Galway Chamber of Commerce has hit out at the council's decision to keep the annual commercial rate increase at 3.8 per cent.

Michael Coyle.

Chamber Chief Executive Michael Coyle said the increase did not do enough to make up for the hardship imposed on local businesses during the cryptosporidium outbreak.

"We have lobbied Galway city councillors and the officials of the city council to ensure restraint in any increase in commercial rates due to the very difficult year that businesses in Galway have experienced.

The maintenance of the rate increase at last year's figure of 3.8 per cent is a measured response, however we continue to question the spiralling cost base of Galway City Council, whose expenditure for 2008 will increase to over €90 million, of which local businesses will contribute €30 million."

Proposals to increase rates by 4.9 per cent were vehemently opposed by city councillors at the City Council Budget meeting on Monday night.

Councillors said that Galway's business community had suffered enough with the cryptosporidium outbreak in the past year, and it would be unfair to penalise them further with a higher increase in rates.

Concerns were also expressed at Monday's budget meeting about Galway's allocation of capital from the Local Government Fund, with many smaller cities, including Limerick, receiving larger sums.

Mr Coyle said he shared these concerns and urged the government to rectify the situation.

"Galway Chamber is also concerned that Galway, as a massive net contributor to the Central Exchequer, is not getting its fair share of the Local Government Fund, the direct funding mechanism from central government to local authorities.

"Government will fund Galway City Council in 2008 to the tune of just over €9 million, whereas local business will contribute €30 million. Galway Chamber will continue to lobby national Government on the reform of local government funding, which is ultimately the solution to the problem of local businesses 'balancing the books' for local authorities," he said.

However, he welcomed the news that the ten per cent reduction of water rates introduced in the wake of the cryptosporidium outbreak would continue into 2008. The commercial water charge will now remain at 0.99c per cubic metre, a saving of 25 per cent for local businesses.

"The Chamber welcomes the decision by city council to reduce water charges for 2007 by ten per cent and to hold those charges for 2008. This represents a 25 per cent reduction in water charges to businesses, but it doesn't go far enough in light of the significant costs borne by businesses during the problem months," he said.

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