Reform Scotland

New deal for councils

A New Deal for councils is the key to greater local accountability, says Reform Scotland

Councils must be given greater freedom to provide services and raise more of their own revenue, a new report from the independent think tank Reform Scotland says today. [mon]

The report, ‘Local Power’, calls for radical reform of local government in Scotland designed to bring power closer to people.

In contrast to the SNP Government, which has ruled out fundamental structural reform, the report says the relationship between Holyrood and local government needs to be reshaped with far more power being devolved to local communities.

These recommendations are in line with the decentralisation of power seen in many other countries and will help to deliver better public services in tune with the needs and priorities of local people.

‘Local Power’, Reform Scotland’s third report since being launched earlier this year, welcomes the Scottish Government’s new ‘Concordat’ with local authorities, particularly because it greatly reduces ring-fenced funding. However, central government still exerts unnecessary control over their activities, with councils having little control over raising revenues. The percentage of tax revenue raised locally in Scotland is amongst the lowest in Europe.

Reform Scotland argues that we need to go much further and introduce fundamental reform which returns power to local people. This greater direct local accountability was found to be one of the keys to better public services in Reform Scotland’s last report ‘Power for the Public’.

Today’s report recommends a new constitutional relationship between the Scottish Government and local councils set out in legislation, based on:-

• Local authorities being able to take action in the interests of their community unless specifically prohibited from doing so by a wider authority, which is the principle governing the relationship between Westminster and the Scottish Parliament.
• Tasks being carried out at the lowest level possible – the principle of subsidiarity.
• Councils providing clear and transparent information on their activities to ensure proper local accountability.

It goes on to recommend greater financial responsibility, with councils over time raising at least half of their own revenue because this is essential to enhancing their autonomy and accountability. In addition “ring fencing” money from the Scottish Government’s block grant should be ended to give councils discretion as to how that funding is used.

Commenting on this greater financial responsibility, Ben Thomson, Chairman of Reform Scotland said:

“If we are going to make our public services more efficient we need to push down power to a local level and make them accountable.

“By giving local authorities greater financial power, so that over time they raise the majority of their own revenues, they should become more responsive to the local communities they serve.

“A first step to greater financial accountability would be to return business rates to local control. This would have the benefit of encouraging councils to work with local businesses to improve the local economy because they would receive the higher revenues generated by a more vibrant economy.

“However, taxes such as the Local Income Tax proposed by the Scottish Government that are centrally set, do nothing to give local authorities more control and therefore have no advantage over the current system while causing the usual difficulties of introducing a new tax system.

“Greater financial accountability will give councils a far greater incentive to provide high quality services and real value for money. It should also enhance competition from area to area and thereby drive taxes down. This competition should make particular areas more attractive to people and businesses in the same way as one country competes with another to attract investment.”

The report adds: ‘Effective councils come in all shapes and sizes. There is plenty of scope for power to be devolved closer to people in Scotland as currently the lowest executive tier of government is far more remote than that of other countries.

‘Where there is a demand, local communities should be given the right to acquire powers over local services such as planning, recreation and primary education which are controlled by very local councils in countries such as Sweden, France and Norway.’

Equally, local communities should have the right to decide if they would like a directly-elected Provost or Mayor to run their local authority. Such a figurehead could help to strengthen accountability and could well prove a popular and effective form of local government particularly in Scotland’s main cities.

The report calls for the Scottish Government to organise referendums in Aberdeen, Glasgow, Dundee and Edinburgh to see whether local residents wanted their own directly-elected leaders.

Ben Thomson said:

“The new relationship between Holyrood and local government should be based on the principle of power being exercised at the lowest possible level with local authorities having much greater freedom to set their own tax levels so that they can raise the bulk of their revenue.

“This, together with our other recommendations, is a recipe for the revival of local democracy in Scotland, bringing many benefits. It will enable us to deliver better public services for local communities that are better suited to the needs of the local area, to reduce the huge bureaucracy needed to oversee the current centralised system of public service delivery and it will help to restore faith in our political system by bringing government closer to the people.”

Commenting on the report, Councillor David Parker, leader of Scottish Borders Council, said:

“The Reform Scotland paper raises some interesting questions for local government, and its ideas about empowering communities and bringing local government services closer to the public are very welcome.

“Clearly, since the advent of devolution, there has been no significant review of local government in Scotland and there would be many benefits to the Scottish government and local government working together to look at how to strengthen local government for the people that it serves.”



Most Scottish councillors feel they are too much under the control of Holyrood, according to a study carried out by Reform Scotland.

175 councillors responded to the survey (almost 15% of all councillors) with the results showing that a clear majority feel local authorities must have greater autonomy.

It found that:
• Nearly seven in 10 [69%] felt that councils did not have enough autonomy from the Scottish Government to run services.
• Six in 10 [60%] considered that turnout at local elections could increase if councils had greater autonomy.
• Eight in 10 [80%] believed that local government needed more power to raise more of their own income.