Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The Commissioner for Valuation has sole responsibility for all valuation matters and the Valuation Act 2001 comes under the aegis of my colleague, the Minister for Public Expenditure and Reform.
The property’s valuation, together with the annual rate on valuation (ARV) decided by the elected members of each local authority in the annual budget, determines the level of rates to be paid. Rates income is a very important contribution to the cost of services provided by local authorities such as roads, public lighting, development control, parks and open spaces. Locally elected members adopt the annual rate on valuation they consider necessary in order to provide the required services.
The Water Services Act 2013 provided for the establishment of Irish Water and enabled the Commission for Energy Regulation (CER) to advise on the regulation of water services. I will shortly be publishing further proposed legislation to give effect to the transfer of water services functions currently with 34 local authorities to Irish Water from 1 January 2014. Part of this transfer will include arrangements for the transfer of assets, including water services infrastructure, to the new public utility from that date.
The proposed legislation will also assign responsibility to Irish Water for the provision of water services and will provide for the establishment of an economic regulator for water services within the CER. While the primary function of the CER will be to protect the interests of customers and to ensure that a consistent and appropriate level of service is provided to them, it will also be responsible for approving the tariffs to be charged by Irish Water. In fulfilling its functions, the CER will have regard to all of the commercial costs incurred by Irish Water, including the payment of commercial rates.
The establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing from 2014. The 2014 Local Government Fund General Purpose Grants will be announced in due course.
