Data Centres Generate €62.5 Million for Local Councils Annually

Data centres are contributing significantly to local authority budgets in Ireland, generating an estimated €62.5 million each year through commercial rates. A recent investigation by The Journal Investigates highlighted how these facilities are becoming a vital source of revenue for councils, allowing them to fund essential services such as housing, environmental programs, and community transport.

The investigation mapped all operational data centres in Ireland, utilizing over 25 years of planning records. By cross-referencing this data with property valuations provided by the state agency Tailte Éireann, the research established a clearer picture of the financial impact these centres have on local authorities. Each local authority sets its own commercial rates, which, when multiplied by the property valuations, determines the amount owed by data centre operators.

Major Contributors to Local Budgets

The bulk of commercial rates income from data centres comes from three local authorities: South Dublin County Council, Fingal County Council, and Dublin City Council. These councils host the majority of Ireland’s 89 data centres, primarily located in industrial estates on the outskirts of Dublin. Notably, South Dublin County Council alone is projected to earn over half of all commercial rates from data centres, largely due to a significant cluster in Clondalkin, which includes major facilities operated by Microsoft, Amazon, and Google.

A spokesperson for South Dublin County Council stated, “Data centres make an important contribution towards the funding of the local authority.” The spokesperson emphasized that the income generated through commercial rates is essential for providing “much needed essential services to the community.”

Economic Impact and Future Concerns

Other notable clusters contributing to local council revenues are located in Blanchardstown and Clonshaugh. These areas are home to multiple data centres, which collectively provide millions in commercial rates. A spokesperson for Fingal County Council commented on the benefits, stating, “Income received from rates contributes to a huge range of services.”

While the income from data centres is substantial for some councils, it represents a smaller share for others. For instance, approximately 20% of commercial rates income for South Dublin County Council is anticipated to come from data centres by 2025. In Meath County Council, this figure is close to 17%, primarily due to significant facilities operated by Meta and Amazon.

Nevertheless, experts caution against an over-reliance on income from data centre operators. Patrick Bresnihan, an associate professor at Maynooth University, expressed concern that such dependency could leave councils vulnerable if operators choose to relocate. “We shouldn’t be deepening our dependency on these companies,” Bresnihan stated. He highlighted that the increasing role of data centres in the national electricity grid adds another layer of concern regarding sustainability and governance.

Bresnihan described the growing reliance on data centres for funding as a form of “privatisation by stealth.” He explained that if local authorities become too dependent on commercial rates from these enterprises for essential services, they might find themselves at a disadvantage in negotiations.

To address these concerns, increasing funding to councils through government grants could reduce their reliance on data centres while simultaneously enhancing budgets for local infrastructure and amenities. A spokesperson from the Department of Housing noted that local authorities derive income from various sources, including government grants, which have recently surpassed commercial rates as the main funding source for councils.

The findings from this investigation illustrate not only the financial implications of data centres for local councils but also the potential long-term consequences of an over-reliance on this revenue stream. As the landscape of technology and infrastructure continues to evolve, local authorities may need to reassess their funding strategies to ensure sustainable growth and service provision.