Meeting of the Parliament 21 February 2018
I agree that local government faces significant pressures. Some of them relate to rising costs and some relate to our expectation of a fair pay settlement. However, those pressures cannot be related to cuts to the core funding through the Scottish Government’s local government finance order, because we have ensured that that funding is going up, not down.
When it comes to the longer-term picture, we need to unite. Whatever we disagree on about this budget, we need to unite in saying that the Scottish budget process must not become an annual rearguard action against local government cuts because the fundamental situation that local government remains in is one of utter dependence on Scottish Government revenue. Local government in Scotland has such limited financial powers that, in many other European countries, what we call local government would not be recognised as such.
Local government ought to have a far greater ability to make its own decisions on local taxation and other fiscal issues. Those are issues on which there should be agreement across the political parties. I welcome some of Labour’s proposals on what it has called—although it is not—a land value tax. I would like to see a levy on vacant derelict land and a real land value tax, but we know that it would take time to legislate for those and to implement them. I want to see progress on that.
I also want to see progress on the recommendations that were agreed across the political parties by the commission on local tax reform, which the Scottish Government and COSLA created and which recommended, centrally, that the current system of council tax must end. All of us, with the exception of the Conservatives, entered into that review, and all of us who took part in the process entered into it in good faith, as did local government. The review’s recommendations cannot be allowed to gather dust on a shelf. Therefore, today, I have written an open letter to the First Minister, setting out a range of proposals that must be adopted if we are not to be in a situation, year after year, in which Scottish budget debates become debates about how much pressure to push down the chain to local government.
We should set a target for the percentage of local government finance that is raised locally. We should introduce a new fiscal framework between the Scottish Government and local government that is underpinned by the incorporation into domestic law of the European Charter of Local Self-Government. We should secure a commitment to multi-year—indicative, at least—funding settlements from the Scottish Government, baselining the additional funds that have been won this year so that they can be relied on in the future. We should commit to legislating during the current parliamentary session to replace council tax with a fairer system. Again, the consultation, legislation and implementation will take time, but the initial steps must be taken if we are to make progress.
The Scottish Government promised us a fundamental review and reform of non-domestic rates. Instead, the Barclay review was incredibly limited and narrow, so the wider question remains. As well as a vacant and derelict land levy, new fiscal powers need to be created in order that we can have local government that is truly worthy of the name and a system in which it is not entirely dependent on centralised decisions being made by the Scottish Government.
If there is progress on that local tax reform agenda over the coming months and during the course of this year, the Greens will again be able to enter budget negotiations—but that, I am afraid, will be a precondition.
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