Mark Whitehead 08 December 2017

Watchdog calls for more transparency over non-domestic rates distribution

Watchdog calls for more transparency over non-domestic rates distribution

The Scottish Government must be more transparent in the way it reports on its non-domestic (business) rates, the official financial watchdog has warned.

In a new report, the auditor general Caroline Gardner says the Holyrood government's account showed a £297m deficit at the end of 2016/17, meaning it had redistributed more income from non-domestic rates in recent years than councils had collected.

She notes that although the Scottish Government has signalled its intention to bring the account into balance over a number of years, it had no formal plan to do so.

Ms Gardner said information about non-domestic rates, which are collected by councils and pooled by the Scottish Government before being redistributed back to local authorities, was fragmented across several accounts and budget documents.

But she suggested the establishment of the Scottish Fiscal Commission, which will provide independent forecasts of non-domestic rates, offered an opportunity to increase transparency.

She said: 'The arrival of new financial powers brings significant changes and increasing complexity to the Scottish budget.

'Better and more transparent information about the key components of the budget, including non-domestic rates, is essential to supporting effective parliamentary decision-making in this new environment.'

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