Skip to main content
Normal View

Seanad Éireann debate -
Thursday, 29 Jun 2006

Vol. 184 No. 8

Local Government (Business Improvement Districts) Bill 2006: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

I am pleased to have the opportunity to open the debate in this House on the Local Government (Business Improvement Districts) Bill 2006. The primary purpose of the Bill is to provide the legislative framework for the operation in Ireland of business improvement district schemes, or BIDS as they are more commonly known. The Bill also proposes to make two technical amendments to the rating and valuation systems which will terminate an anomaly between these two codes and introduce more equity into the rating system.

Some Senators will be aware of business improvement district schemes in operation in other countries such as the USA and Canada. A BID scheme can be described as an organisational and financing mechanism with legal backing through which businesses can develop and implement initiatives in defined areas to improve those areas for the betterment of the trading environment. Essentially, in a BID scheme, a group of businesses come together and decide that they want improved services, a wider range of services, or new facilities or activities in the area in which they operate and that they are willing to pay for it. A specially established BID company is charged with responsibility for implementing the provisions of the BID scheme and the local authority levies and collects the annual BID contributions from businesses on behalf of the scheme.

A wide range of activities can be carried out in a business improvement district scheme, ranging from cleaning, hospitality, promotions and special events to physical improvements, such as the provision of street furniture, signage and special lighting. The extent and type of possible activities is limited only by business needs and the imagination and determination of the business community.

A fundamental feature of the legislation is that the geographical boundary of a business improvement district and the range of services and improvements carried out in the district are determined and developed by the business community. Thus, the private sector — the business community — rather than central or local government is the driving force behind these schemes. It is, therefore, a self-help, bottom-up and collaborative approach by business. The BIDS concept turns the traditional relationship between businesses and local authorities on its head. Traditionally, businesses encouraged local authorities to reduce charges and rates but, with BIDS, businesses encourage local authorities to levy and collect more money.

The initiative for this Bill came from the private sector. Work on the Bill followed a request from the Dublin City Business Association, DCBA. Originating in Toronto, Canada in 1971, business improvement district schemes are now in operation in many cities and towns throughout the world. It is estimated that more than 400 BID type schemes are currently in operation in Canada and the United States of America. European countries are also becoming increasingly involved in these schemes, including Austria, Belgium, Denmark, France, Germany, Holland and Portugal. More recently, a legislative framework has been put in place in the United Kingdom for the operation of these schemes. I do not want to overstate the potential dividends of BIDS but it strikes me that most of the countries I referred to are doing very well in the World Cup. Research on the operation of business improvement districts in the USA has indicated that they provide a vehicle for innovative and proactive management of an area and yield significant positive impacts on the economic vitality and viability of cities and towns.

In developing the provisions of the Bill, extensive consultation was carried out with interested bodies, including local authorities, the DCBA and Chambers Ireland which, in general, welcome the introduction of BIDS legislation. Great enthusiasm has been expressed for this Bill in the business community and a number of well attended information seminars and conferences on BIDS have been organised in anticipation of the legislation. DCBA and Dublin City Council have already committed resources to prepare for the introduction of BIDS.

No two BIDS will be exactly the same. The improvements made will depend ultimately on the needs of a particular area. The planting of trees, shrubs and other landscaping may be a priority for one business improvement district so as to improve the visual attractiveness of the area, whereas another BID may decide on the erection of suitable street lighting and the installation of CCTV for security reasons. In some cases, the promotion of the area through marketing literature, posters or special street events may be the spark needed to boost commercial activity.

Litter is an issue close to my heart. As Senators will be aware, litter is a constant challenge to our environment, and the urban environment in particular. We are making progress in that respect. The recipe for success in tackling litter is to foster a public attitude that looks upon littering as unacceptable behaviour. The eradication of litter pollution will only be achieved through a partnership approach in which all sectors, including businesses, community groups, residents associations, schools and individuals, play their part. Recent examples of this partnership approach in action include the recent agreement with the chewing gum industry and the ongoing negotiations with banks and the fast food industry. BIDS have the potential to be an important added initiative in tackling the litter problem. Supplemental cleaning services can be carried out in a BID area, including additional street sweeping and cleaning, bin emptying, the removal of chewing gum from footpaths and the removal of graffiti from buildings. This has been a prominent and popular feature of schemes operating in other countries.

I would like to set out for the House the main elements involved in business improvement district schemes and the principal issues in developing, running and financing a scheme. Given its link with local government, the Bill provides that the legislative framework for BIDS will be incorporated into the Local Government Act 2001. Section 4 of the Bill inserts a new Part 13A into that Act, consisting of new sections 129A to 129T. For ease of reference in discussing the Bill, I will refer to the new sections in the Local Government Act 2001 because they are set out clearly in the Bill as initiated and in the explanatory memorandum.

The first step in initiating a business district scheme is a recognition by the business community that a BID scheme is appropriate to a particular location and an agreement on the types of services, works or other projects desired. Section 129C provides that people wishing to start a business improvement district may submit a proposal to the local authority for approval. The section sets out the elements that must be included in a BID proposal, such as details of the initiatives to be carried out, the boundary of the proposed BID, estimates of the BID contributions to be paid by business and the timeframe for the scheme. In practice, the development of this plan will require the BID proponents and the local authority to work together in a partnership approach.

All investment made through BIDS will be additional and complementary to existing services in the area and will ensure enhanced impacts on the social and economic vitality in the chosen area. It is critical to underline that the services in a BID add to, and do not substitute for, those already provided by the local authority. The level of services provided by the local authority is benchmarked as part of the process under section 129B.

A key to the ultimate success of business improvement districts will be the extent to which there is meaningful engagement with the public and business in an area. The Bill sets out a framework for such comprehensive consultation. In the first instance, a BID proposal submitted to a local authority must be made available to the public under section 129D and the rating authority must, by way of public notice, invite submissions from the public on the proposal.

Section 129F provides that if the rating authority is of the opinion, based on the submissions received, that the BID proposal is inconsistent with the interests of the local community, it shall notify the BID proponents of the nature of the inconsistency and require them to consider the issue further. A local authority cannot approve a BID scheme if it believes it conflicts with the interests of the community.

A BID scheme involves payment of a contribution by business to finance the works planned. It is vital, therefore, that all businesses in a proposed business improvement district have a formal say on whether a BID is to proceed. To that end, section 129G makes it mandatory that, before a scheme can proceed, a formal plebiscite will be held by ratepayers in the area, that is, among those who would ultimately be responsible for financing the scheme. The plebiscite is organised by the local authority. In the BID plebiscite, each business will have a vote of equal value irrespective of the size of the business. The corner shop's vote is as valuable as that of the major department store. This is important because a BID must have widespread and popular approval before it can proceed and cannot be organised and rammed through by a small number of big businesses. Once there is a majority vote in the plebiscite, the BID scheme can be proposed for approval to the local authority.

The Bill provides for a comprehensive and necessary consultation process with appropriate approvals and checks and balances. It is important that BID proposals do not suffer paralysis by analysis. The Bill strikes the correct balance between prior consultation and progression.

Having developed the proposals and secured a majority in a plebiscite to proceed, the business community does not hand over the running of the scheme to the local authority. As this is an independently organised and funded initiative, the private sector controls and manages implementation through a specially established company. Under section 129 the company must be limited by guarantee and formed and registered under the Companies Act. The board of directors of the company will be made up of businesses and their representative associations and some nominees of the local authority. At least two thirds of the directors must be ratepayers or their representatives. This company partnership will steer through the implementation of the BID plan over its possible five-year term.

A key element of the Bill, which will be of particular interest to businesses, is how the annual BID contribution levy is to be calculated. The process begins with the BID company adopting a budget for the forthcoming year which will identify the income necessary to carry out the elements planned in the scheme. On the basis of this budget, the company will determine the amount of money needed to be raised by imposing BID levies on businesses in the area. When the company determines how much it will need, the local authority collects the required contribution from businesses. The amount of the levy on an individual business is determined by the rateable valuation of that business.

In designing the BID legislative framework, an important consideration was that it would not require complicated new systems or structures. We were largely assisted in this regard by the existence of the tried and trusted independent valuation system and under section 129N, BID contributions will be determined on an individual basis having regard to this system.

Liability for the BID levy will fall on the occupiers of commercial property in the area or the owners of commercial property where the property is vacant. We did not have to reinvent the wheel and introduce complex systems of determining liability because we are fortunate to have a rating system that operates on this basis.

Following the rating law framework, contributions by businesses will be proportionate to the relative valuations of their properties. Businesses with low valuations will pay less than those with high valuations. Rateable valuation of property is determined by the independent Valuation Office. There is a right of appeal to the Commissioner of Valuation, the Valuation Tribunal and to the courts. The Valuation Office is in the process of revaluing all property in the country to ensure that the system is as equitable as possible. A national revaluation has not been undertaken since the middle of the 19th century and many changes have taken place since then. The revaluation will allow a uniform and equitable valuation base to be established and for the removal of any anomalies that may have developed.

The Bill provides relief of 50% of the amount payable in cases where a property is unoccupied for the execution of alterations or repairs, if the owner of the property is unable to obtain a suitable tenant or if the premises is vacant pending a redevelopment. Refunds of BID contributions are also available where properties are demolished or destroyed.

As well as providing the legal framework for the introduction of business districts, the Bill also contains two provisions that will deal with anomalous situations arising in rating and valuation law. Section 6 of the Bill provides for an amendment to the Valuation Act 2001. At the time of the drafting of the Valuation Act 2001 steps were taken to ensure that the revaluation process could not lead to disproportionate gains in rates income by local authorities in the year following a revaluation. Section 56 of that Act included a provision to limit the amount of income a local authority could raise through rates in the year following a revaluation to the amount of rates levied in the previous year, adjusted by the consumer price index for inflation.

However, that section, as enacted, would have cut off rates buoyancy to local authorities that would not be in a position to gain rates income from new properties coming on stream in the year following a revaluation. This could cost local authorities approximately €30 million annually. Section 6 of the Bill deals with this and provides for the amendment of section 56 of the Valuation Act 2001 to provide that the rates payable in the year following a revaluation will include the buoyancy that would otherwise be excluded by virtue of section 56 as enacted. Other than this buoyancy element, the safeguard of the consumer price index cap will remain in place in respect of all existing ratepayers and ensure there are no disproportionate gains in rates income for local authorities. This proposal will ensure that all commercial ratepayers will pay their fair share. Chambers Ireland has indicated its support for this proposal.

Section 5 of the Bill will deal with an anomaly between existing valuation law and local government rating law. Section 5 provides that newly-erected properties will be liable to pay a contribution to local authorities from the date the properties are entered on the valuation list. The anomaly is technical in nature but I will briefly set out the detail for the House. Section 28(14) of the Valuation Act 2001 provides an enabling power to allow rates to be charged on properties with effect from the date of their valuation. However, the provision cannot come into effect because of a conflict with existing rating legislation. Section 29(1) of the Local Government Act 1946, as inserted by section 45 of the Local Government Act 1994, provides that local authorities are only entitled to charge rates for the following year on those properties that are entered on the valuation list at the time of the adoption of a local authority budget.

At present, when a valuation of a property is placed on a valuation list by the commissioner of valuation after the date on which a local authority has adopted its budget, a local authority cannot derive any rates income from that property until after the commencement of the subsequent year. The property gets a potential rates holiday of up to one year. This rates holiday is inequitable as the shortfall in funding that arises may have to be made up by existing ratepayers or it could have the effect of increasing other charges for services to the public.

Section 5 will remove the anomaly for newly-constructed properties and thereby help both to generate much-needed funding for local authorities and to introduce equity into the rating system so that all ratepayers pay their fair share without some enjoying a shelter at the expense of others.

This is an important Bill. As well as dealing with the critical valuation and rating issues I have just discussed, it provides the legislative framework to enable business improvement district schemes to operate in Ireland. While I cannot say that Ireland will do well in the next World Cup if we introduce BIDS, as seems to be the case with other countries that have them, I have no doubt that they will have a major, positive impact on our towns. The provisions in the Bill will facilitate further investment in our urban areas and will be of benefit to the business community and those who live and work in these areas. BIDS have been tested internationally for the past 25 years and are now accepted as beneficial elements in urban regeneration and revitalisation.

I look forward to hearing the views of Senators on the Bill and I am sure we will engage in constructive debate over the course of its journey through the House.

I welcome the Minister of State to the House and thank him for introducing this Bill. Fine Gael supports his efforts in principle but with some reservations. The Bill has implications for stealth taxes and reductions in local authority funding, hallmarks of this Government for the last nine years. We have concerns about the legislation and about local government in general. I hope, however, the Bill will be passed quickly.

Business improvement districts are working partnerships formed between business, rate payers, property owners, tenants, residents and local authorities — hopefully everyone will come on board. The group sets up a designated fund to improve the local area and attract business. Our towns and villages should look attractive. County Longford holds the record for the tidiest villages in Europe — Ardagh, Newtowncashel, Abbeyshrule and Legan have all played their part. There is great competition within the county for the honours each year. Ardagh came third in the European Tidy Towns competition. It is a village I would encourage everyone to visit. All of Longford's towns and villages are very attractive and people should come to them when they get the opportunity. The local authority, which is Fine Gael-led, has done a huge amount of work to achieve this. I congratulate both Paddy Belton and Alan Mitchell, who will be mayors of the county and the town from Friday.

It is a shame this Bill has taken so long to come before us. Make haste slowly is the Government's motto unless legislation is of benefit to it, in which case it is railroaded through with undue haste. As far back as August 2001, The Irish Times reported that legislation was being drafted by the Department of the Environment, Heritage and Local Government to set up new public private partnerships to provide cleaner, greener and safer streets in designated urban areas. It reported that the idea of establishing BIDS in Ireland was inspired by the success of similar schemes in New York, notably in Times Square, where one sleazy part of the town was transformed over ten years by concerted area-based management. Senior executives of the Dublin City Centre Business Association, accompanied by the then Dublin Corporation finance officer, Michael Redmond, and representatives of the Dublin Civic Trust, visited New York to see the results and to talk to Times Square BID teams.

The explanatory memorandum to the Bill states that there are more than 400 BID schemes in operation in Canada and the USA and that European countries are also becoming involved. It is not a unique idea but I am glad the Government has finally moved on it.

Section 3 provides for the amendment of sections 97(3) and (4) of the principal Act. The amendment provides that BID money received by a rating authority is not paid into or out of the local funds. Section 129(e) sets out provisions on public input into a BID proposal and section 129(g) sets out the procedures to be followed leading up to a ratepayers’ plebiscite to determine the level of support for a bid proposal. While I have no problem with these three provisions, I would like the Minister of State to address them in light of the dreadful state of local government finances.

Local authorities are underfunded and urgently need democratic accountability at local level. We cannot look at this Bill in isolation, it is published against the background of a lack of funding for local government. There are huge numbers of group water and sewerage schemes waiting to be approved by the Department of the Environment, Heritage and Local Government. It is important those schemes get off the ground as soon as possible because they are vital infrastructure if towns and villages are to develop. Housing developments are being built with septic tanks so we need schemes to be put in place.

The Minister of State may cite statistics about record levels of funding but he will omit the fact that local authorities must do much more with the money than was the case previously. It now costs more for local authorities to do things they have always done. Under the Local Government Act, extra staff were taken on. Counties with populations of 40,000 have the same tier of administration as a local authority in Dublin responsible for 250,000 people. The taxpayer must pay for these extra staff. Sometimes I wonder whether there is sufficient work in these local authorities for four or five directors. The population should dictate the numbers.

We need business improvement districts because councils do not have the money to improve business districts on their own using current resources. The Chambers of Commerce of Ireland has been vocal on the need for reform. It has pointed out that local government charges cost business over €2 billion per year, with over €1 billion of this raised by commercial rates. The Chambers of Commerce of Ireland on numerous occasions met with the Local Authority Members Association — LAMA — the organisation of which I was a former secretary, to point out the high cost to business of rates, etc. The Chambers of Commerce of Ireland seemingly supports the Bill's programme.

Due to inadequate funding by the Exchequer, local authorities depend on commercial rates. This compels them to promote the development of rateable properties over a healthy mix of residential and commercial development. This, in turn, is driving property prices in urban areas and pushing residential development further from the centres to poorly served and remote locations. The results of this are obvious. Schools are closing and constituents are losing Deputies due to the ageing population. In the recent reform of the constituencies, counties were divided up and one would wonder is this fair. While towns such as Leixlip, Lucan and Gorey are underserviced by schools, infrastructure and amenities, they have grim commuting patterns.

As director of elections last year in the Meath constituency in the Duleek-Stamullen area, I met a considerable number of people who moved from Dublin in the previous four or five years and bought houses more cheaply than they would have in the city but who found there were no schools for their children. They had to send their children back into the city schools. Those people were frustrated and depressed that facilities were not put in place. Infrastructure such as sporting facilities, schools and churches should be included in any new major housing development to accommodate the increasing population in those areas.

In the Border region companies from the North are winning local authority and Government contracts for which their Southern counterparts cannot compete due to a range of charges they are being forced to carry that do not apply in Northern Ireland. Northern semi-state bodies which are winning the contracts are, in turn, employing subcontractors from this State. This is a bit rich. People are becoming fed up with such scenarios where the parent contracting company is in Northern Ireland and people in Southern Ireland are expected to carry out the work at a greatly reduced cost while the contracting company creams off the major profits. This is a matter which needs to be looked at. In the not too distant future, I see a situation where the Government will bring forward legislation to guarantee a certain amount of jobs in the State for Irish-based citizens and that day is not too far away.

It is not only businesses which are suffering. The position of those trying to buy new homes is no better. According to the Department's figures, the total collected in development levies has ballooned from €57 million in 1997 to €215 million in 2003, and it is even higher now. In Galway city, for example, the total take more than doubled over that period to almost €6 million, while in Cork city the total take, which stood at €766,000 in 1997, ballooned to a figure almost ten times that amount in 2003 — a staggering €7.5 million. This occurred despite the fact that the Department's guidelines state that the development contribution should not be set at an excessively high level and that local authorities should be mindful of the policies adopted by other authorities in their immediate area as a major divergence in the level of contribution may be difficult to defend in the future. There is equalisation for counties which have a low rate base, such as my county of Longford.

My party calls for an open and rational debate in the context of considerable increases in development charges, management fees and business rates. The Government continues to hide behind the recent review of local government funding which, unsurprisingly, arrived too late to act upon prior to the next general election. Rather than doing that, I would appreciate the Minister of State taking the opportunity at the end of today's debate to give us his own views on the way forward in this area.

Fine Gael is somewhat concerned that areas outside each BID, which are excluded from benefiting from this extra funding, risk exclusions under this legislation. As local authorities strive to boost central business districts with the extra funding, I seek assurances from the Minister of State that other areas will not be left behind.

This leads me to the issue of plebiscites envisaged in the Bill. I should begin by saying that Fine Gael welcomes this concept. There is no better way to get people involved in local democracy than by getting them to make their own decisions. Indeed, local government should offer a perfect model for direct consultation. It is for this reason that Fine Gael voted in favour of directly elected mayors at our recent Ard-Fheis. The Government may be afraid of the people's verdict but we are not. In fact, the roll-out of business improvement districts would benefit from a strong directly elected mayor.

Senator Bannon's time is up.

Inevitably, political leadership will be needed if the plans envisaged in the Bill are to work. They will not just happen. In planning for the plebiscites, I would be eager to hear the Minister of State's views on this challenge for both local authority members and business leaders.

I must ask Senator Bannon to conclude.

In conclusion,——

No. By the look of it, Senator Bannon has two pages left.

——there are hard questions to be asked.

But Senator Bannon can ask them on Committee Stage.

The Bill is mostly fine on paper and essentially has my party's support, but much more needs to be done once this legislation is passed before a BID can become a reality.

I welcome the Minister of State, Deputy Batt O'Keeffe, to the House. I very much welcome the introduction of this legislation for BIDS. Although it has been a while coming, the framework is correct and much work and study of best practice in this area has gone into it. The legislation is the best we can possibly do.

The BIDS will lead to the enhancement of many areas, and of Dublin city in particular, some of which have been neglected for some time. Under successive Governments parts of the city were decrepit for many years but that has been changing drastically in recent times. Every little patch and waste piece of ground in Dublin city is either being built on or will be built on at some stage in the future.

Such BIDS are partnership agreements between the local business community, residence groups, stakeholders the local authorities and have been very successful around the world since the first one was initiated in 1971 in Canada. There have been hundreds of them around the world, including in the US. The UK is now considering introducing BIDS, as the previous speaker stated.

BIDS are aimed at enhancing, but not replacing, the work of local authorities — that is crucial and it is dealt with fairly clearly in the legislation — in areas such as environmental management, economic development, capital investment, and improvements in and the promotion of social inclusion.

This Government and the previous Government have introduced a raft of legislation in the area of social inclusion. It has been one of the planks of policy for the past number of years. Around the city one can see the benefits of that legislation which has paid off immeasurably and will continue to pay off well into the future. Young people living in inner city areas, which have their difficulties due to drugs, crime or whatever, have been given opportunities in recent times which have not been available previously. In many cases, the lack of such opportunities led to some of the social problems in these areas.

In cities and towns there are numerous environmental issues which can be enhanced using the BID system and the Minister of State referred to a few of them. They include street cleaning and maintenance of streets and removal of graffiti and chewing gum. There has been a particular problem with graffiti in Dublin in recent times. There has been an explosion in the prevalence of graffiti around the city. Whereas in cities like New York it is considered an art form, we must look to legislate for this issue at some stage in the future as it can be quite a nuisance. Some graffiti is fine and appropriate but some of it is extremely ugly and offensive. This issue needs to be examined. Steps have been taken regarding the chewing gum problem. Dublin City Council spent years debating how to tackle the problem and it invested in special machines. While they proved to be of some value, they did not solve the problem.

BIDS can help in the provision of shrubs and flowers to enhance an area. In addition, the boards could invest in marketing the area and provide visitor information centres, which will benefit residents, shoppers and tourists as well as businesses. The success of Temple Bar highlights the benefit of marketing and public relations campaigns. The area is hopping nightly because of good marketing and that has been the case for many years. Tourists travel to Ireland specifically to visit Temple Bar, which is amazing, given that Fine Gael wanted to convert the area into a bus depot when it was in Government. It is crucially important to sell the new districts, particularly from a business point of view, but also to improve and enhance the district for people who live and work there.

The Bill provides for the inclusion of local residents on the boards of BIDS. This is essential, as it will enable business owners to interact and get to know their neighbours and to discuss problems and how to tackle them in a co-ordinated and supportive way. I have worked with various business associations in Dublin such as the Mary Street traders and the Dublin City Business Association, DCBA. They were willing to interact with local communities but it did not always work for a variety of reasons. Communications broke down and when an issue arose, it was difficult to mediate between both sides when one was interfering with the other. The inclusion of local residents on the boards of BIDS will ensure that problem is addressed, which is welcome. It will also enhance the security of both parties in the long run and it will result in significant savings. The issue of security is crucial for both business owners and local residents, particularly in Dublin city centre.

The input of local gardaí will be crucial. The RAPID programme and local authorities provide funding for closed circuit television systems at different locations, including local authority flat complexes. The systems have made a major difference. A report on the implementation of BIDS in other countries highlighted that local nuisance crime had decreased by between 30% and 40%. We are involved with local community policing forums, which are about to become local policing committees. They are extremely successful because community representatives, gardaí and local authority officials meet regularly and tackle issues when they arise. The introduction of BIDS will be effective in tackling problems.

The members of the DCBA employ more that 25,000 people and they have a combined annual turnover of €1.5 billion. They play a major part in the life of the city. Dublin City Council spent €20 million upgrading O'Connell Street and it has done a fantastic job. It will enhance the city's reputation not only in Europe but around the world. The BID system could achieve a great deal if all the business associations combine with the local residents and all the other stakeholders. I congratulate Tom Coffey and Paul McElearney of the DCBA because they did significant work on this issue over the past number of years. The beauty of BIDS is they are self-financing and the moneys raised in a district are re-invested there.

Dublin has suffered from a lack of corporate social responsibility. A number of individuals have tried to become more involved in local communities and their attempts have been hit and miss. However, business owners are willing to contribute and get involved in communities through summer projects or throwing parties at Christmas for old folks and children. The introduction of BIDS will provide a structure for these activities and they will harness the goodwill of business people. This will significantly benefit all concerned but it will take time for them to kick in because the boards must be established and funding agreed. Areas will benefit economically but they will also be enhanced though the provision of street furniture and shrubs and flowers. This will be positive not only for those living in the area but also for people who shop and work there. Many people are employed in Dublin city centre and they spend most of their lives there. The more we can do to enhance their experience, the better.

World class standards must be achieved to compete in the global market but, at the same time, we must maintain and maximise the unique character of our towns and cities because it is a great selling point. Fáilte Ireland is doing a great job selling the country and various towns and cities. However, standards must be improved through the provision of investment and structures that will benefit all concerned. We cannot stand still and we must improve constantly. International experience has demonstrated BIDS can help us to do that in an innovative and practical way. Day-to-day quality of life will improve as a result of the legislation and the business community will benefit because their profits will improve.

Senator Bannon referred to local government funding. It has increased significantly in recent years with a 7% increase last year. The issue is whether local authorities are using the money properly. In a number of cases, the money is sitting in bank accounts while the local authority announces the roll-out of programmes over five and ten years, which never materialise because the council and the officials move on.

The Dublin Docklands Authority is a great example of a successful PPP. Significant improvements have been made along the north quays between the Point Depot and Butt Bridge. If the business improvement districts prove to be in any way as successful as the Dublin docklands or Temple Bar, they are to be greatly welcomed.

I welcome the Minister of State to the House. I also welcome the Bill and wish it every success. I had no idea that its purpose was to win the World Cup until I heard the Minister of State's comments. I hope he will be successful in that regard.

Aside from winning the World Cup, one of the reasons for my enthusiasm in respect of this Bill is that approximately three weeks ago, I visited Dayton, Ohio. My first visit to the United States took place in 1961 and was to Dayton, Ohio. At the time, I was devastated to discover that its centre or core was simply empty. There was nothing there. I could not figure out what had happened to it. As the Minister of State noted, this is precisely what is likely to happen to the core of Irish cities unless something is done about it. On my return a few weeks ago, the situation had changed. While I am unsure whether a business improvement districts policy was implemented there, it now has a thriving city centre. As the Minister of State outlined worldwide developments, I understood that this may be what took place there as well.

Potentially, this Bill will be a useful addition to the range of ways to get things done at the interface between commercial business and public life. Senator Brady has alluded to this point. I hope that many businesses, and local businesses in particular, will approach the measure positively and will see it as an effective way to add to their competitiveness in the present environment.

I can see one immediate use for the proposed mechanism, namely, in the ongoing struggle between town centres and shopping centres located on the periphery of traditional towns. As a retailer who has had a presence in both camps, I can claim a certain familiarity with the issues involved. Traditional town centres developed in an age which greatly differs from the present. The most important difference is that in the heyday of town centres, cars were not a dominant part of the equation. One located one's business in a town centre because it was where people went to do their shopping and to transact their other quotidian business. Consequently, space in town centres became scarce and expensive.

I recall that the second shop which I opened was located in Finglas. While it did not open until 1965, I applied for planning permission in 1963 and was turned down because the site did not have enough car parking spaces. Previously, I had met the former Deputy Paddy Burke, who condemned the planning authorities in the Dáil. He stated that in Finglas, one needed pram parking spaces rather than car parking spaces. A total of 22 spaces had been allocated, which was thought to be sufficient. Although such an allocation was probably adequate in 1965, this was certainly not the case by 1975 or 1985.

It seems that cars have changed the way in which one shops. The greater importance of cars in people's lives has changed the development of shopping centres. One can shop where one wishes with a car at one's disposal. From the retailers' viewpoint, the edge of traditional towns offered acres of relatively cheap space on which they could have all the space they needed to do their business, as well as providing ample parking for the customers outside. Hence, it is small wonder that the past few decades have seen mushrooming growth of out of town centres, largely at the expense of traditional town centres.

I remember travelling to Waterford five years ago or more, to try to convince the then Waterford Corporation to allow Superquinn to locate a supermarket on the outskirts of town. As Waterford is understandably uptight about such matters, I was careful to use the word "city", rather than "town". I was obliged to argue because of the difference between what is called essential shopping and comparative shopping.

Essential shopping encompasses items such as one's groceries. One can decide to do it all within a single supermarket and if the experience was unsatisfactory, one can go elsewhere the next time. Generally, however, after pulling up in a supermarket's car park, one does all one's shopping there. Comparative shopping is different. If one wishes to buy shoes, jewellery or fashion, one wants to be able to visit a range of shops. This is the purpose of a town centre. It was difficult to convince Waterford Corporation that it was to the benefit of the city to build supermarkets on the outskirts of the town. Understandably, it was quite concerned.

Town centres have tried to fight back and have received much support from many people who do not have a direct business interest in the issue. For a great many people, the traditional town centre provides an important focus for a community. In fact, it is the centre which helps to define the community in the first place. As someone who has developed shopping centres myself, I readily admit that it is virtually impossible to recreate in a shopping centre the same experience that one gets while walking down the main street of a thriving country town.

At present, there is competition between the two ways of doing business. I am pleased that although a few years ago, everyone was ready to write off traditional town centres, at present the outcome is not so clear-cut. The healthiest future approach would be for such competition to continue, rather than for one way of doing business to become the outright winner.

The Minister of State has referred to other countries. I wish to discuss one country which I know quite well, namely, France. Until the passage of the loi Royer in 1974, the centres of France’s towns were being devastated. One visited lovely traditional towns which no longer had a core. The same thing has also happened in many other places.

Hence, I believe in promoting competition between town centres and shopping centres on the outskirts of town. If such competition takes place, it will ensure the survival of traditional town centres. I can certainly envisage the idea of business improvement districts playing a very useful and important role. It provides an additional mechanism for businesses in a particular area to work together in their common interest and in the interest of the customers they seek to attract.

Co-operation between neighbouring traders is nothing new. The Minister of State is attempting to encourage it in this Bill. There have always been ways in which businesses could get together to work on a project that benefited them all. There are many highly successful arrangements working at present which could and should continue to work in the future. However, adding to the range of ways in which businesses can co-operate together, and particularly by providing a formal way for the local authority to engage with them, will be a very useful step forward.

Senator Brady discussed graffiti and litter, which is a good example. I have made a considerable number of visits to the Continent recently and have compared the problem there with that at home. The scale of the problem there offers a view of what is in store for Ireland if that graffiti culture is allowed to take root. Recently, in Howth where I live, an off-duty garda saw some young men painting some graffiti on a lovely white wall. Luckily enough, she was able to stop them. While the parent of one of the culprits evinced no great sympathy, the mother of the other young man did. She insisted that her son should clean it up with a toothbrush, to make him work all the harder. However, it was a reminder of what could happen if care is not taken. People can work together on problems such as graffiti and litter.

In recent times, designated tax areas have done much good for towns which may not have prospered otherwise. Three examples with which I am familiar are Kilkenny, Carlow and Clonmel. The three town centres in question were beginning to become tired and were in danger of losing out and the designation of those areas as town centres has worked out very well. In addition, the tax incentive to install multistorey car parks has also helped a great deal. Hence, the Minister of State's proposals in this Bill are a step in the right direction.

Every individual business knows what it must do to serve its own customers better from the moment the latter set foot on the premises. However, as everyone who runs a business knows only too well, many things can happen long before a customer actually gets to that point. If customers dislike an area it constitutes a significant deterrent to attracting business. On the other hand, if customers like an area and enjoy going there, it can be of immense help in drumming up business for every trader who operates there.

Working together and with the local authority, individual businesses have a great deal of control over how their potential customers view the area in which they operate. This applies to factors such as whether an area is clean and has easy parking, whether the overall environment is pleasant and attractive and whether it has promotions like Christmas lights and so on. The list of things that can be done to attract customers is endless.

However, I remember many years ago a number of businesses decided to put up Christmas lights in Dundalk and make the town more attractive to compete with places such as Newry. We discovered not everyone in the town got involved and put up lights. Clear resentment occurs when some get involved and others do not. This is an incentive to encourage everybody to get involved.

What everybody in an area has in common is the need to work together to achieve those objectives. Usually, no individual business will be able to do the job on its own. While a local authority may get involved in promoting an urban development area, in general it will tend to shirk away from promoting one area as against another, which is understandable.

That is why it is right this Bill places the main onus for the development of these schemes on the businesses themselves, rather than on the local authority. The local authority can, and I hope will, be a vital facilitator. However, it will be up to the businesses themselves to take the initiative that brings these districts into existence, and it will be up to those businesses to provide the driving force to make them a success.

I commend the Minister of State for bringing forward this idea. In doing so, he has used a technique which is a favourite of my own. Instead of trying to reinvent the wheel, one first scours the world to see whether anyone else has already risen to the challenge. The idea of business improvement districts has proved itself, as the Minister stated, in Canada and the US for more than 30 years. In more recent times it has also come to Europe including efforts in Britain, although RGDATA claims approximately 40% of smaller towns in Britain do not have a general store, supermarket or grocery store in the centre of the town. I have no doubt that with the proper promotion BID schemes can also be a success here in Ireland. It will work.

We have not done enough on subsidiarity, the EU principle of passing decision making closer to the citizen. Instead of making laws in Brussels they should be made locally. It is interesting to see local decisions being passed to traders throughout Europe. Often, traders came together and decided on restrictive opening hours, until those close to national frontiers with countries which do not have such legislation find they have lost business to those other countries.

With this Bill, which is worthy of support, responsibility will be passed to local businesses and that is likely to succeed. I wish the Bill and the scheme every success. The Minister of State's heart is in the right place and he is going in the right direction. The Bill may need correction and we had such discussion this morning. We may find on Committee Stage changes will be made but the Minister of State will be likely to respond to any suggestions.

I welcome the Minister of State to the House. This Bill is positive and the Minister of State discussed the flexibility involved for people in business, which is extremely important, as is marketing an area and providing car parking. I particularly liked the comment made by Senator Quinn about Christmas lights, which are important for the image and business of a town. Each year for the past ten years a town has been in uproar because it could not get funding for lighting. It seems a simple matter but the problem occurred because people did not come together or the organisation was not there to provide it.

One of the best examples of Christmas lighting is in Moate, which I often pass through.

Very good, I am all for Moate.

So am I.

Senator Bannon is too late. I said it first.

I am glad to receive cross-party support. The lighting in Moate makes a scheme such as this very relevant. It is a matter of traders coming together to brighten up an area and market it. The Minister of State provides flexibility and innovation in these proposals. It will give great impetus for the further development of our towns and villages. This Bill provides an opportunity to put such schemes in place. The issue of tackling the scourge of graffiti was also raised and action on that is welcome.

The Minister of State referred to the fact that businesses will vote to establish the level of support for a proposed scheme. As in a referendum, a majority is required to approve the operation of a BID scheme. That is an example of local democracy in action and it provides an opportunity for those concerned to participate in the development of their local community. When the democratic process is complete and the scheme implemented, the services will then be provided.

I am concerned as to whether this funding will be used to replace services provided by local authorities. Smaller towns may state they are not able to come up with a scheme in the same way as a larger town or city. I was not here when the Minister of State made his opening remarks, but I am sure he will reassure me that funding will not be taken from local authorities and replaced with BID scheme money. Extremely effective local authority schemes already exist, such as the urban renewal scheme and village enhancement schemes run in conjunction with the Department of the Environment, Heritage and Local Government.

The explanatory memorandum to the Bill states that the scheme began in Toronto, Canada in 1971. European countries such as Austria, Belgium, Denmark, France, Germany, Holland, Portugal and our neighbours in the United Kingdom also have frameworks to operate these schemes. We are now in line with those other countries, which is positive.

I also welcome the fact that the Bill states that special companies will be established to implement the BID schemes. These companies can be widely representative and will include local authority membership. This is another good example of local democracy. It is also a good example of the partnership approach, which is the spirit behind BIDS. These companies will be charged with ensuring the various projects, works or services making up the BID scheme voted in and approved by the local authority is carried out over a term not exceeding five years. It is critical, as it is for all elected Members, that these schemes face the electorate at regular intervals. I am pleased the Bill provides that BID schemes must have a fresh mandate at least every five years. This election will give impetus to the schemes and will probably improve them.

The research carried out on what has been done in other countries shows the extremely positive influence of BID schemes, particularly on the environment in which they operate. The Minister of State has shown great interest in the Tidy Towns competition. I congratulate all who took part this year on the great results. This scheme will further enhance the environment and tackle litter, which is still a major problem. We have seen great improvement in some towns, particularly through the scheme now in operation. However, black spots will always exist and the Department highlighted them in its approach in the past. I am sure the scheme will tackle litter.

There should be a system to keep costs down. Many businesses claim they are paying a high rate on foot of the rate revaluation system and, given that they are the only real rate payers in the country, they would like a fair and equitable system pertaining to the BID contributions. I hope the Minister of State will assure us that a double rate will not be required of businesspeople.

Another welcome development in the Bill is its provision of relief of 50% on the amount payable in cases where a property is unoccupied for the execution of alterations or repairs, if the owner of the property is genuinely unable to obtain a suitable tenant at a reasonable rent, or if the premises are vacant pending a redevelopment. Refunds of BID contributions are also available where properties are demolished or destroyed.

I will not refer to all the sections in the Bill. I was particularly interested in section 6, which removes the impediment to local authorities gaining rate income in the years following an evaluation of property in their areas. This makes sense because it removes a provision that would otherwise curtail a local authority's ability to provide services in its area simply because a revaluation of property took place, as happens quite regularly.

Section 5 contains a provision to remove a discrepancy between existing valuation law and local government rating law. This is a welcome development.

I support this Bill strongly and agree with the Minister of State and the proponents of the BID schemes that they will work in Ireland. They have worked in other countries.

This legislation is necessary and will lead to enhanced investment in our urban centres. This will be of considerable benefit to those who reside and carry out their daily trade and business in those areas. I support the Minister of State in what he is doing.

I, too, welcome the Bill, which is a very good idea. I am not the Labour Party spokesman on local government and only found out about the idea this week. I received a very helpful statement from the Dublin City Business Association explaining the concept. It made reference to its website, www.dublinbids.com, which contains a lot of information on the matter.

The schemes could benefit my community and I will therefore be calling for some in the south County Dublin area. They could be ideal for villages such as Lucan, Clondalkin, Rathcoole and Palmerstown in my area. In Lucan, the council is currently drawing up a village design statement. I proposed this idea and my father, a councillor, proposed a motion on my behalf on foot of which the idea was taken on board. The idea is that the future development of Lucan village will be based on a study that examines the character, history and heritage of the village with a view to preserving it. When the statement is ready, the businesses in Lucan, in conjunction with the council, should set up a BID scheme to do some of the work involved, taking into account the findings in the village design statement. Businesspeople in other villages in the area could engage in useful projects under this legislation.

In south County Dublin, many of the shopping centres are very stark neighbourhood shopping centres built in the 1970s. This is just the way they were designed at the time. Projects could be undertaken in conjunction with local businesses to improve these shopping centres and their immediate environment.

I am very interested in projects that would improve shopfronts and provide street furniture. I am not so sure about cleaning. It would obviously be useful in the context of particular projects but it is primarily the job of the local authority to clean streets. For example, certain villages have hand-cart personnel to clean the streets. However, there are fewer such personnel in some of the villages in south County Dublin today than there were years ago although the populations were smaller and there was less business.

The schemes should not detract from the role of the Government to fund local authorities to do their job properly. Having said that, businesses would want to take the initiative themselves in this regard because they are a factor in the production of some of the litter. A shop, public house or chipper that enjoys good business can contribute to litter in an area and businesses should take a role in this regard. We have moved away from the time when local shopkeepers did much of the cleaning of the streets around their premises — they had a much smaller task in the past. There is definitely a need for local businesses to have a common purpose in dealing with issues such as litter and the improvement of the environment. Getting together to do the job is obviously a good idea.

It is very important that, where extra funding is raised, extra people be brought in to do the work in question. Where it involves the picking up of litter, it should not be a case of paying the council to do work it should be doing in any case. The funding should be used for special projects that would not normally be carried out by local authorities.

Businesses are to vote on whether to become involved in a BID scheme and a majority vote will determine whether the scheme should go ahead. Could a business that refuses to become involved in a scheme refuse to pay the levy? How would the local authority deal with this and has the Minister of State considered it?

There are other good ideas in the legislation. Many businesspeople are resident in the communities in which their businesses are based and they benefit in this regard. It is very important that we regard businesspeople and traders as part of the community. It is good to have them working in partnership with residents and local authorities. This is a very good aspect of the Bill.

I welcome the Bill and hope the BID schemes are promoted in local authority areas outside the Dublin city area and that the concept is sold to businesses throughout the country, including in south County Dublin.

This Bill is interesting and progressive and at the same time quite homely and comforting. It is relying on an old tenet that still holds good, namely, that communities can help themselves. I am not at all surprised that the idea originated in Canada and then moved to the United States because the people in those countries are full of get-up-and-go. I understand European cities will take up the idea as well.

I commend the Dublin City Business Association, particularly Mr. Tom Coffey, who is excellent at his business and has shown what can be done with O'Connell Street when there is the will and the dynamism to put much-needed improvements in place. I am intrigued by the idea of businesses getting together and that they must have a common purpose, namely, to improve their area. Residents often get together to improve their area. A past-pupils union may want to improve its school. It is an old-fashioned characteristic of people, which is to better the community in which they live or serve. That can only be for the good because if one is imbued with that old-fashioned characteristic — I notice it on school committees and so on — it can work very much to the benefit of the entire community.

I have one reservation which I hope the Minister of State can address; Senator Kitt raised it in his contribution. The Bill states that funding provided will not be replacement funding for local authority funding. I understand funding provided will be additional to whatever will be provided by the local authority in an area. There are many ways to skin a cat, however, and I would not like to see any subterfuge in that arrangement. The scheme will flop if it is not clearly indicated what an area will get by way of local authority funding and under the bids scheme. Improvements, therefore, will be made under the bids scheme.

A plebiscite is to be arranged. Senator Tuffy made an interesting point about that. What do we do about the few down-in-the-mouth business people who will not want to be part of this scheme? They will share in the benefits, whether it is enhancement of the area by painting, street-scaping, landscaping or whatever. All businesses will be enhanced but what about those who do not want to be part of it?

The Bill forces them to be part of it.

That is welcome if it is the case but I do not know how that compulsion would work because the scheme is founded on goodwill and the wish to improve one's business, area, village or town. I know a particular part of Athlone that the scheme is well suited for and I hope the people involved will take it up with gusto but I do not know how the compulsion element comes into it. They are compelled to pay their rates; I understand that. The only people paying rates now are business people but they can be compelled to so do. This is a quasi-voluntary bids scheme and I do not know if they can be so compelled. It would be quite a difficult task.

I note that the legislative framework is in place in the United Kingdom. That is particularly useful for the character of a person living there but I have an in-built belief that Irish people like other people to do the work. They are not that anxious to get involved yet there are many others who are imbued with the get up and go characteristic and would wish to be part of it.

The Minister of State said this is a group of businesses coming together. That is not to say that a group of communities cannot come together within an area. Can it be a group of resident associations, a tidy towns association or a community council, all of whom are evident in rural Ireland and do very good work? Are they counted as businesses for the purposes of forming a bid or must they be full businesses? I would like an answer to that question because it is an important factor.

This is a very American proposal, and there is nothing wrong with that. There are 400 of these schemes in Canada and the United States because the people there are imbued with a get-up-and-go attitude. In many cases they have to be because social services are at a minimum in the US. I was appalled to learn recently that there is no child allowance or anything like that in the US. One must get on with life, do without or make do. The scheme is redolent of that feeling. There is nothing wrong with that but I wonder if the Irish people will take to it with gusto. I can see big cities taking to it with a view to parcelling out an area in which the scheme could be applied.

The scheme will require a good deal of promotion. I told a business person on the telephone this morning that I was speaking on BIDS legislation in the House today and they asked if that was something to do with auctioneers. I said it was a business improvement districts Bill, in which the business person was very interested. The Department will have to undertake a promotional drive because local radio and newspapers would be very interested in emphasising the scheme.

This is a good, homely Bill which deserves to do well. I like the idea of public consultation to get people's views on it, setting up the board, liaising with the local authority and having both local authority members on the board and the business people. The scheme is like an offspring of a chamber of commerce; I understand that is what they were set up to do. They approve of this measure, which is welcome, but a chamber of commerce by its very nature is quite amorphous whereas this scheme is more detailed and district geared. We read about districts but we do not call them districts here. In other countries they call specific areas districts, and this measure is geared towards a particular district.

I thank the Minister of State for coming into the House to introduce the Bill. I hope he can answer my questions. I wish the Bill well in its passage through both Houses and in its further progression within the local communities.

I welcome the Minister of State to the House and I welcome the legislation. It is creative and novel and can only be of help. I have a number of questions and wish to make some points. The Minister of State will not be surprised to hear that I particularly welcome the authority given to a plebiscite and the nature of it. That is something dear to my heart. My own home town is currently lining up for a plebiscite to decide on the name of the town.

Jingle jangle.

Dingle, Daingean Uí Chúis. We should continue to remind ourselves that this is Government policy, and that is a good idea.

What I like about it is that all businesses will have an equal vote in that first decision whereas businesses might have a different contribution to make when it comes to paying for it. We should look at it in a positive way, which is the way I want to look at it.

I see dangers, however, in that some people might get involved in trying to make improvements to their streets but cannot get the support of their colleagues or the other businesses in the area. I could foresee streets becoming very run down while others forge ahead. Perhaps that is the nature of competition and there is nothing we can do about it but I have to say, because I know no one else will have said it, that the fundamental question being begged is the funding and the authority of local authorities. My view on that has been consistently clear.

Local authorities are underfunded and are still suffering from the abolition of rates in 1977. We must examine issues like water rates, and I want to be clear about the way I see that working. People should not be charged for water for everyday use but if I have a fleet of cars and two swimming pools, the local authority should not have to provide the water to wash those cars and fill the swimming pools. There is something obscene about the fact that if I have a fleet of six cars and two swimming pools, the local authority provides the water to fill those pools and wash the cars and everybody is paying part of it.

I make that point deliberately, before people argue on the grounds of equity that everyone is entitled to water. Everybody is entitled to water, but the reality is that it is very costly on local authorities to provide it. The intention always was to provide water for all the valid reasons going back to the yellow plague in terms of dealing with issues such as dysentery, cleanliness, etc. However, that is now being interpreted by people to mean they are entitled to all the water they want. That was never the intention and I wish to emphasise that.

There is no other country in Europe in which water is used in the way our citizens use it. That is not something of which I am particularly proud. One sees notices on the sides of buses to the effect that water is precious and should be conserved. We need to do more than that. People should be given all the water they need for living, washing and the basic requirements of running a house. Once it goes beyond that some form of charging should be looked at. I do not want to be quoted as saying, "He is in favour of water charges". I am in favour of them in those circumstances, where a limit is put, and once that is reached then the situation must be examined.

What the Minister of State is proposing here is another form of rates. Effectively, the local council is saying that it would be great if it could introduce improvements in a particular street and do all the positive things outlined in the Minister of State's speech, with which I agree. This is what may be described as a "needs must" type of legislation. The local authorities do not have the money to do these things. Is it not the case that there has been a good deal of talk about development costs and the local development charges that have to be paid? There has to be significant understanding that they are necessary, but they are far too high.

In a recent debate Senator Bannon raised the matter of high development costs. They have increased well beyond the rate of inflation because they are trying to meet another need. If 24 houses are built in an area, the local authority gets paid a development fee from the developer. From the day the developer walks away the houses are a charge on the local authority, without any income being paid to it. Nowhere else in Europe, or perhaps the world, does this happen. It does not make any sense, regardless from what viewpoint one looks at it.

I do not suggest we start charging people for something they have always had. We need to have at least an understanding, however, as to how all these matters should be approached. It is creating an increasing drain on those councils in whose areas large numbers of houses are being built and no income is accruing from this to the local authority. I do not believe that can continue forever.

This raises the question of how we get the business community to do something. How do we get something positive done in this area? What is good about this legislation is that it will give people a sense of pride in their space, their sense of place and their area. I recently met a group of business people in Limerick who spoke about one of the weekly markets which is owned by the local authority. They want to put a roof on it because it is popular with local people. When it is raining it is not that pleasant. This an ideal example of what the Minister of State is talking about, where people come together for this type of enterprise and put all that is needed into it

I wonder, however, about the level of consultation the Minister of State might have had with local businesses about this. Those involved in the Dublin City Business Association were mentioned. However, they are not very good in terms of reflecting that view. I look at Senators Bannon and O'Rourke, for instance, and think of the town of Athlone. One might want to improve the streets in the centre of the town, given that all of the businesses have transferred to Golden Island or the new place on the other side. There are many empty shop units in Athlone that cry out for development. There are beautiful streets and lanes there. However, one wonders whether the money will be available to develop the area because in this case it is a question of whether the initiative is demand-led or supply-led.

Everything the Minister of State refers to is concerned with streets where there are active and successful businesses trying to improve their space. If one wants to breathe new life into a street, however, and create a nice shopping area, shopfront or streetscape and there is nobody there before one starts, one is on a loser. The difficulty in those cases is that streets which were not being patronised will relapse. Is there an answer or is this just pie in the sky?

One can see this happening in almost in every town in the country and it is something the Joint Committee on Enterprise and Small Business considered at length when the groceries order was under review. The joint committee considered situations where businesses move to the edge of town with the centre dying on its feet. I do not have the same concerns in this regard as other people. I have seen this happen in other countries. Over a period of years the inner part of the town tends to become a place where bijoux and specialist shops are located. It is a different type of shopping in which the big businesses are no longer involved. It is boutique-type shopping, even involving boutique hotels and various similar developments. However, this is a slow process. What the Minister of State talks about would not help to increase the pace of change because the people and the successful businesses are not there.

I wonder whether this can be extended towards improving streets and areas where there is nothing to make them more attractive. The answer, when the Minister of State comes to answer that question, is to ask from where will the money come. The money is not there. I recently met with members of local authorities just after the Minister had made the comment that they were flooded with money——

Awash with money.

Awash with money.

I foolishly took the trouble of looking at the websites of a few county councils to see where all this washed money was. I could not find it——

They are washing themselves.

I have heard Senator Bannon make some caustic comments about the fact that he could not find it either. Perhaps we are slow on the uptake but where these local authorities are awash with money I should like to know where it is kept. If they were awash with money, which is not being spent, could it not in the meantime be used for initiatives parallel to what the Minister of State proposes?

The Bill is creative, novel and worthy of all our support. I am sure there will be flaws and problems but if nothing is done mistakes will never be made. This is worth doing. We will all be keen to see how it works. Will it breathe new life into tired streets and new places?

If it is managed to put things in place under a BID scheme that creates more maintenance costs for the local authority. Is that an issue or is there an overlap? What happens if things are done the local authority would have been happening in other places? Is there duplication or replication? In terms of the list of things the Minister of State has mentioned, ranging from cleansing, promotions, special events, street cleaning, the provision of street furniture and signage, these are all matters the local authority would be doing to some extent.

The Minister of State has not explained in his speech and I do not see in the Bill where that replication is being dealt with. In the meantime I compliment the Minister of State and his officials for bring the legislation forward. It is novel and worth a try.

I thank all the Senators for their contributions to the debate and express my appreciation on what has been a useful and constructive exchange of views. While there will be some points of detail which will engage us as the Bill progresses, and on which we may sometimes have different perspectives, I welcome the generally positive reception from all sides of the House to the concept of the business improvement districts.

As well as the generally positive reaction in the House, I was heartened by the positive statements from the business community earlier this week when we published the Bill, and its wholehearted support for it. In that regard I want to join Senators Brady and O'Rourke in congratulating Mr. Tom Coffey and Mr. Paul McElearney of Dublin City Business Association for the Trojan work they have done in promoting the BID scheme concept here in Ireland.

As befits this House, the debate has given much food for thought and I will give serious consideration to the various issues raised and suggestions made. Different elements have been touched on, either by way of suggestion or seeking clarification. I would hope to deal these within the time allowed.

It is important to look at successful BID schemes. The results have been reflected in higher sales volumes in areas where they operate. Footfall levels have increased directly as a result of investment through BIDS. This is allied to the amount of time people stay in an area and the amount of money they spend in those areas has been dramatic.

Local government funding was raised by Senator Bannon and touched on by Senator O'Toole. Local authorities require sufficient funding to ensure that they can operate effectively. One success has been the ability of local government to respond to the ever-increasing demands made in recent years for improved services. These demands arise from the dramatic changes in Ireland in the last decade, such as the burgeoning population, unprecedented economic growth, higher incomes and expectations of services at local level. Local authority current expenditure amounted to €1.8 billion in 1997, when this Government came to power. This year, current expenditure by local government will amount to more than €4.1 billion. This increase in expenditure is underpinned by the funding that the Government has secured through the local government fund. General purpose grants to local authorities from the local government fund increased over this period from €340 million in 1997 to €875 million this year. This is a massive increase of 160% in the period. The unprecedented level of growth in general purpose grants far outstrips the level of growth in total local government current expenditure. This level of support, in addition to the significant investment through capital assistance for infrastructure, shows that this Government is firmly committed to financing local government.

For Senator Bannon's sake, I would like to look at Longford.

The Minister of State would like to cause a row.

County Longford has seen its general purpose grant allocation increase by 170% since 1997. This is well in excess——

We are entitled to it as citizens of this State.

—— of the national average.

The Minister of State has not explained whether he will be abolishing town councils.

The Minister of State, without interruption.

This scheme is working very effectively.

Local authority costs are driven by economic and population growth, the costs of maintaining an expanding public infrastructure, community and social needs, higher environmental standards and higher quality of life expectations. The Government is aware of the demands on the commercial sector and the need for continued and improved competitiveness to support Ireland's small open economy. Local authority charges are obviously a relevant factor in this. The level of funding made available to local authorities through the local government fund has had the effect of dampening the extent of demands on the commercial sector through rates and charges. In 1993, rates contributed 17% of total current and capital income of local authorities. The figure today is closer to 12.5%. When local authorities were adopting their budgets for 2006 at the end of last year, the Minister for the Environment, Heritage and Local Government requested that in order to support competitiveness in the economy and to protect the interests of communities, local authorities should ensure that they exercise restraint in setting any increases in commercial rates and local charges for the year.

The response to this request was very positive. To a large degree, local authorities exercised significant restraint in 2006 by imposing fewer increases than in previous years. In its 2006 budget, Limerick City Council adopted a reduction of 0.5% in its annual rate on valuation. This was a first in recent decades. To take the example of Longford again——

I think the Minister is trying to incite Senator Bannon.

He rises to the occasion very easily.

The Minister of State, without interruption.

Longford County Council increased its rates for 2006 by only 2%.

Fine Gael looks after its citizens in County Longford.

I hope the Senator agrees with me that this was largely due to the increase in funding from the Government.

It is due to good management by a Fine Gael-led council.

Fianna Fáil is paying their wages.

In any debate on the contribution by the commercial sector to local government, we must not lose sight of the fact that this Government has reduced the corporation tax rate from 40% in 1993 to 12.5% today.

The Minister of State is really stretching it now.

Local authority charges take account of local circumstances and priorities.

I think he came armed with that.

We can anticipate Senator Bannon.

They will have to bring back infrastructural development.

The Minister of State, without interruption.

Senator Kitt asked whether local authorities would have their central funding cut if the BID scheme got up and running. A key to the success of a BID is that the projects, works or services are fully additional to any such projects, works or services that are carried out by a local authority and that the relevant responsibilities of both parties to a BID agreement — the proponents of a BID scheme and the local authority — are clearly set out. The Bill provides that the relevant baseline services carried out by a local authority are set out in the BID proposal. The service to be given at any moment will be benchmarked. From there, the additions will be part of the BID programme and that will be made clear to the business community and the members of the local authority. I assure Senator Kitt that central funding will certainly not be cut as a result of the implementation of a BID plan.

Senator Brady and Senator Quinn outlined the benefits of the business improvement districts. I thank them for that and Senator O'Toole has also been very positive on the issue. This particular scheme will provide a spur to businesses in the area and will increase the overall well-being of businesses in BID communities. We must ensure that all businesses are aware of the scheme and of its advantages. We are fortunate that the chambers of commerce and other business entities are very much in favour of the scheme. We will take on board the suggestion made that local authorities and the Department advertise this. I have no doubt that in pursuing her successful return to the Dáil, Senator O'Rourke will use her newsletter to great advantage.

I was thinking about that.

The Minister of State should not forget that I will be running in the same constituency.

We will miss her in this House.

We should not count our chickens yet.

The Minister of State, without interruption.

Senators Tuffy and O'Rourke asked what happens when a business does not want to pay. The concept behind BID schemes is that they proceed when the majority of the business community votes for it to proceed. Once it commences all businesses in the area must pay their fair share based on valuation. There can be no room for free riders or otherwise the ethos of the proposal would be breached and the concept would founder.

The Bill is fairly comprehensive and should be successful. I look forward to further debate in this House.

Question put and agreed to.

When is it proposed to take Committee Stage?

Next Tuesday.

Committee Stage ordered for Tuesday, 4 July 2006.

When is it proposed to sit again?

Tomorrow at 10.30 a.m.

Top
Share