Minutes:
The Chair invited Daniel Gardiner, Adviser, to introduce the item.
Daniel stated that the paper updates members on two pieces of research on fiscal devolution that were commissioned by the City Regions Board during the 2017-18 political cycle.
The two pieces of research focus on detailed econometric modelling of specific instances of fiscal devolution and public perceptions of devolution and fiscal devolution specifically. The two research reports were appended to the paper and the paper concluded by outlining options for next steps for the LGA’s work in this area.
Daniel invited feedback from the Board on next steps for this work and noted that a meeting would be set up between the Chairs of the City Regions Board, the People and Places Board and the Resources Board to agree on next steps.
The Chair thanked Daniel for his update, and commenced feedback by stating:
· The messaging research presents a challenge for the sector and is important in informing how we most effectively put forward the case forward for the local government sector.
· A tourism tax is of interest and, based on previous experiences, there will be a lot of interest from the tourism industry on what the money would go towards (tied to hypothecation point in the report).
· Interest in considering how tax models for physical and online businesses might be equalised and considering how local government are beneficiaries of this – the Chair noted that this also came up in a recent meeting with Marks and Spencer.
· On the modelling research, Members noted the variable impact of a tourism levy in areas across the country and the importance of assignment of income tax being based on where you live rather than where you work.
· There was broad agreement that further work on a tourism levy was worth pursuing but that this needed to be considered in the context of domestic visitor numbers going up.
· Members noted the need to be mindful of the unintended consequences of variable rates in taxation between areas.
· It was commented that the way we might secure the introduction of local levies is through the use of effective local pilots, e.g. a tourism levy.
· Members agreed that the messaging research was extremely insightful and not necessarily in line with what might have been expected. Members agreed the importance of taking this work forward in order to increase understanding in local government, noting that this would help make the case for more substantive fiscal devolution in future.
· Members commented on the need for greater clarity to be provided to enable the public to better understand who is taxing residents, and what this tax is being spent on.
· Members commented on the need for a robust LGA communications approach in response to the messaging research.
· Members reflected on local experiences of public consultations that demonstrate how vital it is to frame questions correctly.
The Chair concluded this work was vital to further shape public opinion in relation to local government, in order for more residents to become engaged with local politics, and to better understand what local government does, and where its funding comes from. The Chair also noted an emerging consensus of interest in progressing work relating to a tourism levy and work relating to taxation arrangements for online businesses.
Action
Members noted the update.