Chamber and committees

It is the highest except for last year.

For the past two years, we have given local government a pretty significant increase in the general revenue grant. That is where local government says that it wants the money, because it is flexible. I would hope that, given that funding, local authorities would make responsible decisions and minimise any proposed increases in council tax.

I know that local authorities will be in differing positions. We have been giving particular support to some of the smaller local authorities, which we think need to get very much into the shared services space, as they are trying to support services with a very small council tax base. There are particular challenges for the smaller authorities, and we are engaging with them directly. I would hope that we see reasonable positions on council tax, given the funding that is being made available.

I can bring in Ellen Leaver. It might be helpful if she gives a little bit more detail.

I understand that point. A consultation is on-going, which is important in relation to that wider point. It is important to reassure people on that; a lot of joint work has been done with COSLA.

The fundamental point is that we would want to link any future wider revaluation to wider reform of the council tax and the consultation on that closes at the end of this month, that is, at the end of this week. It is aimed at building political consensus around what local taxation should look like, not just among politicians—we are trying to take the public with us, too. Council tax can be pretty contentious—it has a contentious history—and we want to build consensus around what the future looks like for local taxation.

That will clearly be an issue for the next parliamentary session rather than this one, given the timeframes. However, I hope that the consultation’s findings can be provided to the next Parliament as a starting point for fresh discussions—which I hope will be on a cross-party basis—about what the art of the possible is. There have been incremental reforms in relation to second homes and empty homes, the mansion tax and so on. However, there is a more fundamental question that can be addressed only by building enough consensus. That will be for the next Parliament to do.

I have had a lot of engagement directly with hospitality, as have ministerial colleagues. We absolutely want to hear what they have got to say. I also remind folk that this is an independent process. The Parliament agreed to and welcomed the move to three-yearly revaluations that would be independent of the Scottish Government and local government. It is also important to remember that the average increase is 12.23 per cent.

There is an issue about the methodology, which is why the review of hospitality methodology—I am not sure that that is its correct title—is under way, chaired by Brian Gill KC. That work will get to the heart of a reasonable concern that hospitality businesses have in relation to what is and is not fair, particularly in comparison to other sectors. We have listened to that concern and accepted it; the review is an attempt to make a more fundamental change.

The transitional relief of £184 million is a big investment in supporting hospitality businesses and others to not have those big costs up front. Around 89,000 properties—which is 96 per cent of all retail, hospitality and leisure properties—could benefit from having zero or reduced rates. The budget guarantees that support for three years of the revaluation. It is not a one off—it is for three years.

We will continue to discuss the issue with the hospitality sector. If any further funding comes from the UK Government in recognition of the issues with its revaluation, I will commit to further supporting hospitality with that funding. I am pushing the Treasury for an answer. Clearly, something is being discussed and it is not being forthcoming with the detail of what it is, but we will pursue the matter to find out whether it will result in further funding that can help the hospitality sector.

I know that I will get the name of it wrong, but we have a regular round-table meeting with the hospitality sector that Ivan McKee, Richard Lochhead and I regularly engage with. Quite often, material from the sector is highlighted, which we then analyse. We welcome the flow of information. I give the assurance that we will continue to carefully look at and reflect on any information.

I will bring in Ian Storrie again. The figure that I have for average growth in rateable value is 12.23 per cent, but that is across the board rather than differentiated. I will see whether there is a figure for differentiation in a second. As I said, we have lowered the basic, intermediate and higher property rates in addition.

Do we have a differentiation? Could we write to the committee about that?

I suggest that we write to you with the report, and perhaps pull out some of that detail and draw attention to the key points in a covering letter, if that would be helpful. It would mean that folk would not necessarily have to wade through the report itself.

I do not know that I would be that optimistic. The figures on baselining speak for themselves. Over the past three budgets, about £2.2 billion has been baselined. That is a lot of money that used to be ring fenced and is now baselined.

There is a direction of travel, for sure, but sometimes there are good reasons for money sitting within a portfolio before allocation, because policy might change. For example, in the active travel space, the Cabinet Secretary for Transport wanted to change the way that funding was delivered. If that money had been baselined, she would not have been able to do that. There are checks and balances, and ultimately it is about finding a balance.

One of the principles on the budget in the Verity house agreement was about having an open book and being open about the challenge. I have had numerous discussions with COSLA in the run-up to the budget. I hope that one thing that it could not criticise is the process or the openness in discussions. On the £750 million ask for social care, I was clear that that quantum just did not exist—it was more than the entire resource consequentials for the whole spending review. I cannot produce something that is of a quantum that is out of the park. I had to be frank about that.

Then we went into the territory of the key asks. One key ask was for further removal of ring fencing and increased baselining, and we have done more of that. Another was for freedom over council tax, and we have done that. Another was for additional funding, which we have done through the £253 million in the general revenue grant.

Those were the key asks, and I feel that we have met them and that it has been a very open conversation. Ultimately, the response from COSLA is the response from COSLA. I think that we have provided a fair settlement in the context of the finances that are available to us.

I agree with that. We have taken a lot on board around the need for trade-offs between quantum and flexibility.

I am very much in favour of giving local government maximum flexibility. However, if I had my colleagues around the table, they would say, for example, that we have to make sure that social care is delivering so that delayed discharges can come down. I would also have education colleagues saying that we need to make sure that teacher numbers are maintained.

There are checks and balances, but we are in a better place. I do not know whether it will ever be perfect, but we have made significant progress. I did not hear the session before, so I am pleased to hear that there was some recognition of that.

Lots of other things are going on, which is perhaps not the headline-grabbing stuff, such as the work with the single island authorities, the accelerator deals with the islands, or the work—again, in relation to the islands—that is going on with the ferries task force.

Lots of innovation is happening that is a joint endeavour between local government and the Scottish Government. There is an awful lot going on that does not make the headlines, but that is really important.