Councils around the country are wasting vast sums of money, are unfairly funded and answerable to no-one, business federation IBEC claimed today.
With manufacturing firms nationwide haemorrhaging jobs to cheaper markets overseas, the body warned local authorities were to blame for the spiralling cost of doing business in Ireland.
Around 30,000 workers have been laid off in the last three years, and in the last month alone several hundred jobs have been lost with two major factories in Donegal closing down.
Turlough O'Sullivan, IBEC director general
Turlough O'Sullivan, IBEC director general, said radical reform was needed to ensure power and responsibility went hand in hand.
He said councils had to prove that the millions of euro they earned in charges were being spent wisely. "Seeking excessive revenue from business cannot be sustained. We must ensure local authorities operate to the highest levels of efficiency".
The IBEC chief warned that everyone who uses services should pay for them or the boom in business which drove the economy will be shattered.
"The base must be broadened to include all who benefit. Failure to act risks killing the golden goose," he said.
The country's 34 local authorities spent €3.6 billion last year, but IBEC claimed they were not subject to the same scrutiny as government departments.
The body noted that the number of people working in councils had risen by 5,000 in four years while payroll costs rose at 10 per cent a year.
"Most unfairly, the cost of this mismanagement has been largely picked up by business," Mr O'Sullivan said. Firms have been forced to absorb rising costs over the last few years with manufacturers seeing the prices of their goods falling by 13 per cent since 2000.
Mr O'Sullivan said this was the opposite of how councils were being run. "Over the last three decades, the financing of local authority current spending has shifted from local electorates, to central government and now increasingly to the business community," he said.
"These charges apply to every enterprise and impose unwarranted extra costs which damage competitiveness and threaten Irish jobs. The charges are clearly inequitable."
IBEC outlined a string of charges used to keep councils funded. While accounting for a mere 8 per cent of properties and 15 per cent of water connections, IBEC said businesses paid rates, water charges and development levies.
The body claimed revenue from rates would exceed €1,000 million this year alone. Waste disposal charges are five times the UK level and Europe's highest, while the average water bill has gone up by 75 per cent since 2000.
"Ever spiralling charges, selectively applied to one sector of society are neither equitable nor sustainable and must be changed," Mr O'Sullivan said.