Councils should be given the power to abolish council tax and replace it with another levy, a leading think tank has proposed.
A paper by Reform Scotland suggests the power to replace other local taxes like non-domestic rates (NDR) should also be transferred to the country’s 32 councils.
The paper argues that although councils have the ability to vary council tax to some extent, they have been hamstrung by Scottish Government caps.
Reform Scotland believes control over the levies like council tax and NDR should be handed to councils in their entirety.
The proposal is contained in a submission to the Local Government and Communities Committee of the Scottish Parliament, which is conducting an inquiry into the long-term financial stability of local government.
The committee has asked how councils can respond positively to current challenges and what practical steps they can take to “future proof” themselves against foreseeable financial risks. Reform Scotland’s view is that there can be no future-proofing at local level without meaningful financial levers.
Reform Scotland’s Director Chris Deerin said: “Devolution will remain incomplete until Holyrood relinquishes taxation powers to local authorities in order for them to be able to react to local circumstances, which vary wildly in different parts of the country.
“This should include council tax – a local tax in name only. The council tax freeze, and since then the cap in increases, ties the hands of local authorities. They should be given total control over it, and be able to cut it, increase it, scrap it and replace it.
“Only this will future-proof local government against local financial risks.”
