Seòmar agus comataidhean

Good morning, panel. Councillor Macgregor, you have just spoken about how the funding might assist certain infrastructure, cleaning services, bin services and so on. I asked questions last week and the week before about the revenue, which could end up being used to plug a hole in council budgets. That is a very grey area. Do you think that the revenue should be ring fenced for tourism-related spending only? How do you see that working?

Thank you. Do you think that some local authorities, especially if there are questions regarding a flat rate or a percentage rate, may charge businesses using different mechanisms? If there are microbusinesses that have one or two locations—somewhere in the Highlands and somewhere else in Edinburgh, for example—they would need help with their administration and accountancy, and even with their website. We have heard from witnesses that they would need to ask for some help.

In your opening statement, minister, you spoke about how it is important to strike the balance between having national consistency and local authority flexibility. In evidence to the committee, some witnesses said that they would prefer a percentage rate and some said that they would prefer a flat rate. However, the industry appears to be of the view that it would like to adopt a flat rate to make it simpler to collect the levy. Do you think that the bill should be amended to allow local authorities to introduce a flat rate if they decided that that was the most appropriate route?

You mentioned consistency. We heard from witnesses who have looked at international models where both flat rates and percentage rates are applied. Irrespective of the type of rate, would it be Government or local authorities that would set it?

How do you see that approach working in grey areas? In the past couple of weeks, we have spoken about bins, roads and potholes. One assumes that they are the day-to-day responsibility of councils, which are experiencing cuts. Tourism and the visitor economy use such facilities, too. How will the balance be struck to ensure that day-to-day work is funded not from the levy but from the budget, as it should be?

My next question is about having a national cap. Although local authorities are not generally keen on having a national cap, the tourism sector has called for a cap to be set nationally if the percentage rate remains the only option for local authorities. What is the Government’s response to those views?

Minister, you said in your opening statement that it is important that the levy is spent in the local authority areas where it is collected. I raised concerns, last week and with the witnesses in today’s earlier evidence session, about whether the revenue from the visitor levy would be used to plug holes in council budgets. That is a grey area. How do you respond to concerns that, in essence, tourists and businesses are paying the price for the Scottish Government’s inability to give our councils a fair funding deal for years? Do you agree that the revenue should be ring fenced for tourism-related spending? How do you foresee that working in practice? In particular, how does it fit with the spirit of the Verity house agreement?

Minister, you have explained the fact that this has happened, but how do we ensure that it never happens again? Are you or the First Minister or the Scottish Government giving an assurance in that respect? The council tax freeze went ahead without any consultation with any local authorities; we have heard their views on that in committee, and I have heard their views on it outside, too. Local authority leaders and chief executives are not happy that the freeze went ahead without their decision.

I understand the thinking behind the freezing of council tax, but that relationship is what is important here. Are you saying that what happened is a one-off that will never happen again, and that the Government is looking to ensure that such a thing never happens again?

According to the Fraser of Allander Institute’s calculations, the freeze would collectively cost councils around £148 million next year, assuming an increase of 5 per cent as there was last year, and they would receive around £417 million if they struck a deal that gave them a rise of around 8 per cent. Surely the Scottish Government carried out some kind of analysis before making a commitment to fully fund the freeze. How much does it expect the freeze to cost? More crucially, where will the money come from?

Have you started talks with local authorities on what that quantum will be, or are you going to start those talks?