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Section 21: Summary of Recommendations
Section 5: The Role and constitutional position of local government in Scotland
Recommendation 1: It appears to us, from widespread evidence we have received from local government, that there is a corrosive argument about the relationship between central and local government. If this is so, then in order to resolve the argument, the Scottish Parliament, the Scottish Executive and the local authorities must grasp this nettle. Unless and until they do so, the underlying problems and consequent less than optimal structures will remain. The Committee cannot emphasise too strongly their recommendation that action must be taken quickly. Transforming Public Services283 is both a welcome and necessary first step but a resolution must be achieved.
Section 10: A local income tax
Recommendation 2: We recommend that a local income tax should not be introduced, either as a replacement for council tax or as a supplementary tax.
Section 12: Current council Tax
Recommendation 3: We recommend that council tax should not be retained in its current form.
Section 14: A Local Property Tax
Recommendation 4 : We recommend that a new local property tax ( LPT) should replace council tax. LPT would be assessed as a proportion of the capital value of homes in Scotland.
Recommendation 5 : We recommend that the LPT should be payable with no discount for second and subsequent homes.
Recommendation 6: We recommend there should be regular statutory revaluations not less than every 5 years; ideally on an annual basis.
Recommendation 7: We recommend that all council taxpayers should be offered the option of paying LPT in 12 or 13 instalments and consideration should be given to making this option available under the council tax from 2007-08.
Section 15: Council Tax Benefit
Recommendation 8 : We recommend that measures - including possibly rebranding the benefit as a tax rebate - to increase the take-up of Council Tax Benefit and its equivalent under LPT should be agreed and implemented as quickly as possible by DWP, the Scottish Executive and local authorities.
Section 16: Pensioner households
Recommendation 9: There is no valid justification for introducing any discount scheme covering all pensioner households irrespective of their income and we recommend that no such scheme be introduced.
Recommendation 10 : Nonetheless, to address problems that face pensioner households that are relatively asset-rich and income-poor, we recommend that consideration should be given to the introduction of an optional deferment scheme for pensioner households who own their own homes.
Recommendation 11: We recommend that consideration be given to introducing an optional deferment scheme as soon as possible to enable eligible households to defer current council tax payments.
Section 17: Business taxation
Recommendation 12: We recommend that non-domestic rates should be retained as the basis for local business taxation.
Recommendation 13: We recommend that the non-domestic rate should continue to be set by the Scottish Executive.
Recommendation 14: We recommend that non-domestic rates should be extended to vacant or derelict land, as an incentive for re-development.
Recommendation 15 : We recommend that consideration should be given to introducing a discretionary power for local authorities to apply a tourism tax.
Section 19: Equalisation
Recommendation 16: We recommend that equalisation of financial resources remains as a central feature of the local government finance system. Any departures from "full" equalisation should be very much at the margin.
Recommendation 17: We recommend that, in consultation with COSLA, Ministers should consider the possibility of passing responsibility for the distribution system to an independent body or, alternatively, appointing independent members to the existing Scottish Executive/Local Government Committee which oversees the system.
Section 20: Water and sewerage charges
Recommendation 18: We recommend that the statutory requirement upon local authorities to collect water and sewerage charges alongside council tax bills should be removed.
Recommendation 19: For as long as local authorities remain under a statutory duty to collect water and sewerage charges, action is required to improve the current system. We recommend that the formula for calculating collection payments to local authorities should be reviewed, to give greater allowance for the collection of charges from households in receipt of Council Tax Benefit. We also recommend that the council tax and water charge elements of the bill be distinguished more clearly.
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