Council finance overhaul is now long overdue

Think tank ideas on ending impasse between Scottish Government and local authorities may benefit both sides

Last week it emerged Scottish council leaders had been unable to set budgets for the year ahead because of ongoing uncertainty.

They also demanded the flexibility to raise council tax by five per cent above the Scottish Government’s freeze.

You do not need to look far to see the impact of the dire state of council funding in neighbourhoods across the country. More closures of community facilities look certain in the weeks and months ahead.

Council leaders are demanding another meeting with Finance Secretary Shona Robison to plot a way out of the mess.

But the problem is not just lack of funding but a lack of freedom given to local authorities over how much is raised and how it is spent.

Yesterday, a report by Gordon Brown’s think tank, Our Scottish Future, sought to tackle the issue

Its headline recommendation is to scrap council tax after 2026 Holyrood elections, and said that before that election there should be efforts made to “build a cross-party consensus” on a new system of local taxation. But it also says councils should be given the power to join together and form Scottish Combined Authorities – allowing authorities to collaborate and pool resources.

Importantly, it suggested councils be given greater financial discretion, with multi-year budgets to councils to “allow them to plan properly”. At the same time, it said ring-fencing of funds – where they are designated for a specific purpose by central government – must be “radically reduced”.

Our Scottish Future chairman Professor Jim Gallacher comments today: “Just as Scotland doesn’t want Westminster to tell Holyrood what to do, so it’s time for Holyrood to stop telling our local leaders how to manage their business. Maybe then, the Scottish Government could do its own job better too.”

It is clear the current council finance arrangements are inadequate, and that an overhaul is long overdue. The proposals in this new paper may not be the answer, but it certainly looks like a reasonable place to start.