You will have read our submission. Our view is that a broader reform of the council tax is needed, which is why we think that the proposed tweaking does not quite do it.
We should remember that the council tax used to form 20 per cent of income; it is now down to 15 per cent because of the council tax freeze. In fairness, charges were not previously as high as they are now. Some of the gap has been plugged by charges, which we argue is a regressive way of raising local government funding.
We favour the return of business rates to local government. We have long argued that that should happen. The words “return of” are important there and, in fairness, that was the approach that the Government took a long time ago.
There is therefore a case for broader reform. We favour the Burt proposals for a property tax. That was a thorough piece of work that has been usefully updated by the recent commission.
We can look at business rates and at having a new property tax that might raise different sums of money, and there will always be an element of charging. We have made the point that it is true that the risk with a lot of these schemes is that rich areas gain more than poor areas. That is where equalisation comes from.
Equalisation schemes have been used in the past. They are not easy because, inevitably, there are winners and losers. One reason for that is that we tend to focus equalisation schemes on whole local authorities, and the problem is that our local authorities are a rather strange mix of big regions and quite small areas.
I would restructure the equalisation arrangements by going down almost to postcode areas and building them up. That might not result in massively different changes, but it would be more realistic because, even in council areas that generally have a high proportion of low-income households, that is not true for the whole council area. Glasgow has wealthy parts and lots that are not. The same is true in Kenneth Gibson’s area—there are big differences between the three towns and Largs. Building up a formula that was based on local postcode areas would provide a more realistic formula that targeted resources where they are most needed.
If you gave me a blank cheque and we rewrote the whole local taxation system overnight, we would give councils the power to raise additional local taxes—the bed tax is a well-known version of that. There is merit in looking at things such as the land value tax, but not as a replacement for the council tax, because that would be difficult for a lot of the practical reasons that our members who work in valuation have pointed out.
If we pulled all those elements together, we could get somewhere fairly close to 50 per cent. That is an arbitrary figure, but all that we are saying is that more money should be raised locally and that we need a broader reform on—I hope—a cross-party basis, although that might be my wishful thinking. That is what needs to happen for us to get closer to that local government ideal.