Cruise ship levy: consultation

9. How Revenues from a cruise ship levy should be used

This consultation seeks views on giving local authorities the power to introduce a cruise ship levy in all, or part, of their area. Under the current devolution settlement receipts raised by a cruise ship levy must be used to fund local authority expenditure. We anticipate that any cruise ship levy would follow the approach of the visitor levy on overnight accommodation, in that revenues raised by a local authority choosing to apply a cruise ship levy would be retained by that local authority and not be subject to any pooling or redistribution.

However, there is merit in this issue being subject to consideration by the joint COSLA/Scottish Government Settlement and Distribution Group. This is because this would (like the visitor levy) be a further departure from the established financing mechanisms for local government in Scotland. These mechanisms have a system of equalisation at their heart, intended to ensure that all local authorities have the capacity to deliver equivalent levels of service. It is also worth noting that without any pooling or redistribution the revenue raised by a local authority would, we expect, be used in that local authority’s area. This may or may not coincide with the areas affected by cruise ship passengers - for example, that would be very likely to be the case for ports on islands, but may not be the case for mainland ports where passengers leave the local authority area on shore excursions based in other local authority areas.

Given that receipts from a cruise ship levy will be raised from cruise ship operators and/or cruise ship passengers there is an argument that any revenue raised should be used to support facilities and services that are used by such passengers or the cruise ship industry. This could be linked to a requirement that a local authority set objectives (potentially connected to any relevant tourism strategy) for any cruise ship levy it puts in place. However, there is also a view that there should be no restrictions on how such funding is used, to give local authorities maximum flexibility in how the revenue raised by a cruise ship levy is spent.

Lastly we are aware of the provisions in the Harbours Act 1964 (as amended), and the need that any requirements around the use of funding do not conflict with the provisions in that Act.

Question 10: How should revenue raised by a cruise ship levy be used? Select one.

• Revenue raised by a cruise ship levy should be required to be spent on facilities and services used by cruise ship passengers and/or the cruise ship industry.
• A local authority should be able to use revenue raised by a cruise ship levy in any way it wishes.
• Don’t know.

Please provide the reasons for your answer.