inviting atmosphere and streetscape and restoring the position of towns as cultural, social and economic hubs is vital to revitalising Irish town centres. We do not want to oversee the hollowing out and desolation of historic towns in every county across Ireland. We do not want a legacy of vacant shop fronts and derelict buildings.
Strong action that draws up the deep well of co-operation between communities and business can help create vibrant towns that will thrive into the future. This Bill is a first step towards this. I hope that the Government will give it full and fair consideration in the constructive spirit in which it is offered.
Hear, hear.
I join with Deputy Cowen in acknowledging the 50th anniversary of the assassination of John F. Kennedy, and, in particular, the warm relationship between our country and the United States due largely, but including other factors, to his Presidency of that country. One of the highlights for anybody visiting this House is the flag which commemorates the people who died in the American Civil War.
I thank the Deputy for his Bill and welcome the opportunity to discuss his proposals for the revitalisation of town centres. Like other Deputies, I have a particular interest in this issue and I am familiar with many of the challenges, particularly those facing small and medium sized retailers operating in town and city centre locations. The Government has also recognised the importance of local economic development and town governance in its 2012 Action Programme for Effective Local Government - Putting People First.
Towns play a vital role in the life of communities around Ireland. We have all seen the effects of urban sprawl and poorly planned out-of-town retail development. Families all over Ireland are paying for those mistakes through more expensive infrastructure, longer journeys and congestion. Vibrant town centres contribute to social inclusion and create a common civic space where citizens can interact socially, culturally and economically.
Much of what is proposed in Deputy Cowen's Bill has been already done by Government. For example, new development contribution guidelines were introduced earlier this year requiring planning authorities to put in place reduced development contributions or waivers to support town centre development. The Deputy referred to the guidelines on retail planning. These are aimed at promoting and supporting the vitality and viability of city and town centres through the planning system. The guidelines set out the components of city-town centre strategies and recommend that they be prepared by the planning authorities in conjunction with stakeholders such as retailers, customers, chambers of commerce and community groups in parallel with the local area and county development plans.
Local authorities have been asked to exercise restraint or, where possible, to reduce commercial rates and local charges to assist local businesses in the current economic climate. The response to this request has been positive with, for example, 87 out of 88 rating authorities either reducing their annual rate or retaining it at the same level as in 2012. This follows similar trends in commercial local authority rate charges in 2010 and 2011.
I would now like to turn specifically to the proposals in Deputy Cowen's Bill. Many of the functions proposed by the Deputy for inclusion in town revitalisation plans do, I acknowledge, have merit but they do not requite the creation of new structures for implementation. The Local Government Bill 2013 provides for the establishment of municipal districts to empower councillors to consider many of these issues at a local level, including the development of local area plans. Elected members will be supported in this by administrative structures within the local authority at a county level in order to make the best use of resources.
Municipal districts will undertake a range of functions, mainly relating to local matters, including policy and regulatory functions in areas such as the aforementioned local area plans, parking by-laws and charges, as well as casual trading. The new districts will take actions to promote the interests of the community, including establishing a community fund. There will also be scope for significant citizen-community engagement and leadership, including consultation with local communities and consideration of community plans and initiatives. As can be seen, many of these functions overlap with those envisaged for the town teams proposed in Deputy Cowen's Bill and provide for consultation with local communities. The municipal districts will have significantly greater powers than the current area committees of county councils. Area committees are consultative or advisory arrangements. They do not have statutory or decision making powers: municipal districts will. The members at municipal district level will decide a range of important matters for the district. They will have full powers in this regard. They will generally decide matters without reference back to the county council, particularly through the development of local area plans for towns and their environs, subject to consistency with overall policy such as the development plan.
In relation to the specific functions proposed by the Deputy, I am aware that some local authorities have taken measures to encourage tie establishment of pop-up shops in vacant commercial sites. Appropriate parking charges are also a matter that can be best determined at a local level with appropriate by-laws. I would welcome appropriately designed parking charge regimes structured to encourage town centre retail activity while balancing the need to avoid traffic congestion and securing the local authorities' revenue base. Elected members are best placed to consider these matters in conjunction with their council executives.
The Government and I are fully supportive of the need for local authorities, within the context of their own economic and development planning processes and the action plan on jobs, to promote actively measures to stimulate and support local investment and associated job protection and creation.
The Local Government Bill 2013 makes provision for the establishment of strategic policy committees which will consider matters of economic development and matters connected to the promotion of, including support for, enterprise. They will also advise the local authority on these issues. In addition, local enterprise offices in each local authority will provide a one-stop-shop for small businesses, including micro-enterprise support. Relevant Departments and national agencies also have a role in ensuring the necessary legislative, policy and financial supports are available to local authorities in this regard.
I note that Barry Deputy Cowen envisages a role for An Garda Síochána on the proposed town teams to address issues such as anti-social behaviour. As Deputies will be aware, consultation on such issues takes place through joint policing committees and local policing fora. I take matters of anti-social behaviour and crime seriously, but I do not believe it would be appropriate to duplicate consultation structures which would unnecessarily take up the time of Garda management and other stakeholders.
We need to be mindful of the ever-present issue of the cost implications for the taxpayer of any new proposed public expenditure measures. Deputy Barry Cowen's Bill states "the expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas". It appears that there could be significant expense implications for the taxpayer, depending on the level of activity of the Deputy's proposed town teams. I appreciate that the Deputy may not agree with this view. However, as far as I am aware, he has not yet provided details of the cost of his proposals and there was nothing in his contribution this morning that dealt with the issue.
As the Deputy is aware, due to the serious deterioration in the management of the country's public finances in the past decade, the Government has had to take decisive steps to put our finances back on a sustainable level. One such step has been the ongoing consolidation and re-empowerment of local government structures to reinforce their role at the centre of strategic decision-making at local community level. At this time it would be at odds with our overall policy of consolidation to create an extra layer of administration at town level, particularly in putting it on a statutory footing. It would not be appropriate to place additional financial pressures on householders, through higher local property taxes, and business people, through commercial rates, to finance such structures when scare resources are needed to fund essential local services. That said, elected members will in the future have discretion to increase or decrease the local property tax rate by up to 15%. Therefore, it will be a matter for elected members to decide on financing priorities locally rather than having measures such as town teams imposed on them nationally by statute. The Deputy referred to a new system of rates, but, as far as I can see, that is not included in the Bill and I am addressing what is contained in it. Flexibility in the case of the local property tax will be a matter for the local elected members.
We will have municipal districts and they will have powers at local level to consult and engage with all local interests. I am determined that we will do all we can to ensure towns can function to their full potential in order that they can be centres of our social, cultural and economic life. However, I am satisfied that the municipal districts and other existing structures and guidelines already referred to can perform the functions proposed by the Deputy without the need for creating additional structures. I realise others will be contributing presently, but I note that everyone in the House has a strong concern for the difficulties many towns throughout the country are facing and we are all keen to ensure we revitalise them. However, measures have already been taken with development contributions, retail planning guidelines and the proposals for local government reform. I am satisfied that there is no need for another layer of responsibility as recommended in the Bill.
Deputy Kevin Humphreys is next.
I did not expect to be called so quickly.
To be clear, under the new rules, after the proposer of the Bill has spoken and the Minister's reply whoever indicates first will speak. It is open to everyone.
I understood we would submit our names.
No. I did not get the names. To whom did the Deputy submit them?
I thought our Whips had submitted them.
No. It is a case of whoever is in the Chamber and whoever wishes to speak.
I am sorry. I have been here since 9.50 a.m.
I thank the Ceann Comhairle for clearing up the matter.
While listening to Deputy Barry Cowen's contribution I was thinking back on the lack of proper spatial planning in past decades and its effects on rural Ireland and towns and cities. It is a fact that towns and villages are closing down for various reasons, as Deputy Barry Cowen explained. However, it is not only happening outside the M50. Villages such as Ringsend, Sandymount and Donnybrook have seen shops closing, a lack of demand and urban structures breaking down. Dublin is a city of villages and towns, but it is being pulled more into the Liffey Valleys and Dundrums. The social fabric to which Deputy Barry Cowen referred is to be found in urban Ireland also.
We will not see the municipal districts to which the Minister of State referred for seven years in Dublin. We have local area committees, but they do not have the same powers and structures as in rural Ireland. That issue should be considered and addressed. We do have local area committees, but in themselves they will not have the same powers and functions as the municipal districts. I would welcome it if the Minister of State had an opportunity to consider that issue at a later stage. To ask the residents of Dublin to wait for seven years for a mayor and then to ask them to wait for seven years for municipal districts with the same powers and functions as those in place in rural Ireland will gravely disadvantage the towns and villages of Dublin. I imagine Deputy Finian McGrath would agree with me.
Both could do with a lift.
Deputy Barry Cowen referred to the pressures on rates for commercial activities in cities and towns. Certainly, when I was involved in Dublin City Council, we were able to reduce the rates bill year on year, but it was only a tokenistic reduction because we did not have a sufficient income base to do more. A councillor cannot really ask for commercial rates to be reduced without showing an alternative income stream. That is where the property tax comes in. There will be some sharing of the burden across society and it can be used as a mechanism to stimulate employment and the upgrading of town centres etc., which is vital.
The idea of town teams is excellent. Retail Ireland has already brought forward the notion of town teams, as explained by Deputy Barry Cowen. I am unsure whether the original idea for Retail Ireland came from it or the Deputy. There is an active and working town team in the Minister of State's area in Limerick which is already starting to gain momentum in revitalising Limerick in co-operation with all of the groups the Minister of State outlined. Another town team is beginning to get up-and-running in Carlow and I hope it will have the same effect. These two important pilot schemes being run by Retail Ireland should be closely watched to determine whether the idea can be built on and improved.
Towns and villages, whether in rural or urban Ireland, are the very fabric of Irish society. In past decades we have failed these towns and villages. They will have to change as the pressures and way people purchase goods change. When I was a younger man, I travelled a good deal in Ireland. Kinsale was an active commercial town at the time. I have seen the town reinvent itself for several years. We should consider how we can reinvent other towns and villages. We cannot stop progress, the Internet or change how consumers buy goods. However, we can consider different elements of change. Ranelagh in my constituency is a good example. It is reinventing itself and the increased footfall is manifest in local shops and restaurants.
Consequently, it will be necessary to consider new ways to address this. I acknowledge it will be necessary to consider the rate burden on these small shops and businesses but it also will be necessary to work with the commercial sector and small businesses to reinvent the towns and villages that have been at the heart of Irish society for many decades.
First, I thank Deputy Cowen for introducing this Bill. Many towns in my constituency, including Mountmellick, Abbeyleix, Portarlington in particular and Mountrath, are struggling despite the best efforts of local people. My concern about the Deputy's proposals for the establishment of another structure is that this structure will become part of the problem, in that it will be just another talking shop. I make this point on foot of my experience as a town and county councillor, as all Members will have seen many such committees and forums being established, each one of which claimed to be the solution to problems. Unfortunately, however, many of them wind up simply being talking shops. The reason is they do not have any real powers to make the requisite changes. The Minister has addressed this but the central problem is the issue of local government. If one looks at this issue honestly, consecutive Governments of all hues have continued to suck the oxygen from it. There now is an opportunity to breathe life back into local government and Deputy Cowen's Bill is timely, in that it highlights a number of problems that must be addressed by local government.
It is necessary to combat the blight of empty commercial premises and to use the current and new structures and, more importantly, to devolve power downwards from central government and even out from county councils to the new municipal districts, which must be made to work. While Sinn Féin is not happy with all the proposals in this regard, the party welcomes reform and seeks to ensure this new unit be made work and that real powers are devolved to it. While many of the aims of the Bill already are in the gift of local government, they require responsibility to be devolved to the new municipal districts. For example, in the case of the promotion of start-up businesses where there are empty shops, local authorities can and should be allowed to take initiatives, which can include the reduction of rates. While local authorities can reduce the overall rate by 1%, 2% or 3% and some have done that, a key point is that local authorities and the new municipal districts in particular must be given the power to make decisions for a certain village or town or parts thereof. For example, there may be a Bridge Street and a Church Street in a particular town and in partnership with local residents and businesses, for certain reasons one may decide to reduce rates in that particular area for a period. The same is true in respect of start-up businesses. I made such a proposal a number of years ago at a town council meeting and was almost devoured for having the cheek to propose it but many people now see this must happen.
The prioritisation of town centre capital developments and prioritising for spending already is within the gift of local authorities. The Bill has the aim of shifting power away from the county manager to councillors. Local councillors must be in the driving seat to a greater extent with regard to their ability to prioritise such spending. In theory, they have that power but the practice can be somewhat different. Similarly, parking charges are within the gift of local councillors and in many towns, these charges are being reviewed and positive changes are being brought about. As for the question of crime and low-level antisocial activity, it requires engagement with the Garda, council management and most importantly, the engagement of local residents and local councillors. It is my firm view that this can be improved and while joint policing committees, JPCs, are a welcome development, they are consultative and those Members who take the trouble to attend them will be aware they can be mere talking shops. Instead, they should be modelled on the district partnership model in the North. While I admit it is not perfect either and is not everything I would wish it to be, it certainly has a lot more power. For example, it has the power to make plans, has powers of oversight and can ensure the police are held to account. It also ensures such strong partnership, because there must be a strong partnership role between police, local authorities and local residents. On cultural festivals, while they are happening, there must be more of it. Obviously, it is of huge importance to local towns and local commercial activity. In my native county, Laois County Council has been very much to the fore in promoting cultural activities and local events. It has held some major events this year that even have attracted international attention.
The issue of local government reform must be taken on board. It is not fit for purpose at present and it is necessary to try to turn around the position that has arisen in recent years whereby more and more powers have been taken away from it. Powers must be brought back in respect of planning and housing. The latter have been taken away by stealth because housing has moved to an increasing extent to the private and voluntary sectors. Powers also have been taken away in respect of transport, roads and waste management and now in respect of water. The Local Government Bill does not do enough to address this and may not do anything at all to do so but these must be the reserved powers of councillors. In the case of the arts to which I referred earlier, some councils are active in the promotion of culture and the Irish language. This must be brought more to the fore and can provide an economic benefit to a local area. Initiatives should be put in place to use empty properties for cultural activities and perhaps one could introduce zero, or close to zero rates for a period. There is a considerable role for local authorities in this regard.
I wish to address the need to have people living in town centres. If one thinks of any of the towns I mentioned earlier, and in many towns nationwide, people used to live in town centres. They lived over shops and over their businesses. Congestion was mentioned earlier and while time does not allow me to go into it, I can give two good examples. One family in Portlaoise lives over its business while another family travels 14 miles each day to its business with the associated need for the crèche, all the commuting and having two cars on the road. However, the family that lives over its business walked its children to school. The children in that family now are teenagers and walk themselves to school, which is around the corner. Moreover, the car is only taken out perhaps once a month. I often consider this to be an example of the reason people must be brought back to live in the towns. Another reason is to bring life back to town centres. If people do not live in an area, it will not be a living area. If one visits other countries, one will see businesses with apartments and residential areas overhead. We must get back to doing that to move forward. We must get people back living in town centres. I have addressed the issue of antisocial activity, which must be central to making sure people feel safe in town centres and there must be a close partnership between the community and policing.
Out-of-town developments are a huge issue that must be addressed. Huge warehouse-type shopping centres have been located on the outskirts of towns, to which people drive and local authorities must have the power to curtail this in future. Councillors must have the power to change the rating system to ensure that those large multiples are paying the appropriate rates to compensate for the damage that is being done. Huge damage is being done to the existing infrastructure and moreover, additional infrastructure must be provided. I also wish to highlight the Government's target of having 50% of foreign direct investment take place outside Cork and Dublin. Statistics demonstrate this is not happening but it must begin to happen because in many of the aforementioned towns, including Portlaoise, business spaces belonging to the IDA lie empty and the target is not being achieved. However, such investment is needed to keep people in those areas, to keep them working and to have money circulating in the local economy, which is based around the town centre.
The key to addressing economic recovery is to have growth at all levels and local government must play a lead role, in conjunction with the Government, in promoting this. Local government should adopt and implement plans for economic development. Local authorities should provide incubation space and start-up grants for local businesses where appropriate. Empty buildings and empty sites can be used to provide some of that incubation space. In addition, action must be taken regarding the issue of upward-only rents, which has not been addressed. While the Government has stated there is a constitutional issue in this regard, if a referendum is necessary, it should be held. It is an issue that must be addressed to change the Constitution.
There is also the issue of a rates reduction. In respect of start-up businesses and shop front improvements there should be a rates reduction for one to three years. The key to addressing the issue is reform of local government and partnership with local government and local communities. Instead of having formal town teams funded by the taxpayer we can have voluntary teams that do not have to be funded by the taxpayer. We need strong local government that gives local councillors the discretion and the wriggle room to do what is needed to keep town centres alive.
I thank the Ceann Comhairle for the opportunity to contribute to the Local Government (Town Centres) Bill. I commend and thank Deputy Barry Cowen for bringing the Bill before the House as it is part of the economic debate on town centres. It is also an attempt to arrive at new and radical ideas to kickstart the local economy that has taken a major hit in recent years, where small businesses have suffered and jobs have been lost. We urgently need to generate economic activity that will benefit our citizens, hence the reason the legislation and this debate are crucial.
We all know the problem and the issues but what people want is sensible well thought-out solutions. We have heard all the negative talk in the past couple of years. Town centres need these breaks. Governments, local authorities and politicians have a duty to set out ideas, to lead and lay the groundwork for generating our town centres. We also need an open and honest debate in the current economic climate. We have to be sensible where we spend our money. Common sense spending and planning are also the way forward, issues on which many of my colleagues have touched. I will develop this matter further in relation to the parking issue.
The issues that need to be dealt with in the current climate are parking charges at out-of-town shopping centres - it should be noted that parking charges raise €360 million per year; the reason town centres are dying on their feet and also opportunities for growth in town regeneration. I understand the Minister of State has recently backed the vacant site levy. Such issues must be examined in detail. Urban centres have been hard hit by out-of-town shopping centre magnates which has led to many town centres being on their knees. There is also the parking issue.
Town centres are not just about shopping. They have got to be about leisure centres as well as retail, side by side. That is the key to success. Town centres that need a break include Tuam, Westport, Killarney and in my own constituency of Dublin Bay North, places such as Howth. They need our support and sensible proposals to develop the economy. At the same time town centres have to be different. I emphasise they are not just about shopping, but developing the town centre in such a way that people will want to go there, where there is less hassle and there are options, such as a nice pub or restaurant and where people can do their shopping. People just do not want to go town centres for their main shopping. There is another agenda here and people have to wake up to that reality.
A number of my colleagues touched on the rates issue. However, I do not think the Minister of State and the Government really get the issue in respect of commercial rates. In the legislation Deputy Barry Cowen seeks to address the commercial rates issue, on which I strongly support him. Recently I spoke to a small businessman who has a restaurant-pub in County Clare, who happens to be a constituent of the Minister of State, who pays €37,000 in commercial rates. He employs in the region of 20 people in a pub-restaurant business. Before he gets out of bed he has to pay €37,000 before he starts to pay his staff. I am aware the Minister of State has said that she has asked local authorities to exercise restraint and, where possible, to reduce commercial rates. I also heard her mention that 87 of the 88 rating authorities are maintaining the same rate as in 2012. That is an issue we need to hammer home. Those authorities that are keeping the rate at the same level are still charging small businesses, which are trying to pay ten, 15 or 20 people, €37,000 per year. We need to watch that issue.
Another issue that is dealt with is the parking issue. One side of the debate that was ignored by many of my colleagues is the effect of parking on the local economy. For example, many people would not be aware, that the parking industry supports 1,500 jobs and contributes in excess of €100 million to the Exchequer. There are more than 350,000 car parking spaces in Irish cities, towns and town centres, including 269,000 off-street car parking spaces and a further 84,300 on-street spaces. It is estimated that local authorities around the country get €115 million in revenue from parking fees while private car park operators generate €80 million. That is a lot of money in the local economy and it is an issue we have not dealt with. Other beneficiaries include shopping centres which get €50 million, hotels and hospitals €25 million and transport hubs such as airports and railway stations €70 million. Therefore, the parking industry is a pretty large one. If that was a multinational industry providing 1,500 jobs we would all be jumping up and down and giving it tax breaks. The parking industry across Europe generates in the region of €30 billion from 47 million car parking spaces. I understand and support the concerns of businesses in town centres in respect of parking. However, when dealing with this issue we have to look at a well-regulated and managed parking regime as the way forward. I ask the Minister of State to consider these issues also as they are very important.
A truly national policy is important. Cities such as Galway, Cork, Limerick, Waterford and small towns should not be neglected. These town centres need to focus on making the city and town centres better places to visit. We need to bring people in for sensible and logical reasons. We must make town centres more attractive to consumers, tackle crime and improve safety and we need measures to improve business conditions for retailers on the ground.
In regard to the town teams issue, the Government should identify pilot towns and cities where new partnerships involving retailers, landlords, local authorities and representative groups can be formed to establish targets and achieve improvements in town centre locations. The business improvement industry is one we should strongly support.
The crime and safety issue is important. For example, in Dublin less than one in three people do not feel safe in the city centre at night time. That situation must be improved. What I am saying is that most of us on a Friday or Saturday night will go local and stay local and do not want the hassle of going into town. One third of the population of Dublin will not go into town on particular nights because they feel for their safety. That issue must be dealt with by providing a Garda presence and proper lighting systems in city centres and town centres. A proper plan must be put in place to deal with anti-social behaviour.
There is also the issue of litter and tidiness. In a recent poll, some 32% of people said the city was clean and tidy. Such a situation will not entice consumers to come to the city centre. I am aware Dublin City Council has made major improvements in recent years.
We need neat and tidy town and city centres but we also need to have a strong Garda presence. That is something at which we should look closely. More community policing is urgently needed.
I know there are major constitutional issues in regard to rents but this issue must be dealt with and other ways must be found to deal with it. I urge the Minister of State and the Government to look seriously at the proposals in Deputy Cowen's Bill. There are many good and sensible ideas in it which are an attempt to regenerate our town centres. That is the important part of the Bill and is why I urge Members to support it.
I had not planned on speaking but this is a very interesting subject, so I thought I would. The general thrust of what Deputy Cowen said was positive. We need to be proactive about the problems in towns. The problems in the average town and those in Dublin city are very different. Sorting out Dublin city is a more long-term project. If one goes into the city at night, which I do, there is an air of aggression and it is not as comfortable as it should be. Sorting that out will not happen over night. The root causes of it are linked to serious social deprivation in the city. There is probably a poverty rate in the region of 20%, which is high by European standards. There is also a major drug problem. It was interesting to read Fr. Peter McVerry's thoughts on it. I would be very much in agreement with his stance on it that we need to take a different approach. What we have been doing has not worked so we need to look at doing something different. Fr. Peter McVerry knows more about it than any of us, so we should listen to him.
I refer to the commercial element of city and town centres. Over the past 20 years, there has been a lot of in-fill development in Dublin. I was involved in a lot of it where we put commercial space on the ground floor and residential space overhead. It was positive, a good idea and it worked well. Where we fell down was that we did not put the social element in the city centre area because it was not policy. The builder or developer did not want to do that either because there was not the same kind of money involved. Under the Part V arrangement developers were eventually forced to give 20% of a project if it was more than 800 sq. m towards social development but, unfortunately, the developer was allowed to park it somewhere else in the region, which was a bad idea and should not have been tolerated. It would have been good socially and for society in general if we had put a minimum of 20% social development everywhere.
Unfortunately, there is not a serious appetite in this Government for social housing, nor was there in the previous one. It is not on the agenda and that needs to change. We need to develop a different approach. It will be positive if we get back to direct social housing provision by the State.
One of the biggest problems in towns - I know Wexford town best - is that people do not believe they have a say in how their community is organised. I like to compare this to places which work better in this area. I know the village of Cortemelia in Piedmont, which has a population of 3,000, very well. The people there have a very big say in how things are done and there is huge civic involvement in the goings on in the village. When they elect people to the local authority, those people are put into positions with decision-making powers. It is not only public servants who make decisions in the local commune but the people who are elected take major responsibility for most of the decisions made at local level. This is a very good idea because it means that those who are elected organise their local authority. One does not see any empty shops in the village even though the people do not have a lot of money. Generally speaking, Italians have less money in their pockets than the Irish but they have a better way and a better quality of life. Social services are very good and people do not mind paying their house tax, water charge and refuse collection charge because they get a very good return for their investment. It works both ways. Rates and rents are much lower than here.
The Minister of State mentioned that many of the local authorities managed to bring down rates, or at least keep them the same, in 2012. As I mentioned previously in the House, I have five wine bars and a coffee shop. We are looking at a rate increase in Dublin of more than 45% on the basis of the new adjustment, which is shocking. I do not understand the logic behind it; it makes no sense. We are in a position where rates are 25% of our rent, which is not sustainable. However, shops are not everything. If we are going to make our small towns healthy again, there will have to be stronger civic engagement but I do know how we will do that.
The Garda Síochána played a very positive role in my local community when I was younger. The closure of Garda stations is not a good idea. This idea of the garda passing through a village in a white van and disappearing again is not the same as what we had in the past where everybody knew the garda and the garda knew everybody. There was a positive relationship between the garda and the community. That is something we should hold on to rather than move away from.
A huge problem in towns is that large supermarkets have taken much of the life out of town centres. There must be active support for shops in town centres at the expense of the larger shops on the outskirts of towns.
Bigger is not always better but the trend in the past 20 years, not just in Ireland but in much of the developed world, has been that the bigger the unit the more favourably it is treated and, sadly, the smaller the unit the more difficult it is to make ends meet. The opposite should be the case. We must actively engage with and directly help the smaller unit to survive, which can be done in different ways, and not allow the bigger element swallow the smaller one, so to speak.
I welcome many of the ideas in this Bill. As a retailer I am aware that the main streets of our towns and villages are becoming like the high streets in the United Kingdom. When I joined the local authority in 1999 there was a simplistic view that every business was making a fortune and that one could increase the rates every year by an extra 1% or 2% and nobody would notice. I said at the time that there would be far fewer businesses throughout the country in the future and, unfortunately, that has come to pass. About six years ago I re-evaluated that and stated that there would be only bookmaker shops and hairdressing salons in many of our main streets. Things have moved on, however, in that many bookmaker shops are now under pressure because one can have an app on one's phone on which one can gamble 24 hours a day. The hairdressing salons have moved away from the main street and, unfortunately, many of them have moved into the black economy, working out of their own homes. There are now many charity shops in our main streets, which are nice to walk around and make great money for the charities, but we need to achieve the right balance in that regard.
We will never be in the position we were in previously, when the local butcher, the baker and the newsagent, which I was, were located on the main street of a town or village. We now have the major shopping centres in which Tesco, Lidl and Aldi are located, and regardless of whether I agree with them, they are here to stay. People will travel to those for convenience and to get value over a range of goods. That is the position, but that is not to say there is no future in retailing or in the town centre structures.
I am aware of a local newsagent who began to sell piggy-banks, for want of a better word, which one could use to save for weddings, birthdays and so on. The footfall on the street for that product would be limited, but he had a Facebook page on which he sold more of those piggy-banks in one day than he sold in a year in the shop. That is where the innovation is coming in, but we must keep the costs down.
It is ridiculous that in smaller towns in Roscommon, for example - although I am sure it is no different throughout the country - one will rent out a property almost for nothing to get somebody into it, but half of the year's rental goes towards rates. I accept that the Minister is examining this. That is unsustainable and it is a cumbersome way of dealing with the issue. I am aware that discussions are ongoing, but that must be dealt with if we want to get people to move into vacant premises around the country.
There are many good ideas in the Bill, but I have difficulty with the establishment of another structure. We have far too many structures, and establishing another one would lead to much confusion. There is a great deal of change taking place in local authorities. I welcome the fact that many of the agencies are moving into local authorities. I agree with the revitalisation of town centres, but the creation of additional structures is an issue I have with the Bill.
We have had a good debate and I thank Deputy Cowen for facilitating that.
The context in which all of us are speaking is the economic collapse. The doughnut effect, whereby much is happening at the edges of towns and cities and not much in the centre, coupled with the economic collapse, has meant that the life has been sucked out of many of our town and city centres. People have less money in their pockets and understandably, as Deputy Feighan just stated, they will go to the cheaper shops and to places where there is no charge for parking. We must address that issue, and the most important way we can address it is through economic recovery, on which the Government is working.
Regarding the specifics of what we are doing in the Department of the Environment, Community and Local Government, in my role as Minister with responsibility for planning, everything I am doing is to ensure that town centres are given priority, whether that be in the retail planning guidelines, the development contribution guidelines or the way we operate the planning and development legislation requiring local authorities to have core strategies. That means that what can be done in the centre should be done in the centre.
Zoning in respect of out-of-town activity is only for activities that cannot be done in the centre. That is our policy, and I have used my powers under the Planning and Development Act to require local authorities not to zone inappropriately, which would add to the problem of the life being sucked out of town centres. One aspect of the reform of local government is the establishment of municipal districts, whose role will be to co-ordinate and ensure that our towns are focused on in an appropriate way.
Many good suggestions were put forward in the debate from all Deputies. The issue with regard to Dublin raised by Deputy Kevin Humphreys and Deputy Finian McGrath is a specific one that must be considered. Deputy Wallace raised the issues of social mix and social housing. I assure the Deputy that we have begun the construction of mainstream housing again, and funding of €30 million was announced for that in the budget. We want to use brownfield sites and construct these houses on sites in towns or cities, not on greenfield sites. We also want to bring some empty houses back into use in our town and city centres.
Deputy Stanley and others spoke about enlivening our cities in various ways and encouraging people to live in towns. The purpose of the Living City initiative, which was announced in last year's budget and added to in this year's budget, is to encourage people to live in city centres. Admittedly, it is focused currently on cities, but it was expanded this year to include a number of other cities that were not in the initial scheme.
In my city - Deputy Humphreys referred to Limerick also - we have a scheme ongoing whereby if empty properties are used by artists they are given the use of those free of charge and, in return, there is a waiving of rates for the owner of the property. Galway has now adopted that scheme also. There is a level of flexibility that can be used that will incentivise the use of such buildings.
A Member referred to stronger civic engagement. We see examples of towns that work very well where people come together and do tremendous work. In my city I have seen a huge difference due to the various organisations coming together to ensure they all work as one to develop the community through activities and so on.
All the structures we are implementing through the local government reform programme, and that I am operating as Minister with responsibility for planning, are designed to achieve what Deputy Cowen wants to achieve in the Bill. Putting in another layer would be confusing because the municipal districts, and the elected representatives of those municipal districts, have powers and responsibilities. There are also chambers of commerce and other bodies.
I believe the structures being put in place are appropriate.
It is the local authority elected members who should be leading the process. As I said, it will involve community consultation and, as such, will facilitate what Deputy Cowen is seeking to achieve in this legislation. I thank him for the opportunity to debate these proposals. Unfortunately, however, I do not intend to support the Bill.
I thank the Minister of State for her response and colleagues for their contributions. I acknowledge that the Minister of State empathises with the grave difficulties being faced by local authorities throughout the country and the reality of the decimation and continued dilapidation of towns both small and large. I also acknowledge the manner in which she has taken on board her responsibilities, particularly in regard to planning and the initiatives taken in respect of development levies. Many local authorities are revising those levies downwards, as one would expect, in order to incentivise development in their towns and counties. I agree with the points the Minister of State made in regard to retail guidelines and spatial strategies, with a focus on the gearing of development into town centres, not only from a residential and commercial perspective but also in terms of the cultural aspects referred to by several speakers.
I ask the Minister of State to reconsider her stance in regard to the introduction of surcharges for out of town centre developments similar to those introduced in Northern Ireland and Britain in April last year. Those types of charges could function as an effective funding mechanism to offset the costs of such proposals as I have mentioned to seek to incentivise town centres. Rather than placing the onus of responsibility solely on local authorities, it is incumbent on the Government to facilitate local authorities, by way of legislation if necessary, in seeking to introduce any such surcharges.
In regard to commercial rates, all speakers acknowledged the great weight and burden faced by retailers and businesses in town centres for some years now. The Minister of State mentioned that local authorities have reduced their rates. I accept that they have done so in so far as they can, despite the revenue-raising constraints under which they are operating. Most of us in this House have sat through council estimates meetings, which are due to take place in the coming weeks. While commercial rents have come down by as much as 60% to 80% in many towns, rates, on the other hand, have come down by only 4% or 5% at best. That in no way amounts to addressing the hardship that exists. The only revaluation process that is under way at this time is in Dublin. Moreover, I understand some 9,000 appeals are logjammed in the system. The demand notes applicable to those appeals are enforceable on 1 January, but there has been no communication as to whether individual appeals have been accepted or if the process is still ongoing. The demands will remain in place on 1 January. The number of appeals would serve in itself to indicate that the valuations being struck are not reflective of market realties.
The time has come to overhaul the system. It is too easy to fall into the mantra of accepting rates as an annual means of revenue collection on the part of local authorities without recognising the effects this is having on local businesses. Any overhaul must be cognisant of the commercial rents applying in the areas in which rates are being levied, the turnover applicable to the retailer or business in question and the ability to pay factor. These issues should be at the core of an overhaul of the system. Slight amendments to the Valuation Act every five or six years are no longer acceptable. We are all aware of the crisis that is the dilapidation of town centres throughout the State. We can play the blame game regarding the role of all parties at local, regional and national level in terms of the manner in which development took place outside of town centres. I hold my hand up in that regard. There was an expectation that populations would increase in many areas. I mentioned earlier that the percentage living in urban areas has increased from 42% to 62% in the past 60 years. It will not, however, continue to increase at that pace into the future. Hence the need for a rebalancing that would address the grave difficulties that exist from a commercial rates perspective.
I hoped the Minister of State would address the issue of upward-only rent reviews. Her party made a very strong commitment to the electorate before the last election to bring forward legislation to bring that practice to an end. We have since been informed that the legal advice is that it is not possible to do so constitutionally. I do not know what legal advice the Labour Party was receiving before the election and what legal advice it has received since. Notwithstanding that anomaly, I do accept the bona fides of the argument that there is a legal impediment in this regard. Setting aside the failure of several referendums brought forward by the Government, this is a commitment the Minister of State and her colleagues must honour. We would have no difficulty in supporting an amendment to the Constitution, if such was considered necessary, in order to bring forward the legislation necessary to honour that commitment.
There is an expectation on the part of many businesses and retailers, by virtue of the mantra emanating from Government, that the property tax will ease the burden on local businesses in terms of the payments made to local authorities on a regular basis. Unfortunately, that is not and cannot be true, as we will see at the estimates meetings in the coming weeks and this time next year. The property tax, we are told, is replacing the local government fund. The Government, however, has committed to allowing only 80% of what is collected to go back to local government. That in itself comprises a reduction, and will be seen to be a reduction, on what was available under the local government fund last year and the year before. How then can it be construed that the burden on local businesses arising from commitments to local authorities will be reduced? It will not.
I hoped the Minister of State might have acknowledged in her reply the position of those local authority areas that will become municipal authorities under the legislation we will be discussing on Committee Stage in the coming weeks and whose valuation rate is, in some cases, 30% less than the county rate. All the Minister of State has said in this regard is that she has informed the councils that they may bring the rates to parity over the next ten years. I defy her to name one municipal authority area in which this will result in a reduction in rates; on the contrary, it will generally mean an increase. I had an interesting discussion with a delegation from the Association of Municipal Authorities of Ireland during the week.
A town council in Donegal is 29% below the county rate so it is facing a 29% increase over the next three to ten years, depending on how its estimates are determined in the coming weeks.
Finally, I acknowledge the Minister's contention that the local government legislation and the establishment of municipal districts will allow those fora to carry out many of the suggestions I have made today, and which the Minister has acknowledged are required. That is fine. I hope that on Committee Stage of that legislation we will be able to tease out exactly what functions and fund-raising powers those municipal districts will have, as distinct from their county counterparts. Only then will I be convinced that the potential exists for those fora, authorities or districts. The body has yet to be called a "council" and that worries me because there are financial implications. However, only then will we be able to tease out the teeth they will have and their opportunities or prospects of addressing some of the issues I raised today.
I accept the Minister's right to reject the Bill, although I do not agree with her action. I hope that, having not taken the opportunity at this juncture, the Minister or some of her colleagues in the Government might comment on the proposals regarding out-of-town developments and the surcharge. Similarly, a mechanism is required through which the Government should examine the issue of alcohol pricing in many of these multiples. They are contributing to the demise of many pubs in town centres, where alcohol consumption could be protected by the relevant licence holders. That is not the case now, with people doing this at home and so forth.
There are proposals from the Government on alcohol pricing.
The Government increased the duty on alcohol sales in pubs, which had a further crippling effect on the licensed trade in many of our town centres.
I acknowledge the empathy the Minister mentioned and her contribution to the debate. I respect her decision not to accept the Bill, but I remain to be convinced of her assertion that the new district councils will have the wherewithal to do much of what I am proposing. This is a crisis that has been allowed to fester for the last couple of years and it is high time-----
I wonder what created it.
I do not wish to get into a confrontational ding-dong here. We are above that.
The Minister is waffling.
The Deputy is showing his Fianna Fáil colours.
I thank the Ceann Comhairle for allowing me to go a little over the time. I hope that on Committee Stage of the local government Bill we will be able to identify and tease out what the Minister believes to be within it that will be capable of doing much of what I am saying.
In accordance with Standing Order 117A(4), the division is postponed until immediately after the Order of Business on Tuesday next, 26 November 2013.