Visitor Levy (Scotland) Bill: island communities impact assessment

An island communities impact assessment (ICIA) considering the potential impact of the introduction of the Visitor Levy (Scotland) Bill on island communities.

Step Four – Assessment

Does your assessment identify any unique impacts on island communities?

The consultation and engagement described above raised a range of matters in respect of islands locations, and highlighted the views of residents or accommodation providers about the proposals to enable local authorities to apply a VL if they consider it appropriate to local circumstance. This section sets out those challenges and opportunities identified and concerns raised.

Island Circumstance

The power to introduce a VL and the potential for the levy to generate a new income stream to support islands communities were welcomed by many. However, recognising that a VL should reflect local circumstance there was a common view that it was important that any proposals are ‘island proofed’ and the impact on islands assessed.

The geographical remoteness of islands can generate a number of particular challenges:

  • island residents may need to travel to the mainland to access services, for example to attend medical appointments, and this may necessitate overnight stays on the mainland.
  • medical or other professionals travel to islands to provide essential services which may not otherwise be available, and may have to stay overnight to deliver those services.
  • transport disruption or timetables can further compel overnight stays outwith the control of the individual.
  • the cost of visiting some islands is different from the costs if tourists stay only on the mainland, for example higher transport costs to reach an island, and the higher cost of operating a business may impact on visitor spend or be passed on to visitors.

Visitor Economy

Some islands in particular, for example Iona or Cumbrae, experience a higher level of day visitors. A high number of day visitors impacts on infrastructure in the islands, and it was suggested that the proposals to apply a VL to overnight stays does not help manage or alleviate the issues arising from this.

There was recognition that a levy on day visitors could be difficult to administer. Some respondents thought there was a risk of discouraging day trips and of penalising local businesses. However, islands have limited points of entry, and it was suggested that it is therefore more possible to identify and charge day visitors arriving on an island (e.g. by ferry). Difficulties in defining a day visit were also raised in the consultation responses and the lack of a way to monitor day visitors, alongside any potential impact on local residents.

Accommodation providers on islands were observed to be mainly small and micro business, and collecting a VL could place a particular compliance burden on them.

Use of Revenues from Visitor Levy

Where an island is part of a larger local authority area, it was highlighted that the circumstance and need of the island might be different compared to other parts of the local authority on the mainland.

It was suggested that revenues raised from a VL should be spent in the area in which they are raised and reflect local circumstance and need. Furthermore, island communities should be involved in strategic decisions around spend, with decisions about the use of revenue devolved to the lowest level possible.

Views were also expressed that a smaller scale of visitor economy may mean the level of revenue generated may not justify the costs of introducing and administering a VL.

Does your assessment identify any potential barriers or wider impacts?

In choosing to implement a VL scheme, a local authority may create potential barriers for persons on island communities who require overnight accommodation in another area for the purposes of accessing public services.

How will you address these?

Informed by the comments received, the Bill requires that a local authority considering a VL should assess the impact of its proposals and engage with communities, relevant business and tourist organisations on the proposals and use of revenue. Island communities would be a relevant and necessary consideration within this process for some local authorities. This would be in addition to any existing statutory duties on a local authority to have regard to communities and groups when developing or delivering a policy.

The Bill also provides flexibility to reflect different circumstances, for example, to apply the levy in all or part of an area or not at all, or to provide local exemptions to paying a VL. It also ensures a local authority is accountable to local communities for the decision it takes about a VL, for example by way of annual reports and regular review.

Consideration has also been given on whether to create national exemptions to a VL scheme, on the issues raised by island communities. In particular, a national exemption for persons using overnight accommodation for the purposes of accessing medical treatment has been considered. Given the discretionary nature of the power and our commitment to local flexibility and accountability, the Bill will not include national exemptions. Rather, local authorities will be able to set exemptions to the levy, following consultation with local communities and businesses, giving councils the ability to tailor a VL to the specific needs of the local area.

We are committed to develop implementation guidance on the VL with local government and industry stakeholders, which will aim to provide a non-statutory framework on aspects of a VL scheme, including the designation of and best practice on local exemptions. The Bill will also provide Scottish Ministers with a power to designate national exemptions though subordinate legislation, should they wish to do so.



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