Chamber and committees

Good morning and welcome to the fourth meeting in 2021 of the Finance and Public Administration Committee.

Agenda item 1 is to invite Ross Greer to declare any relevant interests.

I thought that you wanted Alan Russell to respond, too.

There is another way to look at that. To encourage innovation, we could say that, if local authorities have introduced such innovations, that should be looked at specifically in their settlement. We all know that there is a funding formula, but should there be some recognition of innovation? We would not want a situation in which a council that has decided to spend something on a project will necessarily get that fully funded by the national Government, or councils could just spend money on whatever they wanted and the national Government would be left with the bill. However, is there a mechanism by which innovation could perhaps be more recognised? Should councils that are being more innovative and bringing in new ideas perhaps be rewarded for that in some way?

My final question is on an issue that arose after you had made your submissions, although Ray Perman touched on it earlier. How will the new national insurance increases impact on the Scottish budget and the economy?

We have touched on demography. Last night, I was reading this week’s edition of The Economist. In the Caucasian state of Georgia, there was a particular concern about the fertility rate, which had fallen to 1.6 per woman. The Orthodox patriarch said that he would personally come round and baptise anyone who had a third child and, within a year, the fertility rate had gone up to 2.1. Perhaps someone should give Jim Wallace, the Moderator of the General Assembly of the Church of Scotland, a call—that might help.

Next week, we will take evidence from the Deputy First Minister on the national performance framework. Scotland was one of the first places to introduce such a framework and we all accept that it is a good tool, but is it doing what it says on the tin? I put the question to Susan Murray first, because the issue was included in her paper. Is the NPF influencing Government policy in the way that it should by focusing on outcomes?

I have a couple of issues to wind up on. First, referring to paragraph 13 of the COSLA-CIPFA submission, which is headed “Place-based inclusive approaches are needed”, you say:

“Councils will look to use well established place-based approaches ... bringing buildings back into use in town centres and improving the wider public realm, to supporting and working with communities to make places more liveable.”

Does COSLA believe that the Scottish Government should introduce compulsory sales orders in this parliamentary session?

Yes, indeed. I asked whether CIPFA believes that the Scottish Government should introduce compulsory sales orders in this parliamentary session to improve your ability to deliver place-based approaches.

Yes. However, you said in your submission:

“The devolution of tax powers to the Scottish Parliament has introduced a higher level of risk and uncertainty around the assumptions required to deliver a Budget.”

Surely the same would apply if there was greater devolution of powers to fundraise to local authorities. Surely increasing planning and building control fees, which could act as a deterrent to lodging planning applications and submitting plans to building control, would not bring in significant sums of money for local government.

Linda Somerville, the STUC has said that it believes in progressively increasing the overall tax take of Government and local government. How far do you wish to advance that? Have you looked at what the behavioural impact would be? For example, about 30 per cent of income tax is paid by about 1 per cent of taxpayers, so what would be the behavioural impact if our higher tax levels were significantly higher than those south of the border or elsewhere, given that capital is often mobile?

On the 100-day commitments, you said in your submission that, in its manifesto, the SNP has “tended to favour universalism”. You went on to criticise that and to talk about the need for more specific targeting. However, there has always been an argument about whether to use targeting or universalism. The UK Government brought in universal credit and the NHS is a universal service, as are pensions and concessionary fares. The argument against having a national care service is to do with bureaucracy, but having a more targeted approach can also increase bureaucracy, because people have to administer that. I remember that, when I was a councillor, a huge resource was spent on administering grants.

There is bureaucracy and stigma, but there is also buy-in. With universal services, there is an opportunity for people who pay taxes to gain from the contribution that they make to those services. Where should the balance be between targeting and universalism? It is a difficult balance to strike, but where does COSLA believe that it should lie?