How should local government in Scotland be financed?

Local government funding is a hot topic in Scotland right now. We asked Holyrood’s party finance spokespeople how they think local government should be financed.

Patrick Harvie: “Reform of the unfair council tax is something Greens have long argued for. Our preference is for a land value tax which would reduce bills for most people, make big landowners pay a fairer share and stop land banking blighting our town centres. Having said that, we recognise that if local government were genuinely local and able to govern, each council would have the flexibility to raise whatever taxes it deemed appropriate. For years Scotland’s town halls have been run from the centre and it’s simply unsustainable. When we see local authorities cutting budgets, putting frontline services at risk, we must find a new way forward. We look forward to the long overdue cross-party discussions on this issue.”

Willie Rennie: “Just 18 per cent of local income in Scotland is raised through local taxation. This is significantly below that of our European counterparts. Liberal Democrats believe an entrenchment of strong communities wielding effective local powers and initiative is vital if we are to re-energise those weakened by SNP centralisation. That is why our plans set out in the Campbell Commission offered radical change which would see tax powers returned to local communities in order to put them back in charge of their own destiny.”

Gavin Brown: “Do we want genuine local government or do we want local administration? In my view, we want the former, as a democratically elected and accountable layer of government. The Scottish Conservatives are in the process of setting up our commission to examine the issue in detail in advance of the 2016 election. The system needs to decide what share of local spending should be collected by local taxation, it should respect the principle of localism, it should be durable and strike a fair balance between those who pay the tax and those who receive public services.”

Jackie Baillie: “The council tax freeze has been underfunded by the Scottish Government and that is putting significant strain on local services like education and social care. I think we need a different method of financing local government and believe that a system of property based taxation makes sense.”

John Swinney: “Local government delivers a range of services forming the bedrock of our society, so needs to be properly resourced.

“Under this Government local government has been treated very fairly, unlike their counterparts in England. My announcement to Parliament on 11 December confirmed local government’s revenue funding and capital share will be maintained on a like for like basis over the four-year period 2012-16 with the allocation of additional monies for new duties.  

“The rump of those services and functions are delivered by staff and workforce, so revenues need to be stable and predictable and thus I envisage a significant component of local government funding continuing to be based on guaranteed central resources allocated according to need.

“Additionally, local government must be financially accountable to its electorate, so it will also continue to need to be dependent on revenues determined by councils – at present this is the council tax which has been frozen since 2008-09 and fully funded by the Scottish Government helping all of Scotland’s council tax payers – and for the business rates that they collect and are all retained locally as part of local authorities’ settlement allocation.

“There is no right or wrong answer regarding the balance between centrally allocated resources and councils’ own revenues. The issues are complex and we recognise that different localities will have differing appetites for local autonomy and accountability as well as for the attendant risks that are associated with particular responsibilities.

“Our programme for government announced our acceptance of the Local Government and Regeneration Committee’s recommendation that an independent cross-party commission is established to consider alternatives to the council tax.”