Scotland politics

Councils 'should be given more power', report says

Houses Image copyright PA
Image caption The tax raised on house sales could go to councils instead of central government

Councils should be able to raise most of the money they spend from local taxes, according to a report on the future of local government in Scotland.

A commission on improving local democracy says there should be far more grassroots control over the cash available for services.

It says there should be no place for a nationally-imposed council tax freeze.

It also suggests power over some other taxes could be moved from central government to councils.

The Commission on Strengthening Local Democracy was set up by local government organisation Cosla to try to find ways of giving local communities more power.

It spent a year gathering evidence and producing the report. It is intended to provoke debate on how local government and democracy might change after the independence referendum, regardless of the result.

Cosla has yet to reach a view on its conclusions and stresses the commission operated independently.

In its final report, the commission argues there has been a 50-year "flirtation with centralisation" in Scotland which has failed and that local government and communities have gradually been stripped of many of their old responsibilities.

The commission calls for a system where local government has a guaranteed, protected set of powers and responsibilities - in theory, local government could currently be abolished by central government.

Before 1975 there were more than 200 councils in Scotland - most towns of any size had a council in addition to county councils. Now there are 32 councils which, at present, have identical responsibilities.

The report argues that Scotland is one of the most centralised countries in Europe and that changing that would help address major social problems.

The report also calls for a fundamental review of the structures, boundaries, functions and democratic arrangements of both local authorities and other local public services.

It says this should be based on several principles: for instance that power lies with people and communities and that decisions should be taken as close to communities as possible.

The current arrangements for local government finance are identified by the commission as the biggest limitation on local democracy.

The vast majority of council funding comes from the Scottish government. Typically just 18p of every pound councils spend comes from the council tax.

Community decision

The council tax has not gone up since 2007. Critics argue central government holds the strings and complain the terms of the council tax freeze made it all but impossible for councils to reject it.

The commission - chaired by Cosla president David O'Neill but independent of the organisation - included representatives of all the major political parties and others from across civic society.

The report does not actually say taxes should rise - only that communities should be able to decide on the issue.

However, any move to give councils or local communities more power would, by implication, require central government to hand it down.

The idea is that councils would receive significantly less money from central government but would have power to raise something like 60% of their budget depending on what they thought was right.

Options might include:

  • Councils having complete freedom to set the council tax and set the different bands in response.
  • Power over stamp duty - so the tax raised on house sales goes to councils not central government.
  • Business rates varying across the country - and the money raised from them staying with each council. It is claimed this might help grow local economies.

Away from finance, the commission has shied away from firm conclusions but argues that, compared with many other European countries of a similar size, Scotland, with 32 councils, has too few councils - not too many.

'Real opportunity'

Councillor David O'Neill, chairman of the commission, said: "The report we publish today is the culmination of an intensive year of work. The commission members have thought long and hard about the content of this report and its recommendations.

"We are under no illusion that today's final report is radical in its content and that we are making a very difficult ask of people to approach the recommendations with an open mind.

"We fully understand that it is very difficult to throw off the shackles of what are the culturally normal ways of looking at issues."

Mr O'Neill said improving local democracy was vital to improving the lives of some of the poorest and most vulnerable in society.

He makes the point that the gap in life expectancy between the best and worst off in society has widened in the 34 years he has been a councillor despite the best efforts of everyone in the public sector.

He added: "If we are apathetic we will get the democracy we allow. The current period of constitutional debate and creativity creates a real opportunity to get the democracy we want."

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