20 February 2004
Details of an inquiry into local government finance in Scotland are likely to be announced by the Scottish Executive within a few weeks.
Consultations on the scope of the inquiry, which will investigate a wide range of issues including the future of the council tax, are currently taking place between the Executive and the Convention of Scottish Local Authorities (Cosla).
A commitment to holding an inquiry was contained in the partnership agreement between the Labour and Liberal Democrat coalition Executive following the Scottish Parliament elections last May.
There has been a delay of almost nine months in announcing the remit, although an Executive spokesman said this week that the details were likely to be given 'within weeks rather than months'.
Further demands for a replacement of the council tax came when Cosla last week published figures showing that bills will rise by an average of 4.4% in 2004/05. However, protests have been more muted than in England, where the increases last year were considerably higher.
Although the average Band D tax in Scotland has gone up by 4.4%, there are wide variations. The new Band D levels vary from 1.9% in Glasgow to 9.8% in Moray.
Finance Minister Andy Kerr has asked Moray Council and Aberdeen Council – which has imposed an 8.6% rise – why bills have increased beyond the levels they provided in indicative figures given under the three-year budgeting system. However, Kerr has ruled out capping.
Labour ministers in the Executive are reluctant to rush into any major changes and are likely to favour additions to the existing bands and a property revaluation rather than a full-scale replacement.
But it is an issue that is almost certain to divide the coalition Executive, since the Liberal Democrats, like their colleagues south of the border, are committed to replacing the council tax with a local income tax. The Scottish National Party, the main opposition party in the Scottish Parliament, is also calling for abolition.
The Labour-led Cosla favours an increase in the number of bands, especially at the lower end, but opposes replacing the council tax. Local government finance is devolved and Scotland could have a different system from south of the border if the Parliament so decided.
PFfeb2004
