03 February 2005

S2M-2318 Local Government Finance (Scotland) Order 2005

Scottish Parliament

Thursday 3 February 2005

[THE PRESIDING OFFICER opened the meeting at 09:30]

... ... ...

Local Government Finance (Scotland) Order 2005
(SSI 2005/19)

The Deputy Presiding Officer (Trish Godman): The next item of business is a debate on motion S2M-2318, in the name of Mr Tom McCabe, on the Local Government Finance (Scotland) Order 2005, and one amendment to the motion.


... ... ...


Stewart Stevenson (Banff and Buchan) (SNP): As we are in some danger of indulging in navel-gazing, I want to begin by quoting an external view from the most recent edition of Holyrood magazine. It says:

"As expected by some, the establishment of the Parliament has resulted in the centralisation of power,"

which, as we have just heard, is firmly supported by Murdo Fraser,

"an increase in"


"to develop the Executive's priorities and a growth in central dictat."

The article continues:

"This year will also see the Executive squeeze local government for a disproportionate share of efficiency savings."

Those are not my words; they belong to an analyst who is outside the narrow confines of this debate.

Mike Rumbles: Name him.

Stewart Stevenson: Interestingly, the article does not come with a name. I, too, will be interested to find out who wrote it. The point, of course, is not who wrote the article, but the fact that someone outside the Parliament who observes what we do is seeing the same things that we see.

The whole subject of local taxation is under review by a very excellent fellow called Peter Burt, who used to be my boss. I am reminded of a question I was asked a few years ago, when the Scottish Parliament had just been established. Peter Burt's colleague Gavin Masterton—who subsequently became the boss of the bank—asked me whether he should join a Government task force. I said, "Yes, of course you should, Gavin. To keep an eye on the"—I cannot repeat the word that I used, because the rules of parliamentary language forbid it. However, engagement between business and Government is certainly appropriate.

I love to see Peter Burt's signature—especially on banknotes, rather than reports. Let me warn the minister that Peter Burt is a dangerously innovative man. It will be fascinating for the minister to hear what he says. I have sat and discussed taxation and private finance initiatives with him. PFI projects, in general, lock in a payment stream for 25 or 30 years. However, in this morning's debate and in parliamentary answers that I have received, I have heard from various ministers that the Government does not know what will happen even 10 years from now. Does local government have psychic powers meaning that it can be forced to plan its expenditure 30 years ahead? Is such an approach common?

The SNP would use a different financing model that would raise the money in a different way. When we consider the PFI payments that local government has to pay, should we not align them as far forward as we are able to foresee? In France, for example, la concession—which is the French equivalent—is generally for a period of between seven and nine years, rather than for a period of 30 years.

On 8 December, the minister and I had a little exchange on collection rates in local government. The minister suggested that one thing that local government could do to improve its income would be to step up the collection rate. That was an absolutely fair comment, but, of course, the minister was making no allowance for the fact that some councils are relatively efficient. I am sure that the minister will be glad to be reminded that the Lanarkshire councils are doing pretty well. Some of the McCabes can get some things right some of the time.

However, councils that have been highly efficient have less scope and less headroom to improve their performance. The minister and the Executive are looking for significant efficiency savings from councils, but the playing field out there is not level. We are in danger of penalising the very people who have been successful.

The law of unintended consequences also applies to the subject of roads. I do not necessarily come at this issue from the same position as Tommy Sheridan, although I welcome—as would Tommy—the minister's preparedness to sit down with local government to discuss the way in which distribution of money is worked out.

Aberdeenshire has a rather high proportion of roads that are unadopted and therefore not the responsibility of the council. Quite properly, those roads are not taken into account in considerations of the money that the council should receive. However, many of those roads are important roads for public services. For example, several of them are privately owned unadopted roads that are the only access to schools. The paradox is that the council is unable to take into public care roads that are used for public purposes.

I note that we are increasing the hardship fund for white-fish relief by the grand sum of £28,000. The reality is that we are paying out very little.

We have to look into the power ratio between central Government and local government. We passed a very useful act that created the power of well-being. However, I say to the minister that that phrase has a very hollow ring as long as we control the purse strings as we do. We should give councils limited financial independence. It is time to look at the system again.


Stewart Stevenson
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