The Covid-19 effect: Council loses €19m so cuts on way

September 29th, 2020 10:10 PM

By Kieran O'Mahony

Cork County Hall, headquarters of Cork County Council

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A WEST Cork councillor has said that ordinary taxpayers should not be hit in the pocket as a result of a €19m shortfall in Cork County Council’s forthcoming budget.

Cllr Paul Hayes (Ind) said that he was referring to reports that next year’s budget would see vital services such as roads, public lighting, housing repairs cut as the Council seeks to balance its books.

Cork County Council has seen its income shrink this year due to the Covid-19 pandemic as it has suffered a loss of rates and incomes from parking and other revenue streams. And it said it was also facing an estimated bill of over €5m to repair regional and local roads, predominantly in West Cork, following last month’s devastating flooding.

Over €4m worth of damage was experienced in the Skibbereen electoral area alone, and over €627,000 in the Bantry area. And now, a proposed hike to the local property tax (LPT) of 15% has been mentioned as one way of bridging the funding gap.

‘This will only bring in a few million – and I certainly wouldn’t support this as it’s hitting residents with another charge and with Covid-19, many household incomes are down across the board,’ said Cllr Hayes.

Cllr Hayes said it’s about time central government stepped in. He has called for the 20% of the LPT which is sent to Dublin annually to be returned to Cork County Council.

‘We only keep 80% of it, and we need to pester our Cork-based TDs to ensure it is kept here. There should be a special dispensation this year … we need it all.’

Cllr Hayes added that the government could borrow from the EU at a time when interest rates are at an all-time low.

Cllr Declan Hurley (Ind) said we were now seeing the ‘stark reality’ of the knock-on effects of Covid-19.

‘At it stands, each directorate is being asked to cut 14% of its services across the board but even that won’t make up the shortfall. We’re facing into a global recession and I don’t think we will see the effect of that this year – more than likely it will be in the first quarter of next year,’ said Cllr Hurley.

‘It’s the worst place you could possibly want to be from a councillor’s point of view when you are trying to represent the public and provide services when you haven’t got the money. There are going to be hard decisions and they may not be pretty.’

Cllr Hurley said that even factoring in a possible 15% increase in the LPT, which will only bring in €4.8m, coupled with reserves of €7m and widespread budget cuts, it still won’t bring the Council close to ‘balancing the books.’

He said the Council isn’t a position to borrow as it doesn’t have the revenue to make any repayments on the borrowings.

Last week head of finance Lorraine Lynch warned councillors about the effects of Covid-19 expenditure.

She said that over 75% of all ratepayers have qualified for the rates waiver scheme, which is leading to a loss of €22.75m, or 20% of the current rates income for the year. She also noted many businesses may not re-open at all.

Councillors are set to meet next Monday in County Hall to debate whether to vary the LPT for the forthcoming year.

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