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Proposal to return Non Domestic Rate setting to Local Authority control

The UNISON Scotland Response to the consultation on the SSP proposal to return Non Domestic Rate setting to Local Authority control

The UNISON Scotland Response February 2006


UNISON Scotland welcomes the opportunity to respond this consultation. We are Scotland's largest public sector trade union representing over 150,000 members over 90,000 of whom work in local government or related services.

UNISON Scotland fully supports the return of non-domestic rates to local authority control. The return of non-domestic rate setting would increase local democracy and the accountability of councils.

The following represents UNISON Scotland's Response to the proposal to return non-domestic rates setting to local authority control.

What would the democratic benefits of this proposal be?

Allowing councils to raise a greater proportion of funding themselves would give local authorities the opportunity to engage more with local people. It would boost local democracy by making councils accountable to all local tax payers for the decisions they make about funding for services. Currently the central:local split for funding is 80:20 this change would make the balance closer to 50:50. This would limit the blame game of local versus central when council tax/funding reviews take place.

This proposal would also enhance general understanding of the role of local government and so enhance participation in local democracy and strengthen citizenship generally.

In what way would local authorities benefit from this proposal?

Local authorities would benefit from the ability to raise and control revenue maximising their autonomy and freedom from central control. Currently councils are accountable for most spending (not ring-fenced grants) but have control over only 20% of fundraising.

The current system discriminates against cities, which generate most of the revenue, but do not see an equitable share of resources. The return of the business rate would help city councils pay for the services that not only local residents but those from other areas also use. These include cultural and leisure facilities and economic development which provide jobs for many who live out-with the cities in which they work. There would be a need for some adjustment in grant aid expenditure following the end of the current pooled system but this should not mean a straight claw-back from the finance settlement for areas who gain.

Councils could also use the business rate as a tool for economic development i.e. lower business rates for certain areas or for employing certain groups of people, for example, people with disabilities.

What would the effect be on businesses from this proposal?

Local businesses would be brought closer to the discussions on and resourcing of local services. Business people, who work in the communities in which they live, would be able to vote and campaign in their local elections and influence their local councillor on issues which concerned them. This would increase their stake in local services many of which they rely on for success.

Local authorities could use control of the business rate to support local businesses. Nothing in the proposals means that business rates would have to rise.

What effect would this proposal have on local authority residents?

This proposal would ease the burden on council tax payers. Council tax is currently the only direct tool councils have to increase their funding. Residents would also be able to hold councils more accountable, for funding decisions, via the ballot box as they would be responsible for more of their own financial decisions.

What would be the financial implications of this proposal?

UNISON does not foresee any rise in local authority costs as they already bear the costs of administering the collection of non-domestic rates. The actual business rate would not be a function of where it is set and would be a political decision for councils.

Are there any equal opportunities implications that you believe arise from this proposal?

UNISON does not foresee any equal opportunities implications from this proposal.


UNISON fully supports the return of non-domestic rate setting and retention to local authority control. Returning non-domestic rates would increase local democracy and the accountability of councils to their residents.


For further information please contact:

Matt Smith, Scottish Secretary
UNISON Scotland
14, West Campbell Street,
Glasgow G2 6RX
Tel 0845 355 0845 Fax 0141 342 2835

E-mail: matt.smith@unison.co.uk


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