Fiscal Framework between Scottish Government and Local Government

Local Taxation and Fiscal Flexibilities

17. The Scottish Government and Local Government are committed to enhancing local fiscal levers and flexibilities through the exploration of new opportunities, and to regularly evaluating existing local levers to ensure they are fit for purpose.

18. A structured process of design and evaluation of fiscal levers will allow Scottish and Local Government to work together to deliver future opportunities for fiscal empowerment.

19. Annex C contains a ‘design and consideration’ process for the development, appraisal, and implementation of fiscal levers. The design of any fiscal leavers should reflect the principles of stability, certainty, transparency, affordability and sustainability.

20. All fiscal levers will be developed in accordance with the agreed Fiscal Framework principles, including seeking a balance between local flexibility and economic efficiency.

21. Scottish and Local Government agree that new fiscal levers, which are created to be administered and levied by local authorities should favour local discretion, unless there is a legitimate reason and agreement for the lever to be set or constrained to some extent nationally.

22. The establishment of a Joint Working Group with Local Government to support discussion on sources of Local Government funding, including Council Tax has enabled the exploration of more fundamental changes in Local Government funding, including Council Tax reform.

23. Any future working groups to consider the development, implementation or use of fiscal leavers should abide by the principles set out in this Framework.