William Eichler 15 April 2019

Report calls for ‘fundamental review’ of council funding

Report calls for ‘fundamental review’ of council funding image

A new report has called for a review of local government funding in Scotland and argues there needs to be a fairer system of property taxes and environmental charges.

Unison and the Jimmy Reid Foundation are today launching a new report which argues that councils have borne the ‘heaviest burden’ of austerity.

The total revenue funding for councils has fallen by 8% in real terms across eight years, the report states.

There has also been a 22% reduction in culture and leisure spending; a 34% reduction in planning; almost 15% reduction in roads spending; and almost 10% in environmental services spending.

In this context, Unison and the Jimmy Reid Foundation set out a number of proposals for reforming council organisation and funding.

As well as a new system of property taxes and environmental charges, the report urges unions to consider how municipalisation of buses, energy, and other public services could be appropriately pursued.

It also suggests that unions and others should explore how local authority debts and PFI/PPP contracts can be taken over by the Treasury. This would save local government ‘many billions’ in interest charges each year.

‘Over the years, the balance of funding for public services through local government has shifted from approximately 50% coming from national government to 50% being raised directly by local authorities, to 85% of funding coming from central Government and 15% being raised directly by local authorities,’ said Mike Kirby, Scottish secretary of Unison.

‘Together with an overall reduction in funding, during a period of austerity, this has resulted, in severe financial pressures and impacted upon, the quality and delivery of vital public services.

‘Politicians in all spheres must create the time and space for a fundamental review of funding local government. This report is a contribution, to that essential debate.’

Professor Mike Danson, the lead author of the report said: ‘Within the constraints of the fiscal powers devolved under successive Scotland Acts, there are still some opportunities to generate greater funding for public services locally.

‘Some changes will require time to explore, plan and introduce but it is economically efficient and effective to shift the tax burden onto property and land owners and away from council taxpayers, making the tax system more progressive and more based on ability to pay.’

In competition with the PWLB image

In competition with the PWLB

Christian Wall considers what alternative funding channels are available to local authorities beyond the Public Works Loan Board.
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