Scots to set council tax rates for three years at a time

The Scottish executive has called on local authorities to offer stability in council tax rates in return for greater freedom in setting council tax levels.

The executive has promised to scrap spending guidelines for councils and replace them with three-year grant allocations.

The guidelines set upper limits on council spending, and their abolition has been welcomed by Scottish authorities. In return, councils will have to set their council tax levels over a three year period. The two moves are intended to ensure greater stability for local authorities and council tax payers.

However, the executive has warned that it expects authorities to show restraint in setting their council tax and ministers will retain the power to cap spending.

Scottish finance and local government minister Angus MacKay said: "This will give councils the resources, the stability and the flexibility they need to deliver better services for our citizens. And it will improve the accountability of councils to their council tax payers."

The executive claims these changes are the most radical in almost 20 years. It has also set out proposals for a simpler formula for distributing council funding.

Although Scottish ministers have yet to agree on a methodology, they have confirmed that councils will receive a guaranteed minimum increase in their grant over the next three years. Authorities will learn how large the increase will be and how it will be apportioned when the executive announces individual council grants early next month.

A Convention of Scottish Local Authorities (Cosla) spokeswoman said: "The lifting of guidelines is an excellent move, and indicates the emphasis on outcomes rather than inputs in local government generally."

The convention has been heavily involved in putting together the reforms, which are based on a series of recommendations made by a joint executive/Cosla working group set up earlier this year.