Decentralisation of power could solve the Council Tax problem

It’s because there is low trust in councils to spend money well. And the reason for that is also quite simple and it’s not about willingness or competence either.

It is that what we call “local government” is not really local. And, increasingly, nor is it government.

The average population of a Scottish council is 170,000. In equivalent countries, it is 10,000. Highland Council is 20% larger than Wales, which has 26 local councils. And central government schemes like ring-fencing, the Council Tax freeze and 14 years of austerity have critically diminished the ability of councils to be a tier of government. We are left with administrative bodies that are not even particularly local.

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There is an answer to this, which Scotland has been dancing around since 1999. And that answer is to bring back genuinely local government. The evidence from other countries is that the more local the government, the more trust there is in the decisions. And the more tax is raised at local level, the higher the turnout in local elections is. In Sweden, local government is funded by the basic rate of income tax. Turnout at local elections is more than 90%. That is twice what it was in the 2022 Scottish local elections. Where government is making real decisions, people pay real attention.

We need local government because we need to provide common goods. Local government as we know it was set up to do the things that have to be done in common.

It’s the 200th anniversary of the world’s first fire brigade. Edinburgh’s tightly packed streets meant that a fire could spread quickly and do a lot of damage. The best way to avoid this was for everyone to come together and support a collective service. So Edinburgh set up the world’s first universal fire brigade.

Yet Edinburgh no longer controls its fire service – it has been centralised. And the energy that gave us the great municipal government of the late 19th century has almost all gone. But just as we have bet the house on centralisation, so do the problems we face turn out to have local, collective community solutions. These are the real answers to crises from the ageing population to climate breakdown.

So what of the Council Tax? It is set up so that most of the tax collected comes from a large number of smaller properties. To change it, any government would have to increase the small amount collected from a small number of large properties.

A 2007 review into local taxation proposed to replace the Council Tax with a levy on property value of 6.7%. At the time, the highest rate of Council Tax was around £4000. First minister at the time Jack McConnell, right, was asked at a press conference if he agreed that a family home in Edinburgh should see its local tax rise to as much as £7000.

Without having read the report, he replied that no, he disagreed, and that he “wouldn’t give [it] the time of day”. Of course, the family home in question was valued at over £1 million. It was a trap and McConnell blundered straight into it.

In a single moment, it became clear to me why the council would not be reformed. It should never be in the gift of one man to veto reform without even having read the major report proposing the change. By citing a one-off example, a hostile journalist was able to torpedo reform using this hyper-centralised system.

Only by returning to a sense that local tax is used to address local problems can we get away from the tired debate on Council Tax and get something fairer in its place.

Of course, it’s not just tax reform that will benefit. There are community groups, development trusts and other voluntary groups up and down Scotland taking on the halls, churches and leisure facilities that are so vital to the quality of our lives. But they are strapped for cash and exposed to all sorts of risks – not least of which is the financial risk of being liable for anything that goes wrong.

Their work is great. It has rescued many places that communities rely on and, in many cases, it has revitalised them. But how much more effective would this spirit be if we gave it official status? If we allowed those groups to do what they do with the ability to raise taxes to pay for the much-needed facilities? I think that would enjoy much more support than the abstract analysis of the 2007 local tax review. The evidence from other similar countries is that they do enjoy that support.

We have a national pessimism about the power of government to improve our lives. The more we indulge this pessimism by centralising power, the worse the situation becomes. The answer is then another round of centralisation. It is like a medieval doctor bleeding a patient with leeches. With every round of treatment, the patient becomes weaker and requires more bleeding. So the answer to every failure of centralisation is yet more centralisation.

The countries with the highest levels of happiness have the highest levels of decentralisation. We think that having more power over your life, over your community and over the things that matter to you will make you happier.

Yet we have fewer local councils than almost anywhere else in the world. And those councils have lost control of a wide range of responsibilities over the decades. Water, fire and rescue, public health, police, community justice, further education, even energy were delivered by local government at one time.

That’s why I’m part of a group campaigning for the return of truly local government to Scotland. Building a Local Scotland wants to give communities back their autonomy, to give local government back the power to make real decisions and to bring together all the thinking about how we could do local government better through a Citizens Assembly. Then we can get on with actually fixing the problem.

We want to build a moment for real local government. To join us, you can sign our pledge at www.buildlocal.scot, as we will be running meetings and conferences to make the case for a decentralised Scotland.