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Dublin: 19 °C Friday 25 July, 2014

Opinion: We can’t afford to take a single job for granted, as recent painful history has shown

All too often businesses fail for lack of advice or appropriate mentoring at their early stages – Local Enterprise Offices are responding to this need.

Image: Sergey Nivens via Shutterstock

LAST WEEK THE Irish people had their say on how they are represented and how the important issues in their locality are addressed by their Local Authority. A dominant issue of national and local discussion has been employment, how to support existing jobs and how to provide new ones. Given the renewed focus on a local approach, where does your Local Authority fit into this equation?

Traditionally, local authorities are seen as service providers in their communities covering everything from street lighting and planning to motor tax and roads. In terms of engagement with business, local authorities are often seen as being reliant on local economies as opposed to being a central driver of economic activity.

At the most basic level however, local authorities are major employers in their community, supporting direct and indirect employment. In many cases, this local spend has equivalent impact to a major Foreign Direct Investment employer, acting as a boon for local business.

At a broader level, local authorities facilitate growth by working with other State agencies in supporting investment decisions. This practical support underpins many major jobs announcements such as Eli Lily in Cork, Pay Pal in Dundalk and Kerry Group in Naas.

What more can be done locally?

While major jobs announcements are needed and very welcome – our capacity to create jobs through growing existing businesses and supporting new ones will form the backbone of our economic recovery.

All too often businesses fail for lack of advice or appropriate mentoring at their early stages. For the person taking the leap and starting their own business, accessing enterprise supports needs to be as simple, positive and coherent as possible.

Responding to this need, the roll out of Local Enterprise Offices (LEOs) is bringing together the local knowledge and existing business supports of county councils with the skills of Enterprise Ireland to provide 31 experienced teams across the country.

For those trying to start or grow a business the new structures present a much more effective way to access vital supports including capital grants, training programmes and business mentoring – the idea is as simple as it is potent, all information and direction in one building. These activities can be daunting for some clients, but the new system will cut down on the time it takes to identify the appropriate supports and how to get them – be it market research, legal obligations, risk identification or sales planning advice.

For the entrepreneur with the idea and the potential, there will always be issues that they haven’t considered. The aim of the LEOs is to provide streamlined access to the right information and support so they can get on with the job of developing their business.

Importantly, the establishment of the LEOs will mean that all categories of business – including sole traders, micro businesses and small and medium sized companies – will have access to Government supports and advice. Previously some businesses – for example, companies who were too large to access County Enterprise Board supports, but were not exporting and therefore did not qualify for Enterprise Ireland supports – fell through the cracks between different agencies. Thankfully this will no longer be the case.

Commercial rates

The development of the LEOs is one key element of local authorities’ role in actively supporting enterprise and investment in their localities. This is an important positive change but any discussion of the relationship between local authorities and business in their localities inevitably contains a discussion on commercial rates. This is an important issue and has been the subject of considerable commentary recently as rates are seen to account for an increasing proportion of local authority budgets. This is, however, not due to increasing rate charges but instead a decline in other local authority income.

In response to the cost pressures on businesses, the vast majority of rating authorities have frozen or reduced commercial rates – including 87 out of the 88 rating authorities either reducing their annual rate on valuation or freezing it in 2013.

Between 2006 and 2012 average collection rates for Commercial Rates fell by a fifth, down from 93.3% in 2006 to 74.2 % in 2012. Taken together, both the fall in collection of rates and the cost of bad debts serves to exert further pressure on local authority finances.

Like business, local authorities been responding to these changed circumstances and in recent years, have seen a 23% fall in staffing levels and also delivered efficiency savings of €839m nationally.

With the launch of the LEOs, local authorities are again responding to changed circumstances and needs – and in doing so are striving to develop and grow their relationships with local business and enterprise.

The future

It is extremely clear from our recent history that we cannot afford to take a single job for granted. The impact of each existing job supported or new job created means more money, more confidence and more people circulating in our towns and villages.

Building on the recovery underway in our economy requires local authorities to leverage their local knowledge and provide support services that deliver real value and benefit to local enterprise.

On their side business should make full use of these services as they seek to create sustainable local jobs.

Through collaboration and new ways of working together, business and local authorities can harness their respective strengths to improve towns and villages around the country. Now, more than ever, local authorities are open for business.

Peter Hynes, Mayo County Manager and County and City Managers Assoc. Committee on Community, Social and Economic Development.

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