Calls for new property tax to boost Scottish council funds

A new system of property tax and environmental charges should be introduced to boost Scottish council funding, according to a report.

A new system of property tax could be introduced to boost funding.

Trade union Unison and the Jimmy Reid Foundation are launching a joint paper today calling for a “fundamental review” of local government funding.

It sets out recommendations of what can be pursued as a means to increase council service spending, including the recruitment of staff to ensure revenues are collected and the introduction of new levies.

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Mike Kirby, Scottish secretary of Unison, said: “Over the years, the balance of funding for public services through local government has shifted from approximately 50 per cent coming from national government to 50 per cent being raised directly by local authorities, to 85 per cent of funding coming from central government and 15 per cent being raised directly by local authorities.

“Together with an overall reduction in funding, during a period of austerity, this has resulted in severe financial pressures and impacted upon the quality and delivery of vital public services.”

Professor Mike Danson, the lead author of the report, added: “Within the constraints of the fiscal powers devolved under successive Scotland Acts, there are still some opportunities to generate greater funding for public services locally.

“Some changes will require time to explore, plan and introduce but it is economically efficient and effective to shift the tax burden on to property and land owners and away from council taxpayers, making the tax system more progressive and more based on ability to pay.”

Other recommendations include looking for more effective support for private and social enterprises, while unions should consider how municipalisation of public services could be appropriately pursued as well as how local authority debts can be taken over by the Treasury.

An expansion of local public services is possible with a “fairer system” of property taxes and environmental charges, according to the report.

Councils are to receive £11.2 billion in 2019-20 through the local government finance settlement.

This is a “real-terms” increase in both revenue –1.2 per cent – and capital funding – 21.5 per cent – compared to the previous year.

A total of 20 local authorities have chosen not to increase council tax by the full 4.79 per cent permitted.

A Scottish Government spokeswoman said: “We will, this year, formally consult on the principles of a locally determined tourist tax, in addition to supporting a Green amendment to the Transport Bill that would allow councils to choose whether they wished to introduce a workplace parking levy.”