One in five businesses in Dublin city is failing to pay commercial rates owed to Dublin City Council, according to the council's 2013 debtors report. By the end of last year, businesses had accumulated debts of just under €74 million in unpaid rates on properties such as shops, offices, restaurants and hotels, making them the largest group owing money to the council. Total gross debts owed to the council at the end of December lst stood at just over €247 million.
Other substantial debtors include property developers who owe just over €22 million in levies on commercial or residential schemes granted planning permission by the council, and social housing tenants, who owe more than €20 million in rent arrears. Housebuyers who took out mortgages with Dublin City Council are more than €13 million in arrears.
Businesses also owe the council is also owed €16.5 million in water charges. Businesses have been paying for water for several years. Responsibility for water charges and liabilities has transferred to Irish Water.
Government debt
The Government owed the council more than €21 million at the end of last year for money spent on projects such as the regeneration of Ballymun and various housing, road and other projects requiring capital investment. These are recoupable debts but the council only makes the claim to the relevant government department after it has paid contractors. Those debts are the only ones the council expects will be paid in full.
On the €247 million debt, the council has made bad debt provision of 54 per cent. However for some categories of debtor, the proportion the council expects to have difficulty recovering is far higher.
On the levies owed by property developers, the council has made a bad debt provision of 80 per cent, for commercial rates, the provision is 73 per cent and for its housing rents and mortgages, it is 60 per cent.
Day-to-day expenditure
The council says this does not equate to "writing off" the money owed. It says it maintains a bad debt provision against outstanding arrears so it can ensure it has enough cash to meet day-to-day expenditure.
In relation to commercial rate-payers, the council says it will pursue debts in the courts. However it says it is conscious of the hardship experienced by some companies in recent years and offers ratepayers the option of a monthly direct debit scheme to pay down the debt.
More than 3,500 companies have signed up to the scheme.
The council uses a “mortgage arrears resolution process” in relation to those in arrears on their housing loans, it also enters into individual agreements with tenants who are behind on their rent.
