Local Government Finance

Part of the debate – in the Scottish Parliament at 4:51 pm on 22 November 2000.

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Photo of Peter Peacock Peter Peacock Labour 4:51, 22 November 2000

I recognise that point. In past years, I made calls for such matters to be considered. That is why I welcome the fact that the Local Government Committee will undertake a review. We must enter such debates with our eyes open to the possibilities. The committee may conclude that the present system is best; it may come to a different conclusion. We will consider that in light of evidence that the committee takes. I hope that the committee's inquiry will be full and thorough.

I will pick up a number of other points that were made on the specifics of our announcement. A number of members—Keith Harding, Linda Fabiani, Bill Aitken, Andrew Wilson and Kenny Gibson—asked about contingency planning and the flexibilities that would exist in a three-year council tax setting regime and a three-year budget. Let us be clear on that. We are trying to give—we will give—a high degree of certainty to local authorities on what represents the vast bulk of their income and the basis on which they spend. Our ability to do that will enable the councils to predict accurately the council tax levels that they can set. We expect the councils to set council tax levels this coming February that will indicate what the levels will be over the three years. That is a firm position.

Having been a council finance chairman—as, indeed, was Angus MacKay—I understand the factors that impact on council expenditure day in day out, week in week out: gales, floods and hurricanes, difficulties with interest rates and inflation, changing pay settlements and so on. We are not blind to such matters and we will take a pragmatic approach to examining them if and when they arise. However, that approach will be taken in the context of being able to justify why we are varying our original plans, not simply of creating a flexible situation in which there is no predictability. We are mindful of all those points.

Questions were also asked about new burdens. Principally, we were asked whether, in imposing new burdens or asking local authorities to deliver new services, the Executive would be able to adjust the financial settlement to reflect those matters. Keith Harding, Adam Ingram and David Davidson asked about that. The answer is yes—the flexibility exists, from the Executive's point of view, to add to the settlement to enable councils to make progress on such issues if we feel that they are a priority. Equally, the flexibility exists for us to discuss with local authorities a reprioritising of our expenditure to accommodate new matters that we reckon have higher priority than existing expenditure.