‘Councils should have the power to raise taxes and make more decisions for themselves’

SCOTTISH councils should be handed the power to decide how they raise their own taxation, a leading centre right think-tank has claimed.

Reform Scotland will this week publish a report “Renewing Local Government” aimed at giving powers to councils north of the Border to make more decisions for themselves.

The idea builds on the new powers in the Scotland Act which was passed this month, which allows for greater variation in local and devolved taxation.

But the report will note that so far, the focus has been on the Scottish Parliament’s financial accountability, and Reform Scotland’s Devolution Plus proposal to make it more responsible.

However, the think-tank believes equally that a similar principle should apply to local government.

The report’s radical proposal could see a council decide to adopt a property tax such as the Council Tax or a land value tax or instead opt for an income tax, a consumption tax or a basket containing a number of different local taxes.

The report is the first foray into local taxation since the SNP abandoned its efforts to introduced a centralised local income tax set by Scottish ministers at 3p.

Despite winning a Holyrood majority in 2011 the proposal has not been brought back mainly because it would have left a financial blackhole of an estimated £1 billion.

Reform Scotland’s chairman Ben Thomson, a former merchant banker who has worked with SNP First Minister Alex Salmond on bringing forward ideas on devolution max, said: “No-one likes paying taxes; however what people really dislike more is seeing their money spent inefficiently and with little accountability. If more taxes were the responsibility of local councils then they would become more accountable.”

He added: “If a council felt their residents’ preferences and the local economic circumstances dictated that Council Tax should be abolished and replaced with an income tax, sales tax or something else entirely, they should be allowed to do just that.

“Councils would bear the risk, but also reap the reward of the decisions they make. Local people would be much closer to the decision-making process and have a better chance of influencing it. And our whole system of local government would benefit from some real, meaningful local accountability.”