Call to allow local authorities to scrap council tax in favour of more local alternatives

Reform-scotland-220A think tank has unveiled radical plans which would give local authorities the power to scrap council tax and business rates and replace them with a range of other levies.

Reform Scotland has called for local authorities to have complete control over the local taxes of council tax and non-domestic rates (NDR), including the ability to alter their rate to meet local needs.

Under its proposals, local authorities would be allowed to scrap council tax and NDR, if they deem it appropriate, and replace them with a range of other taxes such as land value taxes, sales taxes and other property taxes.

In a briefing by the think tank, called Localising Local Tax, it said that local authorities in Scotland have had no real control over their own tax income for the last eight years, and criticises any plan to replace one centrally-controlled local tax with another, such as a centrally-set local income tax.

In the report, it said: “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. If the electorate disagrees, they can vote the councillors out.”

Reform Scotland’s director, Geoff Mawdsley, said: “Devolution was never supposed to stop at Holyrood. However, Holyrood has reduced control in some areas that used to be local authority responsibilities, and one of those is local taxation.

“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.

“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.”

A Scottish Government spokeswoman said: “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 Scottish Government awaits the Commission’s report, which is due in the Autumn.”


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