Reform of local government funding is now urgent

Andrew_Burns_9_200x200As the City of Edinburgh Council meets today to set its budget, council leader Andrew Burns says the system of local government funding is now broken, and without immediate reform the damage will be irrevocable.

 

Our local Budget will be formally decided at today’s Special Full Council Meeting at 10am. All the relevant reports and papers are available on the council website.

I want to emphasise just how serious this situation is. I have blogged before about why I’ve long-believed local government funding is broken, but I’m sadly more convinced than ever after this year’s financial settlement.

I’ve been a local councillor since the very first days of devolution, being elected to the City of Edinburgh Council in May 1999 at the same time as the Scottish Parliament was established. And there is just no doubt that this year’s local budget settlement has been the most challenging I’ve had to face in those near two-decades of public service.

I think it important to stress that I say all of this, as my close colleagues well know, as someone who has only ever had an interest in local politics, never having had (nor never will have) any aspiration or desire to be a Holyrood or Westminster politician. Those establishments are Parliaments and they legislate. Councils deliver local services, and that’s where my interest has always been and will remain.

So, it frankly pains me that this year’s budget settlement from the Scottish Government is going to damage those local services. And I am now more certain than ever that the system of local government funding in Scotland is broken.

No longer is this a minority view. The recently published Commission on Local Tax Reform jointly chaired by a serving Scottish Government minister and the serving President of COSLA, concluded thus:

“The present Council Tax system must end, with any replacement designed to be fairer, more progressive and locally empowering.”

But this is not only about Council Tax. As the Local Tax Commission concluded, change also needs to be ‘locally empowering’. They recommended not just changes to the main element of revenue raising, but also that all local authorities should have access to a range of local tax varying options. Paragraph 13.15 says:

“We have identified that taxes on property, land and income are the three potential tax mechanisms that have the revenue raising capacity to match the present system. Broadening the local tax base could include environmental, resource, sales or tourist taxes, as appropriate to local circumstances and local authority decisions. We see no reason in principle why such options should not be identified, developed, and, if found to be workable, made available to Local Government. These options would not be anticipated as forming the main basis for local taxation, but could, in addition to the aforementioned options, make a contribution to local revenues.”

Well, this could have been enacted by the Scottish Parliament at any time since May 1999. Local government finance is totally devolved – but all four post-devolution governments failed to act.

It simply cannot be sustainable that Scottish Local Authorities have control over only 18% of their revenue-raising, whilst most other similar levels of local government in western Europe or northern America have control of circa 40%.

Frankly, devolution from Westminster to Holyrood is all well and good, but we urgently now need further fiscal devolution from Holyrood to Scotland’s 32 Local Authorities. The Scottish Government needs to let go. After all, isn’t that, put simply, what they want Westminster to do?

The status quo is just no longer acceptable. An 18th year of stasis on this issue will start damaging local services irreversibly. The system of local government funding in Scotland is broken. It needs to be reformed and that reform now needs to happen urgently.

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16 thoughts on “Reform of local government funding is now urgent

  1. Labour councils have proven time and time again they cant be trusted to run local council budgets. Their answer now is the same as its always been. Allow them unfettered power to increase local taxation and they will exponentially above the rate of inflation and way above what most people can afford to pay.

    Its their only solution to their incompetence in being unable to make the best of available funding. That coupled with their inbuilt default corruption and laziness in looking for more acceptable solutions to local problems.

    The bottom line is Labour councils cant be trusted not to bankrupt us all with the power to increase taxation.

    1. So Mike, I guess you would disagree with this statement:

      “A revenue cut of this scale would be very damaging for jobs and services within Scottish local government generally, and here in Edinburgh specifically – the harsh reality is that this will translate to real job cuts that hit real families, in real communities throughout our capital city. Everyone will be hurt by this.”

      Those are the words of Sandy Howat, the Deputy Leader of the City of Edinburgh Council.

      1. Good Morning El Capitano or should I say Godfather or Don for short what’s with this Edinburgh mafia is scene have you got them all lined up on a conveyor belt and just press the button and roll another one out, first we have had Ma Gilmore followed by the grand oracle and soothsayer of Scotland DrArthur followed by lefty the stooge Murray followed by never heard of him SNP whinging Bad Bad Bad Burns who next from Capo di tutti capi?

        “The present Council Tax system must end, with any replacement designed to be fairer, more progressive and locally empowering.”

        As the Edinburgh Tory Red Mafia know full well that the SNP Scottish Government and the wonderful First Minister Nicola Sturgeon have this all in hand just wait then read and enjoy the SNP manifesto.

      2. “Those are the words of Sandy Howat, the Deputy Leader of the City of Edinburgh Council.”

        So what? You’re still unable to refute the fact that Labour increase local taxation while simultaneously reducing local public services by privatising them thereby Proving there is no direct link between greater taxation and better public service provision under Labour.

        Public services reduced at the same time as taxation is increased is criminal corruption not management.

  2. The fact that Labour support privatising local public services at the same time as pushing for greater local taxation to pay for the services no longer in the public sector proves how utterly corrupt and dishonest they are.

    Give us more money to pay for the services we no longer have to pay for is basically what they are asking for while you have to pay the private consortium for the services on top.

    The sooner Labour are forced into oblivion the better off we will all be.

    1. In fact, during the last administration in Edinburgh, the SNP group proposed privatising refuse services, and only backed down at the last minute under sustained pressure from the Labour group and trade unions.

      1. In fact, during the last administration in Edinburgh, the SNP group proposed privatising refuse services, and only backed down at the last minute under sustained pressure from the Labour group and trade unions.

        In fact Duncan you’re deliberately bare face lying your arse off again. Its more a compulsion with you these days rather than a necessity.

  3. I am all for greater responsibility for local councils managing more of the revenue raised in their area…..

    with a few provisos

    1) Councillors need to be legally responsible for balancing the books, currently the can and do regularly run over budget leaving the Governments to pick up the tab, if they face legal prosecution for failing to balance the books through negligence then there would be far more accountability

    2) Councillors must be legally responsible and face prosecution for negligent appropriation of funds to capital projects especially in the face of cuts to frontline services.

    3) Councils should be open to review by the Scottish Government and Audit Scotland and legally obliged to implement management restructuring as there is, in many councils, a bloated management structure that is rarely trimmed to protect frontline services from cuts.

    The current situation where Councils and Councillors can mismanage and negligently oversee the allocation of funds without fear of personal responsibility and legal culpability for their decisions is definitely untenable

  4. Andrew Burns’ problem is that voters don’t trust Labour at local council level. Well thats not entirely acurate, voters dont trust Labour at any level of government.
    We all know now through painful experience what Mr. Burns means, ‘broadening the tax base’ is another Labour euphemism for more taxes.
    I don’t know if Mr Burn’s wants to get relected next year but if he is he is going about it in a strange way.

    1. “A revenue cut of this scale would be very damaging for jobs and services within Scottish local government generally, and here in Edinburgh specifically – the harsh reality is that this will translate to real job cuts that hit real families, in real communities throughout our capital city. Everyone will be hurt by this.”

      1. The ratio of public sector workers in Glasgow (dont know about Edinburgh) is 2 private sector to one public sector. This percentage is too heavily weighted on the shoulders of the private sector worker. So revenue cut good.

  5. Scottish Labour announced a review of local government finances something like a decade ago.
    Is it too soon to ask if they have reached a conclusion yet?

    By the way, how much has local government finances been cut in England? How does that compare with Scotland?
    I only ask because Labour and the BBC don’t make the same fuss south of the border.

    1. the word “reform” as depicted by the Labour party lexicon actually means something along the lines of the exact opposite of reform.

      Take Labours proposals to “Reform” the House of Lords for example. What “reforms” have they actually made? They’ve continued to populate it with party members donors backers friends and supporters.

      This gives us a clue as to what they means when they say they want to “Reform” local Government funding.

      It means they want to give it infinite public funding via revenues.

      Need money? Take as much as you like from the tax payer without answering to anybody or worrying about the consequences to the public while continuing to ensure public local services make their way over to the Private sector to keep those future peer donors and backers happy til we get them into the House of Lords.

      There’s that Red Tory thing again.

      1. I do admire your ability to turn raising taxes into evidence that Labour is Tory. And by admire I mean laugh at in an uproarious fashion.

        For your information, Labour’s reforms to the House of Lords included removing the vast majority of hereditary Lords. Clearly reform stalled and didn’t go far enough, but the implication that Labour didn’t reform the House of Lords is as dishonest as the suggestion that raising taxes on the rich makes us Tories.

        1. Duncan Labour increased the membership of the House of Lords during their time in both Government and opposition. They are still at it. They talk “reform” when they use to talk abolish and they talk reform by increasing the number of peers in the house.

          So when we hear Labour talk about “Reform” we know its Labour speak for increasing be it peers taxation or poverty levels.

          How very Red Tory of you. Not something anybody in labour should be laughing about. The fact that you do says it all.

          No doubt you’d kill yourself laughing if labour ever did get to increase local taxation above the rate of inflation again and again and again.

          Me I will just keep on laughing at the fact that they never will again this side of Independence.

        2. “The implication that Labour didn’t reform the House of Lords is as dishonest” etc———-that passage is all we need to know about Labour.
          There are nearly 860 non elected people sitting in this chamber
          Most are political cronies of this or that PM, rewarded for compliance to that PM’s will.
          Many others will have “purchased” their titles with moneys paid to this or that political Party.
          10% are still hereditary Peers.
          Some are religious figures–all from ONE religious order.

          Many of then just show up for a minute or two to access their very generous daily allowance, and take their chums for a heavily subsided meal ( and drink—their champagne bill is huge).
          Many conduct a business from the premises, or use the address to impress gullible clients.

          None of it is to do with democracy.

          I you consider this as “reform” then that explains a lot, Duncan!

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