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The Minister for Communities (Ms Wendy Alexander): Yesterday marked a renewal of Scottish democracy. It is fitting that our first task with our full powers is to continue that process of renewal by considering our relationship with the other democratically elected tier of government in Scotland–local government.
Local government is of crucial importance to every person in Scotland. It provides democratic leadership for cities, towns and communities. I applaud the work undertaken by committed councillors from all parties and recognise the hours that are given up, the service that is offered, the good work that is done and the achievements in building stronger communities.
Through the dark times in the 1980s it fell to local government to uphold the values of fairness, justice and opportunity. Those values are close to the heart of many members in this Parliament and we are now charged with upholding them. As we forge a new democracy, we know that our ability to deliver better services to the people of Scotland depends on the dedication of those who provide local services.
It is time for a new partnership, not of words, but of actions. Today I want to describe how the Executive will build upon the McIntosh proposals, and indeed go beyond them, to ensure that local government takes its rightful place at the heart of the new Scotland.
I want today to pay tribute to the work of Neil McIntosh and his team. The principle underlying their report is parity of esteem: a meeting of equals, with mutual trust and respect on both sides.
We will shortly publish a consultation document setting out how the Executive plans to develop the McIntosh recommendations. In the partnership document we promised an immediate programme of change in response to the McIntosh report; we will honour that commitment.
I now want to make a number of announcements that will build on the McIntosh recommendations, none of which featured on the radio this morning. McIntosh asked us to consider his recommendations as a package and we have done that.
I will start with a matter that the McIntosh report does not deal with directly but which is of much wider importance. The Executive and this Parliament expect the highest standards throughout the public service. We therefore intend to change the previously announced local government ethics bill to a local government and public bodies ethics bill. We will hold further discussions with interested parties over the next few weeks, including discussions on the scope for a statutory code of conduct, and proposals that the new standards commission for Scotland should have powers to investigate issues of probity concerning members of public bodies.
Good local government demands good leadership, and as part of our agenda for change I have asked the Deputy Minister for Local Government, Frank McAveety, to establish a new leadership forum, bringing together ministers and all 32 council leaders. The first leadership forum will convene in September, and at that time we will unveil a package of support for member and officer development.
In line with our commitment to community planning, I want to consult carefully on the case for a power of general competence. We will consult further on that important issue.
The heart of McIntosh is a process of self-renewal for councils, rather than prescribing changes in law. I am happy to endorse that process of self-renewal. We need structures that support change, rather than obstruct it. The current committee system was designed for the 19th century, not the 21st. The public sees delays, bureaucracy and confusion. We welcome McIntosh's recommendation for councils to move towards executive systems that formalise the existing political leaderships. Some councils have already begun to reform in that way. I want all councils to think about following suit. We recognise that no one structure will fit all but, in future, the Scottish public want to know when decisions are taken, how they are taken and who can be called to account for them.
However, once again, we want to go further. We want to raise aspirations, set ambitions high and enthuse members and officers, so before setting up the McIntosh panel of advisers on new structures we want to encourage some fresh perspectives from individuals who have led effective reorganisations and cultural change in their own organisations. I am delighted to confirm that the first two champions for change will be Brian Souter and Doug Riley. Other champions of change from the public and voluntary sectors will follow.
Modernising structures should be a priority for every council. McIntosh offers a time scale for action, and we accept it. We expect all councils to embrace reform by the end of 2000, and we will take steps to monitor progress and secure results.
There are several areas in which I would like the Local Government Committee to inform the process and lead the public debate. I have in mind issues such as the operation of the covenant and the joint conference, the arrangements for local elections and the political restrictions on council officers. The arguments concerning council employees standing for election are complex. No decision has been taken on that matter, but there is evidence that the current arrangements on political restriction are not working: of the 184 appeals since it was introduced, 161 have been upheld. Clearly, there is a case for reform.
McIntosh has made significant recommendations in relation to community councils. Again, I accept them all, but I want to go further. As Minister for Communities, I am acutely aware of the need to involve people in decision making. No one has a monopoly on wisdom, so we will cast the net wide. We will include the full range of community organisations, such as tenants groups and housing associations, and make use of new mechanisms, such as citizens' juries.
McIntosh also suggested that councils should be elected for a four-year term. I am sympathetic to that case, but the discussion must also address whether those elections should be held midway through the parliamentary session, as McIntosh suggests, or coincide with the Scottish Parliament elections, to reduce voter fatigue and increase turnout.
The challenge underlying all of McIntosh's recommendations is how we renew local democracy in Scotland. That can only happen if we make public service more attractive to those who might be attracted to serve in it. That should be the backdrop to the question of electoral reform and the recommendations on proportional representation.
The partnership document committed us to progress on electoral reform. McIntosh has argued the case for it. His report asks us to look at the most appropriate voting system for Scottish local government. That we shall do. Today, I am announcing the formation of the working party that McIntosh recommends. It will be cross party, and the chair will be Richard Kerley.
The working party will have three crucial tasks. First, it will consider ways in which standing as a councillor can be made more attractive to more people.
Secondly, it will advise on the appropriate number of members for each council, taking account of the different characteristics of cities and rural authorities. On electoral reform, it will take into account the criteria that were suggested by McIntosh: proportionality; the councillor-ward link; fair provision for independents; allowance for geographical diversity; and a close fit between council wards and natural communities.
Thirdly, the working party will advise on an appropriate system of remuneration for councillors. Because we want to see real leadership properly rewarded, there will be an independent element in the setting of allowances that takes account of the available resources.
We will ensure that the working party has access to the widest possible range of expert advice and analysis, and we look forward to receiving its report.
Finance was not included in McIntosh's remit, but we take seriously his view that financial matters are a vital part of the agenda for change. Today I simply want to lay out the Executive's general approach; my colleague Jack McConnell will want to consult further over the summer.
The central financial challenge for local government is the same as that which faces this Parliament: how do we achieve better government, rather than bigger government? I want to congratulate local government on its recent achievements. Since 1997, average council tax increases have been halved and halved again, to a figure this year of only 2.6 per cent. Best value is now delivering real improvements in services.
We recognise that many aspects of the present financial arrangements need to be addressed, and that we can work closely and constructively with local government on that. We intend to respond to McIntosh's call for a review by pressing ahead vigorously with action on a number of fronts.
First, the reviews of distribution arrangements that were begun after reorganisation in 1996 are under way in conjunction with the Convention of Scottish Local Authorities, and should be completed as soon as is practicable. We are also undertaking a review of the capital finance system, which will continue.
Secondly, we are about to embark on a revaluation of business rates. Differences between the commercial property markets of Scotland and England are likely to lead to different rate poundages in the future as at present, even when the intention is to raise identical sums. That being the case, the Executive believes that it would be wrong to create any further turbulence for business by altering the national regime for non-domestic rates at this time.
Thirdly, there is a modernising agenda for local government finance. We in Government have ideas, councils have ideas and third parties have ideas. We must examine how local government can benefit from the long-term stability that we have brought to national financing. We must also investigate how we can pool funding streams between central government, local government and other public agencies, to deliver savings and joined-up Government, and look at new ways of drawing in private sector resources. Finally, we must examine whether business improvement districts could promote closer working between councils and the businesses in their area.
All that adds up to a serious and heavy agenda for local government finance. We will pursue it vigorously and keep the area under review. In partnership with COSLA, we will progress the priorities that I have outlined.
In conclusion, the McIntosh report contains many recommendations. Among them are many things for which local government has lobbied over many years. I have not been able to mention every one of the recommendations, but I can confirm today that the Scottish Executive proposes to accept the overwhelming majority of them. Today is a good day for local government in Scotland.
I started by talking about the need for partnership. The partnership will come alive not simply by providing modern services, but when all Scotland's politicians live up to the challenge of co-operating to tackle the root causes of the poverty and social division that scar Scotland.
Our challenge as politicians, whether local and national, is to deal with those old problems in new ways. We will look for trust instead of distrust, for mutual respect instead of mutual suspicion, and for partnership instead of conflict. Individuals will not always agree, but will strive in partnership for common goals.
What we are proposing today will bring fundamental change to local government across Scotland. I hope that the 1,222 councillors of all parties will join us in renewing local democracy to meet the challenges of the 21st century.
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