Council tax ‘could be scrapped’ under new plans

Reform Scotland is calling for a revamp in the way local government is financed. Picture: Esme Allen

Reform Scotland has called for a revamp in the way local government is financed, arguing that Scotland’s 32 councils should be handed total control over local taxation through a range of other taxes.

Under the new plans, authorities could set their own council tax rates or get rid of them entirely in order to raise cash through other means.

Reform Scotland said councils needed more freedom over local taxation so as to be able to deliver core services under tight financial restraints.

The thinktank said that countries of a similar size to Scotland such as Finland, Norway and Denmark all had greater local control over tax and that devolving more financial powers to local authorities would make councils less reliant on government funding.

In a new report, Reform Scotland says: “Leaving aside the merits of particular small taxes such as bed taxes, Reform Scotland believes that local authorities should be able to introduce such taxes if they feel they are appropriate for their area.”

The report will be handed to the Commission on Local Tax Reform - set up in 2014 by the Scottish Government and Cosla - which is probing alternatives to the council tax.

Council tax has been frozen in Scotland since 2007.

The report also calls for the devolution of council tax and non-domestic rates, saying that authorities would ‘have the ability to take local priorities and circumstances more fully into account’.

Reform Scotland chief Geoff Mawdsley told The Herald: “Our local authorities have become powerless to make a real difference to their local communities because they have no real control over the amount of money they tax and spend.

“It is time to give them the ability to make a difference, and the starting point on the road to genuine local fiscal responsibility is to give councils complete control over council tax and business rates.

“Scotland is significantly behind other similarly-sized countries in the area of local devolution. The Scandinavian countries, for instance, have far more tax income controlled at a local level. Restoring genuine local fiscal responsibility should be our aim.”

A spokeswoman for the Scottish Government added: “Scottish Ministers consider the current council tax system as a whole to be unfair. That is why, along with our local government partners, we have established the cross-party Commission on Local Tax Reform to examine fairer alternatives.”

The Commission on Local Tax Reform report is due out in autumn.

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