14 September 2007
The local government balance of funding issue is 'irrelevant' and it would be best if all the money were raised centrally and distributed to councils, Sir Peter Burt has told leading revenue officials.
Burt – who chaired the Scottish committee of inquiry into local government finance, which reported in November 2006 – was speaking at the Institute of Revenues Rating and Valuation Scottish conference at Crieff last week.
He told his audience: 'The question of balance of funding is a complete irrelevancy. It has no merit and it's not something that the average council taxpayer cares about in any shape or form.'
Burt pointed out that the two councils in Scotland that probably had the greatest electoral input were Orkney and the Western Isles, despite the fact that nearly all of their money came from central government – 90% in the case of the Western Isles.
He added: 'Balance of funding is something that is dear to politicians' hearts but it does not bother the man in the street at all. The problem goes back as far as Layfield [the local government commission which reported in 1976] and it has not been resolved yet.
'The real problem in my view is the fact that local government has very little control over what it can spend its money on.'
Burt said local government leaders had suggested that more than 90% of local government expenditure in Scotland was restricted by statutory requirements, ring-fencing, specific grants, guidelines and general central government pressure.
'Unless that changes, we will see no improvement. Local government would be a great deal better off, and I suggest that the electorate would be a great deal better off, if all the money was raised centrally and distributed… on a one-line budget so councils can decide exactly how they would spend the money,' he said.
The Burt committee had called for council tax to be replaced with a new local property tax based on a proportion of the capital values of homes.
The Scottish National Party government at Holyrood plans to introduce a local income tax, an alternative that the committee rejected.
Burt told the IRRV conference that he was convinced that a property tax remained the most efficient tax available.
PFsep2007
