Councils would be better off if they received 100 per
cent funding from the government, Sir Peter Burt has told leading council tax
and revenues officials.
He said the balance of funding between local and
central government was a “complete irrelevancy” and added: “It has no merit and
it’s not something that the average council taxpayer cares about in any shape
or form.”
Sir Peter, who chaired the local government finance
committee which proposed a new local property tax, was speaking at the Institute of Rating Revenues and Valuation (IRRV)
conference at Crieff.
He rejected the argument that local accountability would
be improved if councils were able to raise more from local taxation. Orkney and
the Western Isles were two authorities in Scotland which probably had the
greatest electoral input even though most of their money came from the government
– 90 per cent in the case of Western Isles, with less than 10 per cent coming from
council tax.
Sir Peter added: “Balance of funding is something
that is dear to politicians’ hearts but it does not bother the man in the street
at all. The problem goes back as far as Layfield [the local government
commission which reported in 1976] and it has not been resolved yet – the relationship
between local and central government.
"The real problem in my view is the fact that local
government has very little control over what it can spend its money on.”
Sir Peter pointed out that council leaders had
suggested that well over 90 per cent of local government expenditure in
Scotland was restricted by statutory requirements, ring fencing, specific
grants, guidelines and general central government controls.
He said: “Unless that changes then we will see no improvement.
Local government would be a great deal better off, and I suggest that the
electorate would be a great deal better off, if all the money was raised
centrally and distributed to councils on a one-line budget so councils can
decide exactly how they would spend the money to meet the requirements of local
people.” Sir Peter said “that is what we will see” if the SNP plan for a
Scotland-wide local income tax of 3p in the pound on earned income went ahead. But
he added: “Sadly, I don’t see local authorities being given a great deal more
discretion on how they spend the money.”
He argued that a local income tax would be fair only if
it were applied to all income rather than to earned income only.
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