Chamber and committees

Absolutely; we heard similar views last week.

The Verity house agreement commits to multiyear budget certainty where possible, but the Scottish Government budget includes only one year. Last week, we heard views from finance officers on the issue. Does COSLA believe that the Scottish Government could and should have provided indicative multiyear settlements in its budget this year? What impact does a single-year budget have on local government and third sector partners?

Thank you—I appreciate those comments. Ms Kelly, do you want to expand on that?

Is there no timetable? Will it be finished later in the year? I do not want to press you, and I know that it is it is important that we get it right, but at the same time—

Good morning, minister and officials. One of the aspirations of the Verity house agreement was that the fiscal framework, which you have spoken about, would be concluded by September 2023. That did not happen. How confident are you that the fiscal framework can still be agreed? Do you have any timescale for when it will happen?

Good morning, panel. Before I ask my questions, I declare an interest as a former councillor in West Dunbartonshire until May 2022.

We heard last week from four directors of finance, who described the pressures that their councils are facing. We have also had the report from the Local Government Information Unit on “The state of local government finance in Scotland”, which highlighted real concerns about the future of council finances. That position is backed up by the “Local government in Scotland: Financial bulletin 2022-23” report that the Accounts Commission published this morning.

What would COSLA like to happen between now and March, when the budget is finalised, to help public services and local government finance to become more sustainable? I put that question to Councillor Hagmann and then to Ms Kelly.

Thanks for that information. That gives us a better understanding.

Last week, we heard from the directors of finance about the pressures that councils face. A report by the Local Government Information Unit showed real concern about the future of council finance, which was backed up by the Accounts Commission report that was published today. To what extent will the budget contribute to public services, and to local government finance becoming more sustainable?

I am aware of that, too. Councillor Hagmann, do you want to add anything?

I speak as a member of the Local Government, Housing and Planning Committee and in support of the general principles of the bill to introduce a visitor levy.

Having a visitor levy is not a new idea; levies are widely used across Europe and around the world. As of 2023, 21 of the 27 EU member states charged occupancy taxes. Some cities and regions use the levy as a way to increase their general reserves, while others ring fence all or part of that revenue to fund specific projects. It is quite reasonable, and not uncommon, for local authorities to want a small contribution from tourists to support and sustain their visitor economies.

Scotland has breathtaking landscapes and a rich cultural heritage, so it is not surprising that our country has become a magnet for tourists from around the world. Tourism is an important part of our economy, supporting more than 200,000 jobs and bringing £4.5 billion into the Scottish economy each year.

That is why members of the committee recognise that a visitor levy must be done properly. The committee recognised the concerns that have been expressed by local businesses and other stakeholders, but, overall, the levy has the potential to bring significant benefits to visitors, the tourism sector and local residents alike. It has the potential to create funds that can be reinvested in maintaining tourist attractions, in preserving the environment, in supporting local businesses and in improving public facilities.

The levy could also create a more symbiotic relationship between visitors and local communities. When we visit a new country, we all have the responsibility to respect its landmarks, cultures and environments. The levy would ensure that tourists themselves would become active participants in the preservation of Scotland’s unique spaces and communities.

Although some people are concerned that a levy might have a negative impact on visitor numbers, introducing one at a modest rate in some local authorities would not be likely to have a significantly detrimental effect on visitor numbers, given the unique nature of Scotland as a destination and the experiences of other jurisdictions where a levy has been introduced. In fact, a levy could bolster the tourism industry because funds could be reinvested in local facilities and services, thereby helping to attract more visitors. A levy should be welcomed, because spending would benefit both locals and visitors and it would provide ambitious strategic long-term investment.

Our committee believes that decisions on spend should be taken at the local level. Flexibility to allow local authorities to prioritise their spending is a key aspect of the bill and is in keeping with the principles that are set out in the Verity house agreement. The bill would ensure that local authorities could decide whether to introduce the levy and, if so, to implement it in a way that would work for their local circumstances. The bill, therefore, plays a key part in the Scottish Government’s wider aim of giving councils greater financial flexibility and strengthening local democracy.

The committee understands that some people have concerns about possible complexities that could arise from that approach, but I and most members of the committee feel that local authorities are best placed to design approaches that will best suit the needs of their local communities.

Due to Covid-19 and increased costs, the past couple of years have been a real challenge for the hospitality industry, so I have every sympathy with hospitality and other businesses. A levy would not come into effect until early 2026. The committee is mindful of the concerns about possible administrative burdens, so we welcomed the constructive engagement on the matter. At its core, the committee valued the importance of meaningful consultation with the tourism and accommodation sector to create a genuine sense of partnership working—for example, through the expert group—so we have loads to do for stage 2. That will help to alleviate the concerns of many people in the sector and will demonstrate the potential long-term benefits of a levy.

It is important that we recognise that a visitor levy is not simply a tax, but is an investment in the future of Scotland. It will position Scotland as a sensible forward-thinking destination that values its cultural heritage, environment and local residents. Those values are appealing to tourists as well, as more people become conscious global travellers and take a real interest in the countries that they visit. We should embrace this opportunity as a chance to ensure that our country has a vibrant and sustainable future and to create a Scotland that generations to come will want to visit.

Good morning, panel. Happy new year to you. You suggest that the cost of living crisis might be causing a short-term increase in applications for disability benefits across the UK. Will you explain further how that impact occurs and why you would consider it to be short term?

Are you aware of any reasons why that is the case? Is it to do with promotion?