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Development Charges Slashed By 25PC

Thursday, 22 July 2010

IN a move which aims to create jobs and stimulate business, Offaly County Council this week decided to slash development charges for commercial building by 25 percent.
The recession-busting measure will see the levy for industrial and commercial construction fall from €53.20 to €40 per square metre.
The dramatic reduction in the development contributions, introduced amid much controversy a number of years ago, was welcomed by all members but some councillors called for the charges applicable to private housing to be cut as well.
There was no change but a commitment was given to review the residential development charges in the next six months.
Council chiefs told a meeting of the local authority on Monday that dropping the levy for commercial development will make Offaly the most competitive part of the Tullamore-Athlone-Mullingar 'Midlands Gateway' region.
The equivalent charge for Mullingar is €42.79 while the required contribution from expanding businesspeople in Athlone is €42.75.
The charges currently in place were adopted in March, 2008 when economic circumstances were 'much different', Monday's meeting heard.
Declan Kirrane, deputy county manager, explained that all local authorities had been asked by the Government to see what they could do to help businesses, hence the proposal to cut the charges.
‘Development contributions are one element in costs, albeit a small proportion of cost,' said Mr Kirrane.
While seeking a reduction in the charges, a balance also had to be struck with the need to protect the council's revenue.
Since the charges came in, significant amounts of income has been generated by the charges and in turn this money is ploughed in the county's infrastructure, including water supply and waste treatment.
‘It has allowed many projects to be undertaken in that time,' said Mr Kirrane.
The charge for residential development is €8,040 for each new house which avails of the public water supply and Offaly County Council sewage.
New one-off houses in rural Offaly which have their own wells and septic tanks are subject to a much lower charge, €2,520, and these account for the vast majority - 85 percent - of single-house planning applications.
Mr Kirrane repeated that he hoped the reduction in the commercial charges would help the local economy.
‘We hope it'll be successful and it will generate some of that activity but it is very difficult to predict,' he said.
The proposed reduction must go for public consultation for a six-week period, then come back before the council for consideration and adoption, so it will be September before the reduction actually takes place.
It emerged on Monday that even though the council's own planning committee recommended the cut in charges, the decision was not a unanimous one.
Cllr Eamon Dooley, chairman of the council planning SPC (strategic policy committee) said a long discussion had taken place on the matter and its main focus was to support business while also protecting the council's capital programme.
Cllr Dervill Dolan, a member of the committee, said he welcomed the reduction. 'It does send out the right signal to people whether they're doing some type of industrial or commercial development,' stated Cllr Dolan.
He then revealed that he was in favour of reducing the residential development charge as well, saying it would 'send out a very positive signal to somebody building a house'.
Cllr Molly Buckley suggested that the residential charges should be looked at in six months' time while Cllr Tommy McKeigue said the proposed cut did not go 'far enough' and he sought a reduction in the charge per house to €7,000.
Cllr Butterfield, a member of the planning SPC, said he had always believed the development charges were 'penal'. 'Now we have a situation which is at least improved,' he said.
In a thinly veiled reference to supermarket giant Tesco, which he described as a 'certain multiple', he claimed they were closing down small shops and 'emptying out places like the centre of Tullamore'.
Cllr John Carroll said the charges had been doubled in 2008 and he noted that Birr had 'three major industrial units empty'.
Cllr Carroll indicated that he wished to have both commercial and residential charges reduced at the same time.
Given the discord among the members, the council chairman, Cllr Barry Cowen, asked why the SPC had not come forward with a recommendation to cut the residential charges if they were 'so adamant about it now'.
Cllr Eamon Dooley remarked that he 'thought he had agreement' on the issue and added that they had decided to revisit the question of the residential charges, possibly in the New Year.
The county manager, Pat Gallagher, while saying that the councillors had the power to review the development contribution scheme at any time, advised caution.

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