Builders owe City Council over €5m in unpaid levies

Date Published: 10-Jun-2010

By Darragh McDonagh

Galway City Council is owed more than €5 million by developers who have failed to pay development contribution levies in respect of building projects on 66 sites throughout the city.

Court proceedings have been instigated against developers in 17 cases of non-payment of the levy, which is payable to the local authority prior to the commencement of construction.

The City Council has been described as “lax” in their pursuit of the monies and accused of favouring big developers, who were allowed to defer payment of the levies while small builders were required to pay the full amount upfront.

“The council has been lax in the way they have done business and they should have been managing this issue with a much tighter rein,” said Cllr Padraig Conneely.

“It has been an unfair system by which the big developer was able to dictate his own terms, while the small fellow was forced to pay whole amounts upfront. And it is the big developer who has walked away now and cost the city millions.”

A spokesman for Galway City Council said that it was at the discretion of the local authority whether to demand full payment or allow a developer to pay in instalments.

“Where the amount due is relatively small, it would generally be expected that it would be paid upfront, but development levies in large-scale developments tend to be worked out on an instalment basis,” he stated.

Ten court proceedings have been initiated by the council against developers who have failed to pay contribution levies worth almost €900,000, while court orders have been successfully obtained in relation to seven planning sites to the value of around €482,000.

“Galway City Council is going to find itself at a loss,” said Cllr Conneely. “These levies were accrued during the Celtic Tiger era when money was plentiful and the council would have got the money if it had been collected then as it was supposed to be.

“Now we are in the midst of a cash-flow crisis, struggling to provide essential services, and these vital funds are sitting in developers’ pockets,” he added.

Cllr Conneely called on the City Council to “up their game” and undertake a major drive to recoup the outstanding development contribution levies. A similar drive by Sligo County Council gleaned €630,000 in the first six months of this year.

“This is money that could be used for social housing or other services and must be aggressively pursued straight away,” he warned.

For more on this story, see the Galway City Tribune