Okay, good morning and welcome everyone to the fifth meeting of the local government communities committee. I can remind everyone present to turn off mobile phones and as meeting papers are provided in digital format, tablets may be used by members during the meeting, so that's what we're doing if you see us use those. We've got a full attendancy here today and no apologies have been received from members and we move to agenda item 1, which is evidence and subordinate legislation. The committee will take evidence in the council tax substitution of proportion in Scotland order 2016 from two panels and I now welcome our first panel, so can I welcome Professor Kenneth Gibb, director policy Scotland University of Glasgow, good morning Professor Gibb, Professor David Bell, Professor of Economics University of Stirling, good morning Professor Bell and Professor Richard Kerli, Professor of Management Queen Margaret University and good morning to you as well Professor Kerli. As indicated before the meeting, there's an opportunity for all three of you if you wish to make opening statements, given we're a bit truncated for time of an hour and 15 minutes or so, we could have those were relatively brief and then we'll move to questions, so would anyone like to make an opening statement? Professor Gibb. Thank you very much. I just want to reiterate some of the points I made in my written evidence. First of all, while we're here to talk about the statutory instrument, I think we would probably all three of us want to look at this in the broader picture and some of the other things that are happening, actually or potentially, with local taxation in Scotland. Plus some reflections, I think it's clear that the proposed reweightings of the higher bands will make the council tax less aggressive, but it's still far from a proportionate or neutral system. Perhaps one of the most important things is that there is no proposal for a general revaluation, and I'm sure that we'll talk about that quite a lot. One of my concerns is that we may find ourselves or some of us back here in four or five years discussing this again because we haven't grasped that issue of how to set the tax base. I also thought that the proposal to compensate lower income households who are going to pay more to council tax as a result of the reweighting, that we should take account of the fact that this is a means-tested system, that there are questions about the take-up of that, particularly for the group of people who will be directly affected by it. I think that we should bear that in mind. I think that most of my other points, I'm sure, will come up in discussion. I just wanted to make those points to start with. Professor Gibb, Professor Bell. I'll be brief. I agree with Professor Gibb that we probably want to look at the broader implications of this statutory instrument. I think that it's, for example, a limited reform given the aspirations of the local tax committee last year. The way that the new ratios will work will inevitably mean some redistribution across local authorities, and I think that it's important to take a broader understanding of what those means. I agree with Professor Gibb about the potential implications of the new addition to the council tax reduction scheme, in that it is quite complex. I worry a bit about the correct population of potential recipients of the additional reduction being properly identified. I'm a little concerned about where we are in terms of redirecting the monies raised from this increase in the ratios solely to schools, as if it's a hypothecated tax. I also think that, again, picking up on Professor Gibb's point that we probably want to understand, I think, a bit more clearly the distinction between taxing wealth and taxing income and how those two might be considered together when we're thinking about the progressivity or regressivity of a tax. I'll try and be equally colleagues. There are two or three issues that I think the committee should turn its attention to the first, and this does bear on fairness because it relates to the value on which, or the described value on which a tax level will be struck, which is the evasion of revaluation. I think it's just simply quite negligent to assume that we should stick with 1991 valuations. The fairness or unfairness that arises from that is quite simple, that if you paid tax, i.e. income tax in this year on your current income and I were allowed to pay income tax on my 1991 income, you would think that was a fairly rough deal for you. I, of course, would be delighted, but in terms of the principle of fairness, we should be considering the overall valuation level and the fairness that rises from that. I favour a form of taxation of property that is mediated in some way by elements of income, and I think the committee on local taxation reform was signalling that working towards it, but then it becomes a matter for how government introduces. I also share the view that the council tax reduction scheme seems to me quite problematic. We extend the level of income at which that reduction will operate some way beyond many other means-tested schemes, and we know that when we have means-tested schemes, they are often poor in take-up. The variation in take-up across different benefits is not still fully established, but I suspect that the confident projection of, I think, £7 million, as being the cost of that, may be impacted by the proportion of households that take that up. That again turns upon fairness. I remain in favour of discrete valuation by property. I think the system of property banding also introduces an element of unfairness in that people who are just over the floor of a particular band are paying significantly more than those who are just under the ceiling of the band immediately below them. We have moved on a long way in terms of how we can value properties at any one point. In 1991, we simply did not have the technologies available to us that the assessors and the evaluators have at the moment. The final point is about the extent to which that will impact on local authorities in terms of how they might implement a scheme. I ask in my very short statement of evidence exactly what scheme are they implementing. At one point, we were presented with the proposition that the additional revenues generated by the changed multipliers would be put into some schools in Scotland. Initially, on a mechanism based on particular local authorities, the signaling or the discussion that is now current implies a transfer of education funds directly to schools across the piece. I can only assume that the way in which the Government intends to operate that is to reduce central grant and assume that local authorities will generate additional revenues through changes in both the multiplier and the probably increasing council tax that we will see next year. I think that that leaves a pretty big gap considering that we are now only a few months away from introducing these arrangements. I think that it is unsatisfactory that we do not yet have a clear indication of how that transfer of monies will take place. In principle, of course, as has been suggested, I object to that transfer. I think that a local taxation should be allocated to local decisions rather than appropriated by central government. Thank you, gentlemen. Before I move to the first question, all three of you are right to mention that there is an opportunity to raise wider issues rather than just the stations before us. For the record, the two aspects that we are specifically looking at, as well as those wider issues, are the Government's current proposals reforms that will make the system of council tax fairer. To what extent will those changes be straight forward for local authorities to implement? I should also note that, although we are not reporting in relation to the council tax reduction scheme for the estimated 54,000 families on net incomes of below £25,000, we cannot take evidence on it and will give that evidence to the Social Security Committee that will be reporting in relation to that matter. I will get that put on the record before we go any further. First question, Andy Wightman. Thank you, convener. For the record, I was a member of the commission on local tax reform. I want to ask you a question about progressivity. We cited in the tax commission a quote from the Mirdley's review that there is a strict economic definition of progressivity. A tax is said to be progressive when the average tax rate rises as the tax base rises, so an income tax is progressive when the average tax rate rises as income rises. In your evidence, Professor Bell, you say that those on higher incomes will contribute a larger share of their income in council tax after the change in ratios is introduced, hence the policy can reasonably be described as progressive. Given that there is a charts and data in the commission's report showing that the council tax overall is regressive with respect to its own tax base and net-equivalised household incomes, I wonder whether you can provide any clarity, because those words are being bandied about and they are politically loaded as well. However, you are economists and various other kinds of academics, so I am sure that you have the answer. The answer would like to give us the answer first. I guess what I was saying was that in relation to the previous situation, which was admittedly regressive, we moved a fraction upwards. I think that that was solely the point that I was trying to make. I was not trying to say that this is now a progressive tax. I was trying to say that in response to the question, is it fairer, I suppose, that one could say marginally so, but not universally so? I think that that is all that I was trying to say. Obviously, there is a much broader debate and a debate that was held by the commission regarding whether, when we think about progressivity, it is simply about, in relation to current income, as important as that obviously is and as important in terms of the public responses that the commission had about that focus. I think that both Professor Bell and I have said in our written evidence that one also has to think about taxation in terms of wealth and the impacts that it has on wealth and the fairness that that has. I think that we were both in different ways making the point that housing taxation as a whole and in terms of wealth is flawed in terms of the impacts that it has. There are arguably very important consequences of that for the productivity of the economy, for making choices to tax income as opposed to property and things of that kind, which in the longer term have really quite significant consequences on an efficiency basis, let alone on the fairness agenda, which is also so important. Professor Kerley, do you want to add anything to that? Yes, we were asked all the committee has specifically asked for information on whether this is fairer and that to me is a word that is very, very hard to define. You have a technical definition and progressive, I in fact said in my very short note of evidence that I think it is slightly less unfair, which is a kind of guarded way of arguing about it, but I would agree with my colleagues that when we talk about wealth and income what is striking to me is that when you look across the larger developed economies, say within the OECD, you find considerable variation as between the capital wealth and income. It depends on a whole variety of factors, including how you property tenure, how you ascribe pension benefits and pension savings and things like that, so it is better, but it is still not marvellous. Professor Gibb, in your submission, you talk about the waiting being more fair, but the values that place the properties in the bands will, in most cases, be wrong and increasingly illegitimate, and you then go on to talk about it as a political fudge that does not resolve the underlying problems indicated above. If every evaluation were to take place, would that make it less regressive, more progressive? Would it make a difference to the fairness question that we ask? That would be good. That is a very fair question. I think that this is about the necessary conditions for an adequate system of property taxation, and I would argue that where we have property tax systems around the world that are deemed to be relatively effective, they all have regular evaluations. Often every year, they revaluate. It is an automatic part of the process, but in a situation where property values, which we base the location of individual properties into bands, are based on 1991 values, where the evidence to the commission suggested from a very large sample local authorities that maybe 57 per cent are in the wrong bands, some too low and some too high, that really does undermine the credibility of the system. It is about the underlying credibility. There is then a second question about what tax rates you apply and what your fundamental fairness is, but it is a necessary condition. Those of us who generally would support the idea of property taxation recognise that there is a necessary condition that has to be met, and that is what the revaluation issue is about to me, at least, if that helps. Professor Bell, Professor Kerley, do you want to add anything to that? I mean, what I would say is that house price inflation affects different localities across the UK, across Scotland, differentially, so a city like Dundee has not seen its property values increase all that much since 1992, whereas Edinburgh obviously has seen big increases. In the sense that that is an arbitrary increase in people's wealth, they have not done anything, they just happened to live in the right place, and they will be able to transfer that arbitrary increase in wealth to succeeding generations. Especially if they move away, they will be able to realise some of that increase in wealth, which has not come out through economic activity, it is just by the dint of the fact that they are living in the right place. I mean, I think that there is a strong case for trying to proportionately tax that arbitrary increase in wealth, and you are only going to be able to do that if you can accurately value the housing stock in the different places. I took two minutes the other night on Zoopla, and it cost me nothing. I got an immediate valuation from the house that I am living in and they knew what it cost when we bought it. I just find it difficult to believe that it is such a difficult problem now to revalue Scotland's housing stock. Professor Kerr, I would stress a couple of elements, convener and Ms Smith. The first is that there is the technical issue that Ken referred to. Surely if you are carrying out a census, which is in effect what a property revaluation is, you want that to be as accurate as you can be and to be refreshed regularly rather than being left for. If you actually proposed as a legislature that we should have revaluation of properties on 30-year intervals, people would laugh you out of whatever international bodies legislatives are represented in. That is a significant concern. Would that improve fairness? Yes, it would. It might upset some people who would find their property revalued up. It might please some who saw their property revalued down, but it would indisputably be fairer. There are sub-elements of this, which are clearly of concern to many citizens. I think it is the valueers who refer to it, which is that any revaluation that arises from house improvement is not taken account of until the sale of the property onward. Part of what we have seen at least in the period since about 2007, so we are now talking about nearly 10 years, is a significant investment. You can observe it as you walk around the streets of any town or city in house improvement. Rather than house movement, I do not have the figures and I do not know if they are available. People are sitting on a wall of potential revaluation change without that coming through into the system. Thank you, Professor Kerley. Graham Simpson, just before I take your, is odd revaluation. To pick you up on that last point, Professor Kerley, you are absolutely right. It has always struck me as ridiculous that you can only ask for your house to be revalued within six months of moving into it. Whether it is right or wrong—a lot of them are at the wrong value—that is your time limit, so you cannot challenge it. That seems to me a ludicrous situation. Professor Gibb, you mentioned other countries where they do revaluation every year. I would be quite interested if you know the names of those countries, what they are and the experiences that they have had. If any of you know about the experience, I think that Wales has done a revaluation, if you can give us any evidence on that. I want to remember countries that I do not want to say, which I think are probably annual, but I am not absolutely positive. I did a report for the local tax commission, which is on their website, which I think has that detail. However, there are states in the United States that definitely revalue on that regular basis. I am not sure, but I do not want to say that I am not absolutely sure, but there certainly are states to do that. The point is that, technically, with automated valuation systems, it is a statistical exercise. It is not a difficult thing to do in the great scheming. The work that Chris Leishman did, which I mentioned earlier, which was the sense of taking a sample of 700,000 properties, was relatively straightforward to use data in scon pretty quickly to work out where properties, which band they would now be in, if the bands were updated to contemporary values. It is really not a technically demanding thing. It is all about the politics of doing it. The Welsh experience, I think, is there something that I was asking about? Yes. I think that the thing with the Welsh experience is that there is some evidence that there was an attempt to transition the way in which people were affected by the revaluation. I think that there was some political and popularity around that, undoubtedly. It was something that was carried out and was ultimately successful, because it was achieved, but there was quite a lot of white noise around it, undoubtedly. Have they said that they will do it on a regular basis from now on? I do not know that. I could not answer that. Ruth Maguire is on revaluation. On the point of revaluation, I was interested in the notion of discrete property evaluation, just to hear a bit more about the practicalities of that, and the opinion of the panels as to whether we should build something in that means that we do not end up in this position again, so we build something in that means that revaluation is part of things moving forward. I would like to answer that. Discrete clearly, as the name implies, says that you attribute a particular value to each property, and the only occasion on which we attribute some form of value to a single property at the moment is at the point of transaction. When I use the phrase some form of value, we know that there are market pressures on that at particular times in the cycle. Somebody will say that my house is worth £150,000 and nobody will buy that, so I will sell it for £140,000. A month later, two months, three months later, it might be worth £155,000, up or down. The majority of people would understand that, even if they were slightly galled by it or, indeed, ragingly angry, as you can see from people who sit on an attempted sale for months and months, they think that my house is worth this and I must get it. But if there is a mass valuation of particular assets in a given street, in a particular form, that will be for valuers to take a view on whether that is attributable to every single property or not. It is probably slightly easier on very homogenous types of property, but in parts of cities and parts of towns it is kind of, well, that one, we do not know how big that is. We can now work out an awful lot of that. As David Bell said, you can look up some of that and get a valuation of your own property, which is at least approximate. What we have at the moment is a band within which your property sits. That provides a measure of safety for decision makers and valuers to say, well, it is around about £180,000 or whatever it might be. There are analogies in university education. Many of us used to mark people as A, B, C, D, E. We no longer get away with that. We have to say, this merits 68%, even if we know it means 70% or 66%. To add to that, I suppose that one disadvantage of regular revaluation, therefore, is that local authorities will be more open to revenue risk.  Well, 1992 values, they are not going to change, but there is the possibility that house prices or volatility in house prices then get transferred into volatility in council tax revenues. I was going to make the same point that housing markets are volatile. That is a problem on revenue risk point of view, but it is also a problem if you do not revalue those strange dispersions that take place. It is not just that an individual property value is now 26 years out of date in terms of where it has been located in that value distribution. It is the sense that neighbourhoods and types of property within local authorities change in their relative value. Nobody would imagine that in the city of Glasgow the relatives of house prices have remained the same, and that would be a crazy thing to think. There is a sense that regular revaluation at least allows one to signal in evidence what is going on. The other thing that I would say is that Britain remains, with the exception of Ireland, the only country that has a banded system of property taxes. There clearly were arguments for having bands in the 1990 period when this was all being established, things to do with the fact that perhaps it is less likely that a property will be even if it is misvalued if it is within a broad band, it is less likely to be paying the wrong rate. You can see why people would do those sorts of things, but there are clearly also attractions and advantages to having individual property values for other taxation reasons, for other reasons that you might want to have that information for the buying and selling of homes, for instance. It remains a really convenient way of sorting out the issue. Finally, to say about revaluation and valuation generally, of course, that is about the tax base and the other side of the coin is the tax rate, the ability to set a tax rate. If you have tax rates effectively fixed, that will amplify the volatility that changing house prices would have, so there are two parts to the bill that people face. Can I just check then? As I was hearing the evidence, it seems slightly contradictory, because everyone was saying that wintery values are so out of date that it just has to happen at some point. I think that Professor Bell will be speaking about that there are dangers in regular revaluation, because it could not, in theory, undermine the stability of the tax base at a local level. We are hearing that there are dangers in revaluing at the same time, so a little bit of clarity around that would be quite helpful. However, I suppose that the follow-up question would be also that the Scottish Government has been clear that it is clearly not going to revalue the proposals that it has before it. What is the message that you would be giving this committee in terms of whether the revaluation is not going to happen in the short term? Should the Scottish Government be planning for the long term for what revaluation would look like and should it, as Ruth Maguire suggested, build in the robustness so that once it revisits it once, there is a structure in the process in place, so we do not have to return to this to talk about the mechanisms of revaluing going forward. I would certainly go along with that. In terms of the volatility—house price volatility—that I talked about, it is always possible once you have the information to put a break on how volatile, so you could average the last five years and make the case for taking that kind of action. If you have not got the information, you do not know what the kind of volatility in the local tax base might be, so the first step is to collect the information and then hopefully get yourself into that position where you are not coming back regularly and discussing council tax bans, which I have got to say I have done for now decades. There are other parallels that are more germane than the academic one, which is that that kind of regular revaluation and reassessment is now a feature of many, many different aspects of life. We would not have the current concerns that we have about defined benefit pension schemes if it were not now possible, as happens, to revalue those defined benefit pension schemes in their probable deficit virtually daily. It used to be the case that people who ran superannuation and pension schemes revalued every year or so every couple of years. They did not have this kind of suddenly the deficit has gone up by 85. The more you know, the more you are aware of variation and change, but it is better to know than not to know. I think that one point that I made in my submission is that one of the arguments in favour of property taxation is that it may be a corrective tool to try to smooth that volatility in house prices. If we get the design of the property tax right, that is one of the reasons why many people support it. The other thing to say is that we have had a statutory basis in the past for regular revaluation of our property taxes in the UK under the rates, and we had a terrible record in implementing that, both in Scotland and in England, particularly in England, but we are not much better here. That is a problem that exists all over the world. Britain has been particularly bad at it, so we have to have pretty built-in braces, kind of statutory approach to regular revaluation, and even then things might happen. I will give Alexander Stewart. The whole subject of revaluation, and you have touched on many aspects of it today, is a major problem for us as we go forward. If we do not have the short-term financial planning and the long-term financial planning that is required because of the revaluation situation that we find ourselves in, it makes it virtually impossible for some of the local authorities to manage their process as they look at where they are going to be in five or ten years' time, because they do not have that flexibility to look at what could be achieved or might be achieved as they go forward. I would like some sort of views on that. Okay. I would like to take that one. No one is making eye contact with Mr Stewart. Oh, I think that Professor Bell might have done there. Well, long-term planning for any public body, I think, is a major benefit. In the UK, in general, we suffer from a short-term view of the world that does not help public bodies to plan. Probably the root cause of that is our annual UK-level budgets, which then cascade down to Scottish Government, down to local authorities in Scotland and so on. That is on the grant side, which is the more important side of the local authority income. They cannot be sure, over the medium and long-term, where that element of their money is going. That is, as I say, a function of the somewhat peculiar way that we approach budgeting in the UK. As far as planning the tax revenues is concerned, you have got three things. You have got the stock of your housing, which is probably predictable. You have got the valuation of that housing, which is open to some kind of volatility, it seems to me, but should be mainly stable. You have got decisions that the council or, indeed, the Government might make about the rate of council tax or whether it can go up or down that kind of decision. I suspect that, on the council tax revenue side, a key issue is, for a local Government, to be clear over the medium to the longer term, where the division of responsibilities between it and central Government is going to lie. That itself has been a bit of a moving target in recent years and now appears to be moving somewhat again with direct intervention in schools funding. It leads to another source of volatility, which is the question that I must admit that I am still slightly confused about, which is the possible localisation of income tax receipts at local government. David mentioned the volatility of house prices affecting the tax base, but that is probably less than the volatility of income tax receipts. I think that there are a range of other questions about localising income tax receipts in terms of competition and displacement across local authorities and being of benefit to richer local authorities specifically. It seems to me that that is another source of volatility that would impinge on the ability to plan and create a much more defensive approach. Thank you, Professor Gibb. Now we have got to be one from revaluation. I spent quite a lot of time on it, but Mr Simpson, did you have something on revaluation that went to that? Just a follow-up to, again, Professor Gibb, you said that Britain was almost alone in the world by having property bans. What do other countries do? They tend to set a schedule of rates, but they tend to set a given rate at a local level, or they combine it with some other rating level. In the broadest sense, a given local authority would set a tax rate each year and apply it to its property. They would then have a whole series of ways of discounting, supporting and assisting people, so it does not follow that everybody pays the same tax rate. They will be discounts and such like that. It is more like the notion that Richard was talking about, a tax on a discrete property. Similarly, in the way that is how the domestic rate system essentially worked, you had a valuation and you had a tax rate set by the local authority or combined local authorities, the region and the district. I think that is what is in one's mind, but it is clearly a range of ways that you can do that. Apart from the Irish, I do not think that anybody else would set a whole schedule of bans and locate properties into those wide bans. I think that is right. I want to move on from revaluation. Mr Gibbons, do you want to speak about revaluation? I would just say that a rolling average of valuations over five years helps to smooth out volatility and, at the same time, to introduce greater fairness to the system. Rather than an average of such, but a rolling average? I would give more predictability for local authorities as well, it seems to me, for their tax revenue. We started off by asking if the proposal before us was fairer than what it is moving away from. We got some comments from each of you that, yes, it is, but everything is relative in life. It is a bit fairer, but it is not really where you would like to see fairness moving towards. I think that is a reasonable summation. In terms of fairness, would you take into account the council tax redistribution scheme or reduction scheme rather, which we have to look at the practicalities of how that will work? Does that make it more fairer but also in terms of how the moneys are to be used? Does it make it more redistributive because if the £100 million raised across Scotland looks as if it is going to be redistributed across Scotland to areas of particular deprivation, some would argue that that is a particularly fair thing to do. It would appear, look at the Scottish Government's website, that that is likely to be based on free school meal entitlement in schools. That £100 million taken by and large from wealthier households, but targeted in a focused way to some of the most deprived communities in Scotland, would seem to be fairer also. I suppose that I am trying to tease out the bigger picture when you look at the proposals before us, when you look at the council tax reduction scheme proposals and you look at potentially, although in more detail from the Government of course, on the redistributive aspect of it. I would quite appreciate some comments on how fair it is or otherwise. I am not entirely clear about what has been proposed and how that has been amended and what is now proposed. The fundamental that we need to take account of is that whilst we can and do categorise some areas as being more deprived than others, we can go right down to the small data zones, 6,000 odd of them. What we should remember is that an awful lot of people who are poor on low incomes live in areas that are not defined as being deprived data zones and vice versa. There are poor people who live in more privileged areas and there are more privileged people who live in areas that are categorised as poor. If you use free school meals as a mechanism for redistributing to say a particular school, unless that is channeled through to those children in that school who are in receipt of free school meals and are therefore their definition from a low income household, it is not clear how you achieve free targeted fairness. You may generally favour a particular school, but if you look for example at Edinburgh, I know best because I live here. The most recent data from the City Council, I think my recollection, suggested that the level of the proportion of children living in poverty in Morningside-Merceston, which is by any account a relatively prosperous area overall, was still about 15 per cent compared to the 30 per cent of children in some of the far more deprived areas. It is a very complicated chain of causality that takes you from what we do with that money. I personally think that a redistribution to areas that are more deprived has a lot to be said for it, but it is not that easily done and I am not clear how what I think is being proposed will achieve that. Professor Kerli, anyone want to add to that? I will take Professor Gibb first and then Professor Bell. Two things, I would say. First of all, there is a criteria problem here in that, yes, it may be fairer given what Richard just said about the targeting of that redistribution to schools with free school meals measurement as a way of allocating funds. Equally, there is this other criteria about local autonomy, and clearly local autonomy is being reduced if this money is being taken by central government down towards the schools directly. You could argue that an alternative way of redistributing is giving local people the power to make those decisions. That is a different way of thinking about that. The other thing to say about the council tax reduction scheme is that for those people who are in the higher band properties who are already receiving council tax reduction scheme, that will simply pay the extra that they would be faced with. It is just this group who are not in council tax reduction at the moment, not qualified for it, up to media and income level. As David said, that is quite an extension of the level of means testing. Admittedly, it is a low threshold, a 20 per cent taper, which is much lower than many of the other tapers that apply means testing, but it brings many more people into that, which many people would be concerned about. I mentioned earlier the issue of take-up, which is already low for the scheme. I think that there are some concerns about whether people will actually take it up. Is that as progressive as it might be as of a more directly, perhaps, of trying to address that? A couple of things. Firstly, the council tax is a mixture of a tax on place and on households, or it relates both to place and to households. The point that Richard made is that in some places, data zones to take them to their lowest level in Scotland, the zone might be classified as poor, but there are probably households within that that would not necessarily meet the council tax reduction criteria. In terms of where the decisions are being made, if you continue to redistribute, there is a point at which the incentives for richer areas to increase their tax revenues declines. There is a question about how that might affect the willingness of the richer local authorities to strive for more income. Ultimately, I suppose, we are not very good at measuring the effectiveness of the money that has been redistributed to schools that have high proportions of pupils that are getting free school meals. We do not really know, and it has been a long-running problem. Our information on Scottish education is not that great. It is pretty difficult to track down the evidence that that kind of extra spending really works. It has the potential of being redistributive, but Professor Kerley mentioned the 15 per cent of kids in the morning side who have been deemed to be… Approximately. Approximately. If it is 13 per cent, we will not haul you over the coals for that. The idea being is how do we make sure that the potential to redistribute is some of the most vulnerable young people to support them actually happens in reality. That becomes the mechanism by which schools or communities or the local authority has a say in how that money is directed. Understand that discussions are still on-going with COSLA in relation to how that might happen. I would not give you any additional thoughts for the committee on how you think that should happen. I do not have to have, but no takers on that. I do not have a thought. I will repeat again my point that I am not being facetious when I say exactly what will local authorities be implementing as from April of next year. Will they be redistributing roughly in the order of 100 million to particular schools? I still think that the only way in which I may be wrong in this completely, I think that the only way in which the government can in short order affect that change is to simply reduce central grant and assume that local authorities will generate additional local revenue. The government will redistribute that money to particular schools in some particular manner, but I am not at all sure whether Victoria Key has the capability to do that kind of exercise. Andy Wightman The case is not that the non-domestic rating is by statute, collected by local authorities but pulled nationally and redistributed and everybody knows that. Cities like Aberdeen complain because they have a relatively high tax base, but they never see it all coming back. Cancer tax reduction scheme, as I understand it, is funded by Scottish Government funds, and so the redistributive effects of that are undertaken by Government Scotland-wide. The problem that seems to me with redistributing council tax income is that you are redistributing somebody else's income. It is one thing to have a redistributive scheme with your own resources, or with those by statute that you have called in, i.e. non-domestic rates. It becomes a little bit more problematic when you are doing it by, for argument's sake, stealth, because we do not have a statutory proposal to do it. Is that with that be fair? Nodding heads rather than a particular particular comment. Yes, we will shine a light on you in a moment, Elaine Smith. Do you want to come on that? Actually, it is to follow up on that point to an extent as well. In the submission by Professor Gibb—sorry, I am not picking on you, because I welcome Professor Bale just in a second—you say that ending the council tax freeze and giving the councils back the power to charge full council tax in second homes is offset by the implementation and you call it ring-fencing of the extra £100 million to national government priority. Professor Bale, you say in your submission that you talk about the local authorities losing control of fire and police services in recent years. You are going to say that direct intervention by the Scottish Government and Education funding would seem to further erode local authority policy options. I suppose that I want to explore a wee bit further the ring-fencing. I do not think that we are clear, as Professor Kelly said, on how that might work, because if the authorities raise the tax, it would not seem that the Government can take it, but what it could do is lower the grant to offset that raise so that it can then get the funding to redistribute it. I certainly would not argue with redistribution. However, in terms of ring-fencing, my understanding of ring-fencing would be that it would be a Government policy and that it would be extra money. For example, in the past, Governments have wanted to provide respite care, so extra money has been identified and local authorities, if they like, have been an agent of providing that, and the Government has provided extra funding. That seems to be a reverse ring-fencing in some way, so could I have your comments on it? I would put it as that extra money, that extra £100 million that local authorities are raising as a result of the higher weightings on the bands, but they do not have the power to use that money as they see fit. That is the bottom line. In that sense, it is ring-fenced and it is taken out of their control to be able to use it. Maybe ring-fenced is the wrong phrase to use, but the point that we are trying to make is that it seems to me that they do not have control over that extra resource, which seems to go against the spirit of a relaxation of the phrase. Although it is only a kind of partial, it is a cat relaxation of the phrase. That seems to me to be inconsistent with the idea that councils will get the power back to set a few full council tax on second homes, so it seems to pull one way and pull in the other way. That seems to be a pulling back. It seems to sit at odds with the consultation about localising income tax collection. Can I just check when we talk about ring-fenced? I remember back in the day when I sat on a predecessor local government committee, we looked at the fairer Scotland fund as it was at the time, and that was the ring-fenced moneys that local authority had for a whole suite of, I think, agreed priorities with government. That money was mainstreamed into the core local authority settlement, and they then decided to spend that on. I hope that I have the name of that fund correct, but the point that I am making is that there are other examples of where additional directing of funds from local authorities must spend money on whether that is ring-fencing or not, but has there been a relaxing of ring-fencing in some respects elsewhere, just so that we can get a balance to that? That would be one example, but it might be the only example, but are there other examples of a withdrawal or a rolling back of ring-fencing for local authority funding? Right back into my memory here, my recollection is that historically there was more ring-fencing than there is now, and that the COSLA local authorities objected to the reduction in their freedom to act as a result of this, and the government agreed, and there was a rollback on ring-fencing. I can give a couple of relatively small examples, which illustrate the difficulty of ring-fencing, and whether it is desirable or not. Firstly, a number of locations within Scotland were given money from what I think at the time was called the city's fund, and in general that was spent on rebranding exercises for various cities. Those of you who know Aberdein will recall Aberdein's city and Shire, Edinburgh, substituted the strap line of the festival city for a kind of expensively designed set of what were meant to represent bridges. I'm not good on design, but they didn't speak bridges to me. That money was washed out the door, and I forget what order it was. It wasn't a great deal, but by its very nature ring-fencing is indiscriminate about the value, it's just he or I as a chunk of money spend it in this way. More seriously, as part of the recognition of poor health conditions throughout Scotland, local authorities were required to, at one point, to appoint health liaison or health promotion staff. I can't recall what the title was. They were all given ring-fenced money to do that. They all did that. It ran out at the end of three years, and most of them quietly terminated their appointments. Last time, I spoke to anybody in Health Scotland, there were only about four or five such posts or units surviving throughout the country, because the local authorities thought that they were not particularly effective means of spending money to achieve an object that we would all agree upon. They just thought that there were better ways of achieving that. That's quite important for balance. We can raise concerns about additional direction of funds nationally for local authority funding and ring-fencing. Over the last 10 to 15 years, there has been a move away from ring-fencing in some circumstances. I think that's quite important for balance. Kenneth Gibson. Thanks for that, convener. It was a famous historic accordat of November 2007, in which I've always summed 60 ring-fenced funds at Irecall. I want to look at the figures of where the £100 million is going to come from and the mechanisms thereby. If we look at the figures from SPICE, they say that, for example, Edinburgh City will raise £15.6 million of that, whereas Dundee will be able to raise only £1.4 million. The Scottish Government has said that £100 million will be hypothecated for education, so if we assume that the mechanism for redistributing that, because the council tax is not going to be shifted around, is the grant formula, one would assume that Edinburgh would get significantly less than £15.6 million in Dundee significantly more.  That seems to me a rather strange statement, because one would assume that if an actual fact, Edinburgh was still able to keep its £15.6 million in another format, but money was going additionally to schools in Dundee, but less to Edinburgh. What that would mean is that Edinburgh would, in effect, have additional monies for the non-hypothecated funds, whereas Dundee would have less. What's your understanding of that? I understand the point. I'm not quite sure that I have a very clear solution, might it be that Aberdeen says, although income is being gained overall, as a result of this. It will get its £10 million or whatever. Much of that will be taken away through the grant, but maybe not all of it will be taken away, so it might be argued that Aberdeen is no worse off. Does that seem plausible? However, Dundee gets considerably more than the addition that it raised domestically, because its grant will be increased. There will be a complicated set of steps, it seems to me, to ensure that no local authority is worse off, but, of course, it will be getting a standstill budget at least, which is what it would have got had the ratios not increased. Although it may not be worse off in total, if one local authority is getting significantly more in its education budget, it will have to make significant reductions in other areas of its budget, whereas if another local authority is not getting all of the additional money that is being raised through its education, it will have a significant increase in other areas in which it can spend its money. Is that not a concern? Is that a thing that should be avoided in terms of this policy? If I am hearing what you are saying, Mr Gibson, there is an element of a local authority does not have an education budget. If you think in terms of ring fencing, which this is, the only element of an education budget predetermined before anybody starts working through it, now nobody does zero-based budgeting, they pretend to, but they don't. This will be the only element that somebody has to write in. The figures are, when you compare the suggested figure against the total education spend in every local authority, it is a relatively small amount of money. The local authority can make choices about what it puts into its budget and identify this as a part of what it is doing for onward redistribution to some schools. If all schools get in, we would need to work our way through what proportion of the children in each school and across the authority as a whole are entitled to free school meals before we would see any kind of correlation. I mean, when you look at different aspects of local authority data, you find that they often don't actually correlate that well. I think that you are making something very straightforward, very complicated. Edinburgh is going to raise £15.6 million in education, but if it is going to keep the same amount of money overall that it is raised, surely that puts additional pressure on other local authority services within those local authorities that get more than they are raising in funds to spend on education through this hypothesisation. Is that something you should think should be done or should not be done is what I am trying to get clarified? In other words, do you think that this money should be additional and a hypothecated education but recirculated across Scotland or should it be that no local authority is indeed any worse off, which means that the non-school budgets will indeed be worse off in poorer areas? Other than the general principle that it should be a matter of choice for respective local authorities to determine what they spend on, that is conditioned by legacy and it is conditioned by circumstance in one local authority and surrounding local authorities. Edinburgh spends significantly more on culture than do the surrounding Lothians. Indeed, it is more income from that as well, but what that would mean is that if there is no change then the local authorities that are already more prosperous will become even more prosperous and the gulf between them and poor authorities will widen rather than diminish, which is, of course, the reverse of what the policy is trying to achieve. I will check for clarity, Mr Gibson, because my understanding is that it has been intimated that the reason that local authorities will keep all the cash that they raise from that £100 million is that there is no mechanism to take council tax revenues off of local authorities in the first place. By definition, if it is £100 million additional money, no local authority can be any worse off and it is about the distribution formula for money coming from the centre into either revenue budgets or direct to schools that we need more information on with that to change. I am just making sure that I was actually understanding that fully. Any additional comments on that before I move on to some of my other colleagues for a additional question? No, okay. I think that Alexander Stewart indicated—just to give you a roll call, a name called Grimms Simpson, Andy Wightman, I've got you down for questions, okay? Alexander Stewart. Following on from what you just said, the individuals who are going to receive the bill that's going to tell them they're paying more tax, they will have the assumption that that may well be going on to the services and facilities within their own area. That may not be the case under this situation. The circumstances, the control of the council to manage that situation will be there'll be a tension potentially in that whole process. Then we have the situation, as Mr Gibson is talking about, where it may well be the case that there'll be potentially winners and losers in some local authorities. The timescale that we have to do all that is quite tight. How do we square that circle? It's not my problem. I think there is more than one circle to square. First, there is this in this form of proposed redistribution here and the relievering. There are local authority elections occurring, as you know, in May of next year, and between the decision on council tax levels and, therefore, the impact on households which has to take account of the reproportioning will be at most a three-month period, so much April, not even quite that. I think there will be an enormously frantic rush during that period. There will also be a lot of extremely heated angry meetings in church halls and school halls, the length and breadth of Scotland. Even if you take my point about the distribution of property assets, that may be less frantic in some areas than others, but even in areas that might otherwise appear to benefit, it's going to be problematic. I'm not technically able to know whether all of the necessary different decisions can be made in time and implemented in time. I suspect that Professor Gibb may make the same point, but how are we going to contact all the people who may be eligible for additional council tax reduction between now and the date that the council tax bills go out? I'm not clear how those people are going to be identified. That's the recurring theme that we've had from evidence this morning. Professor Gibb, do you have a name check? Do you want to add anything? I'll just see what he said. So, all we have in front of us at the moment is a statutory instrument to increase council tax across the country in full bans, which has been imposed by the Government. What we don't know is a whole set of assumptions, which we've talked about this morning, about what happens to that extra money. We actually don't know because nobody's spelled it out. We assume it's going to education. We are assuming they might use school meals as a factor in distributing it. We do not know actually how they're going to distribute it. We don't know how they're going to get the money from councils. Do you think that the Government should have got its story straight, its act together, before introducing the SSI? So, there's a lot of things that apparently we don't know. Do we know some of that? And if so, could you be clear about that? And what are the unknowns? So, the things that we're unclear of, we'll obviously ask the Scottish Government during our consideration of evidence in relation to this. I think clarity on the mechanism for distribution is very important. I've got to say that I wasn't entirely clear how it would be directed, so I think there's that. I guess, following on from the discussions that we've already had, how will the grant from the Scottish Government to the local authorities be adjusted? Because, as we know, the Scottish Government has no power to take away the additional council tax revenue from the local authorities, so it will all come through this adjustment. What is the exact mechanism for that adjustment to happen? Okay, and anyone who wants to add to that? I think that there's a question in all of this as to whether this is the end of the story. Is there further local tax reform in the offing? Are we simply stopping at this point? Because, you know, there's been some discussion in political circles that this may not be the end of the process, so I think that that's a real uncertainty because, you know, simply ceasing the reform process now would seem fairly disappointing in some respects after the work that's been done and also because of the things that we've been saying about the nature of the proposed SI, so I think that that's an important issue to at least consider and put back to the Government. That's helpful, and again just for clarity, so the two aspects that we need more information on is the distribution mechanism for the monies raised and how grant adjustments will be impacted, those are the two things that would be good to have more information on. In terms of it being imposed, I suppose that the Scottish Government was pretty clear that that was going to happen. It was in the manifesto, so I mean, I don't think that there's a lack of awareness amongst the public that that was going to happen, and it's pretty clear that the money will be spent on education. That's all public information, yeah? That's why I choose not to see a question in the way in which you couched it. Governments make decisions because they have the votes to make those decisions, and that's life. The other factor that we're not aware of is the extent to which different local authorities will themselves propose to use their reintroduce freedom to set a higher rate of council tax across the piece, which will mean that if you look at the overall figures, that means that the highest-bounded properties will be potentially looking at an increase next year in the order of 25 per cent. That is a direct consequence of a several-year freeze in every setting in every country. When you freeze an otherwise rising price level for a period of years, there is a huge jump upwards when you make the change. That's helpful, and it's specifically on that, because it was leading us into our next question, which was about the 3 per cent cap increase in council tax, but I'll maybe take Andy Wightman in first. Yes, I just wanted to follow up on the question of public information and awareness. I mean, notwithstanding what the convener said about the words in the SNP manifest, I'm not sure that £2.4 million households did appreciate that, or indeed are appreciating what the changes are. I mean, I'm getting constituents writing to me in band E properties that are worth less than band B properties, appealing, for example, and they won't have any success in that, of course. But I'm just wondering what's your sense of what we might need to do, or indeed how the public might respond to the fact that by February, March next year, the multiplier will be in place, plus a possible new rate will have been applied, and the public won't be terribly clear about why their bills are rising. We have evidence from Les Robertson in the next session saying that local government will not be in a position to accept applications to reduce the charge until after the annual billing process. In other words, council tax reduction, new council tax reduction, eligibility will have to be applied for retrospectively. So there's a potential for quite a bit of muddle amongst, perhaps, significant number of people. How do you think we can mitigate that? Okay, who'd like? There's a lot of ringing of hands going on from our witnesses this morning, Professor Bell. Being social media and a TV advertising campaign at the moment, but we need—really, I mean, it is a serious point because people will get a shock because they've been used to almost 10 years of a flat bill, and all of a sudden it will hike up quite a bit. So the Government really does need to put its mind to getting this information out. I'm not the best person to advise them on that, but it seems to me that you do need to work both on the stray increase in the council tax bill but also on the council tax reduction, because although it may occur retrospectively, you've got to get the information out there for people to gear themselves up to think, oh, my income is a bit higher than the old council tax reduction, but now it qualifies under the new scheme. Do you want to add anything to that? I suppose that this is an opportunity to get a lot more information out about the reduction scheme than otherwise would probably have occurred because of the short-time horizons that are there. Perhaps there are things like ready rechners that could be used to help people to get an easily accessible sense of what their gross income for benefit purposes actually is. There's been quite a lot of useful work done with that in terms of housing benefit over many years. I'm sure DDWP will have information on those kinds of things, which should actually be very helpful just to get somebody over the first hurdle of thinking about whether they should be applying or not. Do you want to add anything to that? Okay. Professor Kelly, did you want to? Well, a small point. If there is an enhanced form of mitigation for some households, and it's not a large number of households, that kind of begs a lot of questions about how are people made aware of that. Now, it strikes me that without being incredibly intrusive into individual households, that has to be a kind of sheep-dip model of awareness, i.e. press and television advertising, possibly social media advertising. I'm not at all sure where the payment for that would come from and the form of it. I assume it should rest with the Government because it is a countrywide arrangement and you want a common similar countrywide message going out in various forms. That can't be a cheap exercise. I don't mean can't as in it shouldn't be, I mean questioning. It's going to be a few mill in itself. Now, that's been the recurring theme throughout your evidence in relation to how we get the message out there in relation to council tax reduction scheme and make sure those who are not already in the system are getting that that they can apply for it. Maybe one final question that was said in answer to the last question that, you know, households across Scotland have been used to static council tax bills for many years and that that's going to change. Obviously, the Scottish Government has said that there will be a cap in relation to council tax at a higher level at 3 per cent. I wonder if you've got any thoughts on how that would actually work? The authority will start from the presumption that they would try and hit the 3 per cent figure or 2.99 whatever is achievable. That would at least be the modelling that must be going on at the moment, at least from the conversations that I've had. There will, of course, be political decisions to be made in different councils about whether we do that or whether we try and get the lowest increase of any council throughout Scotland. How that emerges is very much how we know budgetary decisions and processes emerge in different councils, whether the majority of which there are few or shared administrations. It's a kind of trade-off, but I'm reckoning that most of them will go for the near 3 per cent figure. I suppose I'll hear how the Scottish Government stops council setting an increase of 4 per cent. It's how a cap is enforced. My apologies for not making that clear. Reduce grant by individual council, which would be a variant on whether you're there. We talked about ring fencing being abolished in the historic Concordat in 2007. We forget that the council tax, so-called freeze, was ring fencing of Government money. It was an incentive to not increase the council tax because the Government has no statutory powers to freeze council tax across Scotland. It can, however, act against individual authorities. This is the reinvention of the £70 million each year that local authorities got into the revenue grant to encourage them to set a 0 per cent tax increase each year, so some mechanism around that is what you would anticipate. Do you want to add anything to that? That probably, given the state of the economy at the moment, that will mean increasing real burden of council tax, in that not that many households are seeing their income increase faster than 3 per cent at the moment, or as fast as 3 per cent even. Thank you. A couple of bits for supplementaries. My advice is that we have to intimate first. If it's specifically on that, I had a slightly wider supplementary. Okay. Andy Wightman. The last time we did sort of rate capping was in the 80s, where we did it under the Rates Act of 1984 and it was a statutory thing. Do you think there's any merit in considering a statutory rate cap, if that's what Government wants to achieve? That's my question. That legacy of the rate capping legislation, which as a councillor I was subjected to, is at the root of the incentive payment to hold council tax steady. The amount of council tax substitution money, about 70 mil, was in my calculation back in 2007, roughly in the order of what a court would have considered to be a reasonable increase, roughly 3 per cent. I don't favour a statutory cap. I think it can be achieved in other ways. Personally, I wouldn't seek to do it, but I think it will be and can be achieved in other ways. It's an extremely messy exercise. Last time, around 20 years ago, it was hard work for everybody involved. The other side of the coin, though, is that if you don't have open, transparent mechanisms, you have negotiations between the likes of COSLA and the Government that go on for a lot of time. We don't know what's necessarily going on in those negotiations. There's a lack of that transparent formality, I suppose. I'm not saying that either outcome is necessarily the desirable one, but a more open way of dealing with that would be better than a less open one. Elaine Smith, for the final question of the session. Thank you very much, convener. We are looking at the statutory instruments, which one of my colleagues pointed out is to tweak the bands. That is what we really have to report on at the end of the day, as a committee. It would be hard, personally, to argue against doing that in terms of even your evidence today. Everyone said that it's slightly a fairer way to do things. However, I suppose that the final question for me would be that Professor Kerr mentioned in the submission that the Scottish Government proposals for changes to council tax do not significantly address the concerns that Scotland's local property tax is raised by the commission on local tax reform. Do you have an opinion on why, having had the commission on local tax reform, the Government has decided not to implement that and has decided and said to tweak? I'm asking about opinion, if you understand that. I have my views on it, but I don't have an opinion on it. Professor Gibb, do you have a view on an opinion? Only what I said in the written evidence, so I wouldn't need to repeat that. It might be worth noting, as we draw this session to an end, that there's a debate tomorrow afternoon in the Scottish Parliament on local authority funding. I suspect that this will run and run, and this isn't the end point of what's going to happen.  I thank all three of you for coming along this morning. It's very helpful in relation to our consideration of the statutory instrument before us, and we'll close that particular evidence session there and we'll suspend briefly to get the next panel of witnesses ready. Thank you. Okay, good morning, everyone, and welcome back. We continue agenda item 1 this morning, which is the Board of Legislations taking evidence on the council tax substitution of proportion Scotland order 2016, and we now move to our second panel of witnesses. So can I welcome five witnesses this morning, Joan Houston, the Scottish Association President and Assessor for Lothian Valuation Board, Liz Robertson, Chair Scottish Revenues and Benefits Forum and Service Manager Revenues for Fife Council, David Thomason, Scottish Assessors Association, David Milchewish, Director of the Scottish Property Federation and Don Peebles Head of SIPFA Scotland. Thank you all of you for coming along this morning. It's been indicated that three of you will make some short opening statements to set the scene before we move to questions, and I hope that I've got this right. I'll just take them in the order that was intimated to myself. Joan Houston, I think that you're making the first opening statement. Thank you. Good morning all. Thy IRV welcomes the opportunity to attend this evidence session. The institute is the only professional body in the United Kingdom which specialises in the law and practice of local authority revenues and local taxation together with appeals, reliefs and benefits which support these processes. It is members within both the public and the private sector, including ratepayers and their agents. Institute members are engaged in property valuation, local taxation collection, the appeals process, advising and representing ratepayers and financial management within local government. The institute represents professional interests of its members who work within this very broad church. We have a very well supported and dynamic Scottish Association of the Institute which seeks to affect development and change within the institute's professional sphere of interest through dialogue with key stakeholders. The institute acts as a consultative body for government and takes an active part in consultations, evidence sessions and dialogue as required and appropriate. Thy IRV Scotland note that the majority of the respondents to the 2015 commission on local tax reform considered that the current council tax system was not fit for purpose in its present state. The main recommendation from the commission was that the present council tax system must end and the predominant view was that a wholesale revaluation of council tax was required and ideally based on regular and frequent updated valuations. It was further concluded that any system should be seen as fair and acceptable to the public and more progressive than the existing council tax. It is with this clear view in mind that the answers to the questions raised in the current consultation have been considered by us. Thank you for inviting the Scottish Property Federation to give evidence today. We are an industry body, so we have a wide range of corporate members, so there will be developers, there will be investors, professional advisors and so forth, some of whom were involved in the commission for local tax reform along with some members of this committee. Our interest principally in council tax reform is firstly that our members will be involved across the range of property product, residential, commercial and so forth, so it is to the people who ultimately will occupy and be paying the tax. Secondly, there is a wider question which begs about local authority funding. A lot of our members will work closely with local authorities in the pursuit of economic development, planning, building standards and so forth, and there is a general feeling that there is a resource issue in the local authority sector from our perspective. We have outlaid our main points of what we see in council tax reform. I think that we were more for reform, not too dissimilar to what the Government has proposed, but we do agree with some of the comments that Jones just made that we think that if you want a fair tax base, a wholesale revaluation is appropriate, especially given that we are a quarter of a century on from the last one, in order to reflect the modern residential market. Good morning. Thank you very much for the opportunity to come along today to talk about local tax. Many of us have been here before having discussions on local taxation, and I look forward to continuing that this morning with the committee. I might be picking up first of all from what was said in the previous session and also in the absence of a written submission from me. I think that it is probably important to appreciate that this is the first phase of reform. When the Scottish Government made an announcement earlier this year, it made it clear that there was going to be modification to council tax, but that was actually going to be supplemented by an initiative that was going to link the new income tax powers to local government funding, which was going to be in the form of an asignation of income tax. We await details on that, and that is still to be before forthcoming. I think that wider context is important because the commission on local tax reform, which has already been mentioned and which I had the pleasure of serving on, concluded that no single tax instrument could deliver fairness. It is crucial that considering the statutory instrument this morning that we think of the wider possibilities and the issues that will be coming down the line. However, to actually commence the discussion this morning, I thought that it might be useful to set out what SIPFA has previously said to the commission on local tax reform. The paper that we submitted to the commission last year can, in effect, be distilled into three fundamental points. The first one being that the view of SIPFA that local tax should be set in it should be raised locally without any interference from government centrally. That is a significant point and principle that we have adhered to. Secondly, we actually think that the base for tax, the tax base, should be current. What that means in practicality for a property-based taxation is that it should be re-evaluation on an on-going basis. Again, that has already been mentioned to and no doubt will come to that as well. Thirdly, we actually thought that there was scope to enhance accountability. There were two issues associated with that. On a practical level, we thought that there was opportunity to disengage the council tax bill from the bill for Scottish Water. We were not saying that councils should stop collecting monies on behalf of Scottish Water, but there was confusion and there continues to be confusion in the eyes of the public about the bill that they receive. Secondly, perhaps more fundamentally, as part of that third point, there was opportunity, and I would like to think that that opportunity can still be taken to think about a wider range of discretionary tax powers for local government. The one that is usually referred to and perhaps the one that seizes to identify with is a tourist tax. That would be useful to consider as well. If I contrast those three points to what came through in the statutory instrument, what I do notice is that the phrase has been removed, which I think that everybody actually welcomed, but it has introduced a limit of 3 per cent. Already we are hearing the word cap mentioned, and I have heard that mentioned this morning. Secondly, there is no indication of re-evaluation, which indicates to me that the current 1991 base will be maintained. Thirdly, a mechanism for the use of local resources for national policy purposes. That feels different to me, because it is an area in which we have not been at all by understanding. It is crucial to come back to my final comment that the commission concluded that local tax should be a contribution to the general funding of local authorities. What that does, perhaps even inadvertently, is to assign specific monies to almost the characteristics of a charge for services in this case education. However, my key point that I want to get across, convener, is that it is important to consider that there is going to be a wider set of reforms that are coming down the line. We do not have sight of what those are at the moment, and I also try to focus on what is a modest set of reforms at this stage. The risk in focusing only on the statutory instrument is that we end up having a modest discussion, and there are wider and bigger issues to consider going forward. For all our witnesses, for giving their opening statements, we will move shortly to questions from other members. I am sure that they want to raise much of what you have said in your opening statements there. Can I start with a straightforward question? Is the proposals a set of the Scottish Government fairer than the current situation? If so, in what ways is it fairer? In our submission, we said to you that the three-to-one proportionate cap that was imposed in the 1990s was way past itself by data needed to go. In that sense, it is a step towards a fairer spread of burden. We also said that the bandings could be added to with another couple of bands at the higher end just to reflect better the market. It is a step in the direction of making a fairer and more proportionate system. I do not think that we would go much further than that. I would like to add to that. Mr Orkson? The answer is yes. It is fairer notwithstanding the issues without a revaluation that is a crux to this. If you want a taxation to be properly fair, it should reflect what a property's value is now, not what it was 25 years ago. Overall, yes, the thesis of higher-band properties should pay more. Do you think that that is fairer? Before we move on, I do not feel that every witness has to answer every question that we would be hearing all day, but does anyone else want to add to that? We probably all concur that it is less regressive, whether it is much fairer or debatable, but we cannot get away from the fact that the people in the highest-banded houses will pay more and that is appropriate. We are going to move on to revaluation from my fellow MSP colleagues. I want to cover a couple of bases. First, in relation to fairness, do you want to make any comment that you do not have to in relation to the council tax reduction scheme that is proposed or how the money is intended to be spent? Just so that we can clear that bit up and then move on to the next set of questions. Any comments in relation to that? Obviously, I have been an expert on council tax reduction. The first thing to make clear is that everybody who is currently receiving council tax reduction will not be protected from the changes to the ratios because of the way that the scheme works. All of the lowest-income households will receive protection. If everything else is equal, if your council tax goes up, your council tax reduction goes up, so they are protected. The 54,000 households that I have made in mass admission that it is the estimate for the Scottish Government, there will be a re-billing exercise required. We probably could accept applications in advance, but how do you get that out there? Obviously, the easiest way to do that is to put the details along with your council tax bill. That is one of the easiest ways to do that. It would not cost that much more to put an extra sheet of paper in. I wish to apply my circumstances. What the professors were saying earlier on, it is very easy to produce a ready rechner because your income is going to be at this level, you will qualify and you will not get the ratio. If you wish to apply, please stick this box sign in to send it back to us and then we will take the necessary steps to contact you. Sorry to show my eglums, a ready rechner, could you say a little bit more about what that actually is? Just basically, if you are affected by the increase in charge, I think we have the technology where we could actually target that to band E to H properties, so we could identify them in advance for annual billing and therefore put an insert with that and say, here is a ready rechner. If your income is this level, you could be exempt from this by completing this form. I think that is quite straightforward. Would that be 32 versions of that across Scotland, or would there be a one pro-forma that is in every council tax bill across Scotland? How would that work? Times 32 seems pretty bureaucratic. Is that just how it has to work as council taxes is organised locally? My view is that it should actually be done by the Scottish Government and given to councils to put in with their bills. But as you are aware, yes, there are 32 different council tax bills that go out at the moment, each in its own format, which is maybe not ideal. We have spoken a lot about revaluation, and most of the witnesses seem to favour a national revaluation. Can I just kick off with a practical question based on your professional expertise? How difficult would that be to carry out nationally, and how long would it take? David Thompson. I should speak on behalf of the association and that one is the assessors that will do the job. That is a chicken and egg question to some extent, so you will excuse what might appear to be a fudge dancer. The length of time and the difficulty would very much depend on the form. We have already heard in the earlier session discussion on banded revaluations or discrete valuation revaluations. We may come to it later, but I do not necessarily see them as absolutely distinct and apart. However, if assessors are required to value each individual property to a more or less exact value, that is a far more difficult task than doing a banded exercise. It is quite clear that a banded exercise would take less time and less resource. Our experience of completing a revaluation is that it has taken two to three years to do a complete national revaluation. There have been exercises undertaken during the commission's considerations, whereby we have already heard mentioned this morning that some statistical elements might be introduced to the system. Our experience is not in having used such statistical models, however, there is scope there to consider them, either for implementation within assessors' offices or perhaps in partnership with the academic bodies that have been involved in those property analyses to date. Do you want to go back on that? Well, is there anyone else who wants to answer that? Yes, well, you said two to three years. Two to three years. It could be done in probably shorter time with additional mass appraisal-type resource that obviously has perhaps funding or partnership implications. What explained that mass appraisal? Mass appraisal is the term used generally in the industry for systems whereby a whole bunch of data, a whole batch of data, physical attributes and sales data are entered into a system, and a series of algorithms are derived and applied to apply at least an initial valuation to properties that perhaps in themselves do not have sales evidence. If the data is captured and used properly, that will be able to speed up the valuation process for a significant proportion of the property portfolio across the country. As it stands, assessors currently have elements of mass appraisal in most of their internal systems, however, there are, and we have heard that it is spoken about earlier this morning, advances in these appraisal systems, new algorithms, new systems, and these could be investigated as to see how much use they could be to assist with a national revaluation.  Dodd Peebles, are you wanting to add to that, convener? Yes, at that point, the question was on the cost to maybe revert to the evidence that was taken by the commission on local tax reform. The range of costs that were indicated by witnesses to the commission was from £5.5 million to around £8.5 million, which was the upper figure that was quoted. Most witnesses to the commission indicated that, as far as technology was concerned, it now exists to enable that to supplement what David said. There was no question that it could not be done. The additional point that we have made, convener, is that at the moment all local authorities are required to value their social housing stock, so a valued social housing stock sits on council balance sheets at the moment. To a large extent, we are talking about private dwellings that are out there. I have referred the committee to the work that the commission undertook on revaluation, which was based on a sample of eight local authorities and the figures that emerged to make for interesting reading. It concluded that, politically, there would be a significant challenge in going forward with revaluation, but as far as technology and cost was concerned, it certainly achieves it. Any other witnesses who want to come in on that? I think that we have to bear in mind that, obviously, revaluation, we would dearly love to see that. I said in my submission that, at the first stage, altering the amount that we are paying per band is a good option to start with. If we had a planned timetable, that would be by far the best. There are things that we could be doing in the interim. One of my other submissions was about picking up alterations to properties. They have been grossly extended for 23 years and they are still paying in the band the value of their original house. That kind of stuff could might be brought in one year and then the following year you bring in a revaluation, all the time of building the data and going forward. Obviously, we have given, our evidence was given from various different sources on the discrete values. Northern Ireland did it to discrete value, but they were actually valuing a very highly increasing property market at that point in time, where the properties, by the time the date of their tone date, the date when their valuation was taking effect and the notices going out two years later, the properties had actually increased by 50 per cent. They are very little in a way of appeals because it was such a—people all thought, oh, I am undervalued, I want appeal, but people do not realise that it is based in two years earlier. If we are going down a revaluation route, again, I would say the same as Dawn, look at the previous submissions that came out from the last consultation because I think there was a lot of evidence based on that. David Melhios, do you want to add? Just very quickly, I do think the evidence is there and can be done quickly. The register of Scotland produced mass sales evidence data on a monthly basis across the country, broken down by local authority level. They can do that according to different bans. That kind of data could greatly assist the sort of mass appraisal techniques that David was referring to. I think the possibilities are certainly there. If you are in a situation where nearly 60 per cent of properties are in the wrong band, either upwards or downwards, then it is just a situation that should not be allowed to continue. Mr Dawkinson, do you want to add? Not being an expert in the field, but there are other countries that use self-assessment. They just return the form and say, what is the value of my property, and that is used. Obviously, if you are self-assessing, if you put it too low, that is the value that gets displayed when you have come to sell the property. It may be something that the committee would want to consider. Okay. A couple of supplementaries in relation to this. Elaine Smith and then Kenneth Gibson. Thanks. It's actually back to what David Thomson said at the beginning. I think that Mr Melgios takes us back to that. You said, if I heard you correctly, that it would be more difficult to do a full assessment of each property, but it's easier to do a banding assessment. Can you explain how you could put properties into bands if there wasn't a full property assessment? As we did in 1992 and 1993, almost a first pass valuation is sufficient in most cases for bands, for instance, a house that is broadly between £140,000 and £180,000 fits nicely into a band. You don't need to spend any more time on that, whereas if we have to pin down, is that £150,000 or £155,000, then it would take some extra effort. The information that is provided to the taxpayer might also have to take a different form, because it might have to provide more justification for such an exact valuation. However, Mr Melgios seemed to say that a lot of that information is already there, so it might not be too difficult to evaluate housing. Take with some caution external people who are not necessarily administrators exaggerating the ease of valuing property. As I think it was already alluded to in the first session this morning, what someone sees as £140,000 might, someone else might see it as £150,000 and someone else might see it as £155,000. The market is not a science, so going back to the evidence that was presented to the commission, the statistical and mass appraisal systems were identified as being useful in a lot of instances, but they did not address large chunks of the property market or large chunks of geographical area. An intelligence needs to be overlaid on such a simple statistical modelling. Anyone else wants to add to that? Thank you very much, convener. Given what the academic said, I think that you have been very diplomatic in your response to Mr Thomson. I was quite shocked when you said that there would be two to three years to do a complete evaluation. Is that about the lack of resources and staff? Were you talking about individual houses or bandings there? If it was bandings, how long would it take to do a complete evaluation? Lastly, I suggested in the previous session that a five-year rolling average of valuations would reduce volatility. The academic seems to think so, but what is your professional view? Turn it to the first question, which was—do you remain me, sorry? I am sorry. Basically, you said two to three years to complete evaluation. The association has always taken a view that a conventional revaluation to a bandage system would take approximately two years. That, again, depends on the breadth of the bands, and so on and so forth. However, two years is a reasonable estimate of how it would take—remembering, of course, that a valuation has to be completed in advance of billing and the current legislation requires draft values to be laid approximately six months before the bills go out. The process itself has some inherent time in it. A bandage system, we have always suggested that we could complete that in two years. Discreet one may take us a bit longer. Because we have never done that and because we are not sure how useful other tools would be, I would be reluctant to put a hard and fast figure on it, but I would suggest that it would take two years in excess. That is because of staff and resources? There is just a finite time in completing the process. There are only a number—certain number—of skilled failures across Scotland, whether they are employed in assessor's offices or not. There is a fixed element or fixed number of surveyors who you would presumably want to be signing off values. However, as I said, there are time lags in the system. For instance, a house sale today will not be public for two to three months. That then has to be transferred to the assessors for them to start to analyse that. Even if you are trying to value a point in time, you will certainly want to see a breadth of sales evidence on both sides of that. It is helpful to have a time lag after the point of valuation in which to arrive at your values. Is that an argument for rolling averages? If you bring in a revaluation at some point in the future, would rolling averages and tender costs help if that was built into the system? For me, that is a completely separate question. I go back to the point that academics made, the revaluation set your base. How you charge on that base are matters for politics or for finance officers, but the revaluation, which is what the assessors do, only establishes the base. To do that, a rolling annual revaluation, in my view, would not be as simplistic as was suggested earlier. That said, if the systems were put in place and the experience were to begin, the process might be implemented over a period. A charging mechanism using valuations over five years is a completely different structural model, which I would not have any expertise in. Those are the witnesses that are not assessors. Would you want to make any comments on that? I am quite happy that there is a bad link. It would never be straightforward in the point of time, but if you never start, you will never redress the situation of coming towards two-thirds of properties in Scotland and being charged on the wrong basis. I think that the registered stuff would get you somewhere down the line and give you a start. I was not thinking of anything other than a bandit system, to be honest. Five years were suggested or rolling evaluations. I am not sure that you would need to do residential revaluations as frequently as you have to do the commercial business rates equivalent. I think that every 10 years would be fine, but I think that the problem is that if you do not start, you have this recurring form. Most political parties in this room have been in government somewhere in Britain at some stage, to my knowledge. Apart from the distinctive Northern Irish situation, only Wales has done this. It seems to be a particular nettle that there is an unwillingness to grasp, but I think that the problem is only going to get worse the longer we put it off. Anyone else want to add to that? Mr Robertson, please follow up on Mr Peebles. I think that there is a joint suggestion about revaluing just the properties that have been altered as one that could be of further consideration. I think that those records would be easy to identify from planning permission and building warrants. It would take a large proportion of the cases where there would be a significant change, i.e. one, two or even three bands. That was felt from when they did it in Wales in 2006-07. That is just maybe a word of consideration from my and before I take in Mr Peebles, John, you were a name check there. Do you want to add anything before I go to Mr Peebles? I was a bit surprised when Liz comes in with something to do with valuation, but it shocks me all the time. The revaluation, we could, don't get me wrong, we do have all the information from Regitors Scotland. We have married up sale prices to houses, so we have that information already. We do have all the building warrants and planning permissions, but what we don't do, we don't go inside the houses because we don't have a statutory duty to survey those properties to all the bands. We can only look at them once a house is sold. Yes, we have all that information. Yes, we could do it. If we got our records by implementing the alterations first, as one of my suggestions, we would help us to get our records correct at that point in time and get the reaction out of people through the appeals system, is that correct? We would then move forward to a full revaluation. In a second, Mr Gibson and Mr Peebles, first. I think that we were just building on the point that David was making, which is absolutely right, is that what we are actually trying to do is to identify the tax base. I think that it's very very easy, and I've seen this in discussion, to actually get bogged down in the complexities of valuation and revaluation, not that they're actually unimportant, but we're trying to ascertain as easily and as cost-effective as we can what the tax base is to enable us to levy a local tax, and that's why we're actually undertaking that, and no more than that. Mr Gibson's point about would volatility be smoothed out? The answer, I think, is absolutely. You can see where we are with, we're in about 25 years of no movement whatsoever. We've been looking at huge volatility before to actually move to instantly revalued properties, but that also brings me to a report that a previous version of the committee issued in 2002, one of the, as I said earlier, many reviews of council tax, and it's set out in the 2002 report very clearly the legislative position in relation to revaluation, and it referred to the fact that there's actually two options open to Scottish ministers. One is the power to change the ratio between bands, which we're looking at at the moment, and secondly, the power to substitute other valuation bands. The committee's report made the point quite clearly that if you introduce or substitute valuation bands, that would automatically trigger a full revaluation, and that's set out quite clearly in the 2002 report. The notification to the proposals that we're looking at today is the first of those, which means that there doesn't have to automatically be a full revaluation. It's just that Les Roberts and Joan Hutan seem to suggest that perhaps additional council tax should be levied on house improvements. I mean, I thought the whole point that that wasn't brought in when the system was brought in was so as not to disincentivise people from actually improving their property. I do think that it's very helpful if you're saying to people, if you improve your house, you're going to have to pay an extra few hundred quid a year in council tax for having done that. Surely that would have a negative effect in terms of improving the quality of our housing per se? Yes, I do answer that within the submission that I put in. I know, but for the public record? Yes, for the public record. We are actually looking at, when the legislation was brought in and I totally agree, we were wanting to encourage people to improve their houses. Under the old domestic rating system, you put central heating into your house, we increased your rateable value, so it was a good decision. We fully supported this decision, but it was brought in on a basis that it was fully expected to have continual revaliations. Five-yearly has always been the norm since 1956. I can totally accept what David said, maybe housing could be temporary tenures, but it was expected to be regular revaliations. It wasn't meant to put you in the wrong band for 23 years. I know Mr Thomson wants to come in with Liz Roberts and you were name checked as well. Do you want to add anything to that before you take Mr Thomson in? It has not been a value or radius like it comes down to fairness. If you are paying local taxes based on a value of a property and your value of your property goes up, you should be paying, make a greater contribution. With my house, but if I did, I would be pretty missed if I had to pay additional taxation as a result of doing it. The political dangers, both sides of defence and revaling, it is not a cost free option either way. Mr Thomson, do you want to perhaps pick up on that last point? My house has been extended and I would fully expect my property tax to be adjusted accordingly. However, I would reiterate John's point and just merely illustrate it by a simple example of a small button bend in rural Argyllshir in 1991 might have a next to no value, but a massively extended button bend in rural Argyllshir in 2016 with a swimming pool and with solar. You can take this to the ridiculous. The example illustrates the absurdity of the current situation in that there are not insignificant numbers of houses that have substantially changed in their nature and it seems only reasonable in those circumstances that some redress is given. The assessor association has always understood the incentive element to not taxing improvements. We have suggested that there could be a five-year delay until a next revaluation. It could be even the start of the next financial year to allow people to plan. There are myriad ways of implementing a system whereby someone might move to the correct band in due course without being deemed to be an immediate punishment or penalty for property improvement. At some point, we will have to be away from revaluation on another area, but Mr Peebles, do you want to add something? I think that the type of exchange that I have heard is not untypical when we talk about council tax. I am sure that all of us have been involved in that at some point or another. I think that it is important to remind ourselves, unless you have already done so, and if you have, I apologise, that the council tax itself is not a perfect system, so we cannot have a perfect discussion about it. History tells us that it was a rapid solution to what was then a political issue. It was a tax that was fairly hastily designed at a point in time. It has worked for more than 20 years, but it was a compromise between a property-based system and maintenance of a personal-based taxation system. I think that that has been compounded over the years by the type of issue that we have just heard about as well as revaluation as well. I will bring in Andy Gimwy, second. The statuionist before us does not refer to revaluation, but, obviously, for many people that is the elephant in the room in relation to taking the local taxation base forward in the fairest possible way. That is not to be considered by the Scottish Government, but despite that, do you think that there is a case for the Scottish Government to work with its various partners to see what a revaluation system would look like? Start looking at potential structures and how to do that, and then it becomes a political decision when to implement that. Most importantly, I suppose, when we said to the last witness panel, whatever that new structure looks like should be designed in such a way that, in five years or 10 years' time, we are not having the exact same argument. You future proof it so that, for as long as there is council tax for the next 10, 20 or 30 years, the structured statutory system of revaluation should just be in place and we move on, because we are not scrutinising revaluation here for the sake of the order or the statutory instrument, but we can still draw things to the attention of the Government. What would you like us to draw to the attention of the Government in relation to revaluation, I suppose, including that potential suggestion? The key thing that we would all probably ask you to do is to go and look at the last consultation report that came out. It gave very clear guidelines, and that was a cross-party committee that was on that group. They have managed through very difficult waters, as in this committee here today, to steer a course through it but come up with a reasoned report at the end of the day and the reasoned proposals of what should actually take place. I think the other thing is, your revaluations, it has to be in statute, whether you put it in that it's every five years, seven years, ten years, but if you have it there, you can delay it as you did with the commercial revaluation, but if you don't have something in, no Government will ever actually take that fated step of bringing in a revaluation, because one by the time you actually decide you're going to do it and it comes into place, you could have moved out of Government or whatever it might well be, but it can cause a lot of angst, and that's why you need good cross-party support to go forward. Okay, any additional comments in relation to that? Mr Thompson? I reiterate that in respect of a comment joined me earlier. Certainly, as administrators, it would be helpful for us to see this as a step in a scheduled path to something new. I think that it would be an opportunity missed if there wasn't a greater reaction to the commission's report, and it might even be more publicly acceptable to see steps towards what might be perceived by the public, or otherwise, as a more progressive and fair tax. A clear timetable for the way forward to a more robust system would be very welcomed. Okay, any other comments? Any other comments to that, Mr Peebles? I would agree with that suggestion in the comments just made by David and Joan, and I think that there are other examples from other countries of not too dissimilar size on some of the techniques that David was outlining earlier, which might be worth looking at by the Scottish Government. Okay, that was, of course, Mr Peebles. Based on the evidence that was received by the Commission on Local Tax Reform, there were many professional groups and bodies and individuals who gave evidence almost to an individual and to a body. They were quite clear that there was a theoretical argument for re-vaccination, and I think that it's unarguable when I think that everybody on this panel witnesses today would actually agree with that, whilst there were some debate on the technicalities and the technology that would be required. The ability to do so was not in doubt, it was clear that we could actually do that. The barriers, however, to re-evaluation were quite clearly political. It was the simple element that there would be a significant tax rise for individuals who had not seen a tax rise for a considerable period, and clearly that's not necessarily attractive to any political party, notwithstanding the cross-party consensus that referred to it earlier. The one technical point that we might want to make, convener, is to refer to the report that I mentioned previously, which specified that in the committee's 2002 report that Scottish ministers currently have relevant powers to trigger a re-evaluation using secondary, not primary legislation, but secondary legislation by making an order under section 74 3b of the local government finance act 1992 for the record. Sorry to be technical, but it's important to get across. Okay, thank you, Mr Robertson. And just to be just as technical, if you were to have a re-evaluation under section 80 of the same act, you could bring in a transitional relief scheme. So you could actually smooth out any anomalies as they did in Wales, and it was a two or three year scheme, depending on how many bands you went up. Can I just check? Is it perhaps understandable that we're not looking at re-evaluation at the moment, given the fact that an additional £100 million per year is going to be raised from council tax on the higher bands, and the council tax freeze is ending and it's looking most local authorities will put in a 3% increase in top of that as well to move to re-evaluation now at the same time? Would that just maybe be a bit just too much all at the one time? It's not a reason not to do it, but is it perhaps reasonable in reflection to hold back slightly in relation to that? Perhaps that's a politician talking rather than a professional who just, you know, who just have to make it happen. I might answer that that would be a reasonable step if there was a road map into the future. If we knew that there was a re-evaluation coming, maybe we would be more prepared and it could happen more quickly. It would take less additional resource. So, yes, it's not unreasonable for Governments to take steps as a progression towards something that's probably more palatable around. Since the road map you want to see when it's coming. Going back to the evidence that was given this morning, there was some concern over the confusion of adding the 3% addition as well as the proportion changes. So, if you were to add a re-evaluation on top of that, then there would certainly be lack of clarity. I should perhaps just add that most international property federations experts or otherwise would say that a re-evaluation should always be considered in terms of neutrality of finance. Most re-evaluations redistribute, they don't increase or decrease the tax take. It's been very patient. Any other comments before we go to Mr Wightman for his question? No, okay, Mr Wightman. Thank you, convener. Yes, as was become clear, this order and its accompanying order are going to introduce for the first time changes that we haven't seen since 1993 when counter-tax was introduced. The fact that the multiplier is being increased for 2017-18, the fact that new counter-tax reduction eligibility criteria are being introduced and the fact that the counter-tax rate itself councils are to be given more latitude in that is all going to happen with a fairly short space of time between now and next April. To what extent do you think that the public need to be engaged and informed and made aware of these changes because I'm already getting constituents writing to me saying that they've got properties in band E but their property is worth less than properties in band B and everyone's just going on to zoopl and they can find all this stuff and of course they're lodging appeals and that appeal will get nowhere. So what kind of public information and awareness do you think we need to do about this and do you anticipate any problems or issues arising as a result of people potentially appealing their banding when they do see that they are going to be faced with higher bills? This is one of our concerns. Although there has been the newspaper, the media reports on the fact that this is actually happening, public don't actually realise it until their bill hits the floor and that's when we will expect to get a lot of appeals in. It was the same Martin Lewis when he had his tranchef out of media attacks on the council tax system and we literally had tens of thousands of appeals coming in through the door. All of them invalid or 99% of them invalid and what this does it takes up an awful lot of time both of public resource time and actually dealing with this but apart from that it's actually time in going to the the valuation appeal committees which is the legal cost involved in that and it's taken up the time of lay people that's sitting those panels so we do expect a lot of appeals and what I would actually urge the Scottish Government to do is to try and put out good quality community communications on this press television whatever you can do to actually say there is no right of appeal on this this is purely a payment measure there is no right of appeal because it will people who who's back who's if you see their payment going up quite considerably and again it comes back to the house next door that's not been extended and it's just going to aggravate the differential between two houses that are quite different are in the same band and there will be a lot of discontent from the rate peers out there okay anyone wants to add to that I would agree with that entirely and I think it will be a shock I mean I've been surprised I mean local authority officials around the country have been saying they've been surprised at how how few people have been coming forwards that I so I think that probably is a lack of realisation just at this moment in time about the changes to bills that are going to happen but yes changes of over 20% if you go right to the top of the the the the banding system I think are inevitably going to lead to a fair amount of public feedback but the the government has a critical communications as do local authorities individually on this but it is unfortunately another facet of leaving it be for quite so long you always want to add to that okay and do you want to come back in it's just I'm attracted to the notion of a roadmap because the commission identified a lot of flaws with the council tax such that it recommended that it be ended but to the effect that it's not being ended that there are still those flaws and one which you identified we talked about earlier was the people who do you know redevelopments I mean it's my understanding that I mean an order under section 87 of the 92 act could be brought forward to perhaps deal with that to make those orders to make those valuations be done a little bit more promptly because I'm having another considering right to me saying that they've just bought a property which they looked at it was in ban B or C I think what they didn't realise was that it had been substantially altered it was through the 80s and stuff and then they were lumped with a much much higher council tax bill which they felt was very unfair because they didn't know that was going to happen and the owners ended up with a windfall because they've sold a property that appears to be liable to a a ban B or C payment and therefore have got a higher capital payment so is it possible to is that one of the things we could do in the roadmap to sort that one out by order most definitely I think increasing bans for those that are altered and yeah I totally accepted the point of view yes we shouldn't be hampering people from altering the houses but some of these are substantial substantial alterations and I think we we do need to try and start addressing this as soon as possible lost but I was going to come on to say that I have just had to do that as one step on the way to reevaluation would take possibly take some time out of the reevaluation as Joan's already alluded to we don't have the powers necessarily to capture the change information just now but if we were given the power to amend these bans accordingly we would capture that information as a precursor to a reevaluation so and as part of a roadmap dealing with extended properties maybe one step along the way to a full reevaluation can I just say what I remember I was going to say within this particular where we only increase a band when it is subsequently sold so there is even a slightly delay in that the time we get the information from the register of Scotland about the sale it's two or three months later we increase the band so you're probably four months in the house before you're you're actually getting hit with this this information but we did actually lobby the people when they were doing the the home report to say that that should have been included in the home report notification about and it was it was it wasn't taken on board to that sorry miss my hoos did you want to add sorry can it you okay andy can you maybe ask so those staying in band e to h houses will see you see an increase in their their council tax bill many of those will be owner occupy houses within a private commercial housing market could there be any implications for the market and the increase for bands e to h is that a consideration I would have thought that the lbt t situation was a slightly bigger influence on this I mean we remember it is a charge that's been frozen for a very long time now I think around about nine years so at the very ultimate level I think the difference will be £500 from the band charge that will be very very high so I mean I'm not not saying it won't be a factor for potential home buyers in terms of their ongoing annual occupancy costs but at this stage I would doubt a material change with the reforms you've got in front of you okay thank you anyone else on in relation to that okay no member has indicated the wish another question now would be your opportunity we've got a little bit of time left if it's okay convener just about the whole appeals system and whether you think that that should be reformed as you'll know that people people can't appeal if after they've moved in to a property after six months and so you've got a lot of people who are who are in the wrong bands but they try and appeal and they're told you you can't do you think that that should be changed it's common assessor's policy that even where someone may submit an invalid appeal that they will check the banding and the assessor has powers to reduce the banding if he believes an error has been made so there are people who despite invalid appeals after their appeals are met the other bands amended where they are quite clearly wrong and the other side is a new occupier has six months in which to make an appeal some might see that as a perfectly reasonable time for someone to understand such a significant outlay and make an appeal that all bands are publicly available new occupiers are notified of the band and there's a national website which people can check all the bandings so six months may be deemed a reasonable time to allow someone to appeal where that Mr Thompson and very often they're not and they may only realise years down the line that this becomes an issue for them able to answer better but I understood that bills I gave people a brief outline of their appeal rights yeah on the the structure requirements of content and to my notice the appeal rights to appeal against your valuation are stated again it's how many people read it and that's the you've got a council tax bill you've got a the back of the bill that's full of notes discounts exemptions CTR appeals office opening times that all that has to go in the bill so yeah I've totally set your point however what I would add is what David said there was maybe when you're considering a technical adjustment is to stop the assessor going back to 1993 when he makes a mistake it has an impact on council tax council's income that if an assessor finds one property in a street it might be a council street that's actually bandied wrong and that's identified as an error that whole street will get rebanded and to subsequently go back to 1993 which means that councils will have to keep records for 1993 we then have all the administration will have to recalculate council tax benefit and council tax reduction and then we'll have to try and find people who have maybe gone away that we're due money back to so it is it's an it is an administrative problem that never was picked up in the regulations almost apologies mr Robertson because I've identified in my constituency areas where households were in the wrong band and obviously mr Thomson said even if the six month has gone once the assessor's departments are where they come in accuracy in the banding they will then go and look at it the health warning with that of course is sometimes it increases everyone's band rather reduces everyone's band as well so for any of the politicians they're going to be very careful that you know your stuff before you go and you go and do that mr Gibson did you want to come in? I mean some people don't like their bands being reduced if they think if they're trying to sell a property because they think it will reduce the value of the property but I think the issue which Graham refers to is when somebody finds it a year later everyone else in the streets paying less than them you know it's not that they don't acknowledge what's actually in demand notice it's just that they suddenly find out everyone else is paying for what they perceive to be the same house but obviously you know that's because of the way the system changes in terms of people moving in and buying houses etc etc but people just perceive that you know that that person across those get exact same houses mean that they're paying a dean and paying a year whatever and that's really when you get the kind of issues that Graham's referred to I think. In significant amounts of time addressing those very issues despite the lack of appeal rights if the person has brought it to her attention so there are remedies if indeed there is an error where there's a difference of opinion that is where we do have a problem. I thought we were almost finished but Mr White with it, yes? You're encouraging some further contribution. No just a brief follow-up I mean just coming back to my question that Joan answered about appeals and the volume etc it's my understanding that the public have a statutory right to this appeal there's nothing we can do to limit the number of people who are entitled to appeal all we can do is do a job of persuasion to persuade them that it's not worth their while doing but because it's so easy to do for them not for you to deal with it may not be that effective but that's correct and they have a statutory right. They have a right of what we call in in council tax language you submit a proposal anybody can submit a proposal and then we just deem whether it's it's validly made or invalidly made of invalidly made it just it slides in to go to the the field committee if we can't convince the person but I think where we come from we can't turn around and say that you can't go to a committee that's that's because everybody has a right to a fair appeal system so all we can really do is say it's invalidly made because it's out with the time or it's or it doesn't meet the particular regulations but if it meets all the regulations then everybody they will have their appeal heard by the the valuation appeal committee but if it's an invalid appeal it's a it's quite it's a long drawn out process and they will go before a committee and expect to have their voice heard and really many of the committees will just close them down very quickly because the committee cannot do anything with it either you know if it's an invalid appeal it just has to close off okay um I think we're we're almost there now we'll get a few minutes left if any of the witnesses wants to put anything on the public record before we close this particular evidence session there'll be some amount of time to let you do that of course anything Mr Robertson the one thing that I think it was alluded to earlier was there's been no mention and we've still haven't had any detail of what the the proposal for the Scottish Government Scottish Water are going to do with water charges obviously that will have a wee bill one bill it's still unclear whether we're going to increase the water charges per the ratio and I think I raised that in my submission that needs to clarify very shortly that's helpful thanks for putting that on the on the public record any other don't feel the need to but now your opportunity if there's something you you want to say okay and there's not can I thank all of you for your time this morning now this afternoon of course and helping the committee consider the statute and some place before us by the Scottish Government we've got ongoing evidence sessions in relation to this in the weeks ahead but for the moment thank you everyone for coming along and we now move into private session thank you