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LOCAL GOVERNMENT FINANCE REVIEW COMMITTEE (LGFRC)

MINUTES OF FIRST MEETING: 24 AUGUST 2004, ROOM 4E01, ST ANDREWS HOUSE

Present:

Committee
Sir Peter Burt, Chair
Peter Daniels OBE, Member
Janet Lowe CBE, Member
Professor John Baillie, Member

In Attendance:
Andrew Rushworth, Scottish Executive
Ann Thomson, Scottish Executive
Billy McKenzie, Scottish Executive

1. Introduction
1.1 Andrew Rushworth welcomed the group on behalf of Scottish Ministers and noted that Ministers were very grateful to them for agreeing to undertake the Review.
1.2 Sir Peter Burt proposed that the name of the group should be the Local Government Finance Review Committee. This was agreed.

2. Remuneration (Paper 1/2)
2.1 The Committee noted paper 1/2. Ann Thomson tabled a further paper which set out the standard Scottish Executive travel and subsistence rates. This paper was to be used as a guide only. It was agreed that members would submit details of expenses, including receipts, on a monthly basis and the Secretariat would arrange for payments to be processed.

3. Background to Review (Papers 1/3 to 1/5)
3.1 Sir Peter noted that the Review had been set up to explore thoroughly the merits of the present council tax system and the alternatives. He reiterated the independence of the Committee: the recommendations produced at the end of the Review would reflect the Committeeês own views without reference to the interests of the different positions of the Scottish political parties. It would then be for Ministers to take decisions in the light of the recommendations. Andrew Rushworth confirmed that Ministers were keen that the Committee work independently and produce objective and well-argued recommendations. They had an open mind as to the Review and any recommendations coming from it.
3.2 The Committee found the papers on the background to the Review helpful. It was agreed that the final report of the Committee would include a section on why the Review was set up.
3.3 There was some discussion of the various background papers listed in Papers 1/4 and 1/5. It was agreed that members would inform the Department which of the papers listed they would like in hard copy. The Department would then prepare hard copies of these.
3.4 Ann Thomson gave a short presentation on local government finance. The Committee found this very helpful and concluded that any initial consultation paper issued by them should contain a section on local government finance to set the context.

4. Remit of the Review (Paper 1/6)
4.1 There was a general discussion regarding the remit of the review. It was agreed that any local taxation system devised must take account of the effect it would have on the rest of the economy, for example employment issues. It was also noted that although it would be important to consider the work of the separate review being conducted by Sir Michael Lyons in England, the Committee would not feel restricted by any proposals emerging from it. If the Committee concluded that the best approach for Scotland was different to that proposed for England this should not be a constraint as long as the cross-Border implications were considered.
4.2 It was agreed that the Balance of Funding would be an important issue the Committee should address in its deliberations. This would include considering whether local accountability would be improved by changing the present arrangements, where central government supplies 80% of local authority funding.
4.3 A discussion took place regarding the issues which lie behind the points set out in the remit. It was agreed that, for the next meeting, the Department would produce a paper which would expand on these issues.

5. Timetable for Review (Paper 1/7)
5.1 It was agreed that the draft timetable was an appropriate guide to the work of the Committee, and the timescales it will adhere to. In particular the six-stage process proposed was acceptable, though some of the stages (such as research) might overlap with others. However the Committee could not tie itself too much to this timetable at this early stage in the process as it will not become clear until a later date how much time the Committee will need to complete its deliberations.

6. Ways of Working
6.1 The Committee agreed that, in addition to familiarising itself with the background papers already discussed, further papers might be commissioned on different aspects of the local government finance system, and the options for local taxation, as the Committeeês work progressed. Further briefings with Department staff were available if requested.
6.2 The Committee then considered how it would seek external contributions. After a general discussion it was agreed that an initial consultation document would be drafted which would ask a specific set of questions focussed on the issues the Committee intends to address in its investigations. The questions would at this stage be fairly general and open, and the consultation process would be a wide one. In order to ensure that the public have an opportunity to contribute towards the debate the consultation would be publicised. It was agreed that the Department would prepare an initial draft consultation paper for the Committee to consider at its next meeting. The draft paper would include a basic introduction to the local government finance system so that consultees who were not experts in this area would have context provided.
6.3 The Committee discussed oral contributions and it was agreed that following on from the written responses to the consultation some organisations or individuals might be asked to attend a future meeting of the Committee in order to discuss their response further.
6.4 A point was raised regarding meeting requests to individual members. It was agreed that one-on-one meetings should be avoided and that if members did receive requests for meetings from individuals they would instead request that they write to the Committee setting out their point of view, before the Committee decided from whom to take oral evidence.
6.5 It was agreed that the Committee would have a website and that, in addition to the Committeeês consultation papers, any papers submitted to the Committee would also be placed on the website unless those submitting had expressly requested confidentiality. In addition hard copies of all such papers, except those marked confidential, would be available from the Secretariat on request.
6.6 It was agreed that in the interim the Scottish Executive would act as the part-time Secretariat to the Committee. However by January 2005 onwards the Committee would require full-time support and the Scottish Executive would seek a suitably experienced individual, perhaps on secondment, to provide this. The Committee might also seek the services of an expert external adviser, and in due course would expect to commission some research and analysis.
6.7 The question was asked whether the Committee required a Secretariat that was entirely separate from the Scottish Executive and whether it should meet at another location. The Committee were firmly of the view that this was not necessary. Indeed they felt that close access to the services of the Executive would be most helpful to them, but were clear they would not let this compromise their independence.
6.8 A discussion then followed on how the Committee would handle its relations with the Media. It was agreed that the Scottish Executive press team would assist with this and would be invited to attend the next meeting for a discussion.
6.9 Finally the Committee noted the rest of paper 1/8 including the model Code of Conduct for members of advisory public bodies such as this.

7. Date of Next Meetings
7.1 The date of the next meeting was set at 1 October 2004, in Edinburgh. A provisional date was also set for 25 October 2004, also in Edinburgh. Department will take forward arrangements for these meetings.

Summary of action points:

• Members to submit details of expenses, including receipts, on a monthly basis to Department
• Members to inform Department which of the papers listed in Paper 1/5 they would like in hard copy
• Department to produce a paper for the next meeting which would expand on the issues behind the remit
• Department to prepare an initial draft consultation paper for the Committee to consider at its next meeting

Local Government Finance Review Committee
Secretariat
September 2004