LOCAL government leaders have signalled their welcome for a new report calling for a six-point overhaul of council funding.

Set to be launched at the STUC annual congress in Dundee today, the plan – drawn up by the Unison union and the Jimmy Reid Foundation think tank – calls for a “fundamental review” of the cash allocation for the country’s 32 regional bodies.

Arguing that expansion of local public services is possible with a “fairer system” of property taxes and environmental charges, it suggests boosting back-office staff to crack down on tax avoidance, seeking alternatives to the Small Business Bonus Scheme and other reliefs from non-domestic rates, and bringing buses, energy and other public services into council hands.

Other suggestions include increasing taxes on second homes and property owned by people who do not live in Scotland, and passing local authority debts and PPP/PFI contracts on to the Treasury to save “many billions” in interest charges each year and release tax revenues for investment in local economies and communities.

Making reliefs and subsidies and tenders for public procurement dependent on good practices at the local level could also raise revenues indirectly for council budgets, it is claimed.

Cosla, which represents councils, said: “Cosla has long said that the current model is not sustainable. We reiterated this point in our essential services campaign. Undoubtedly there is a funding issue for local government and we are happy to engage in any debate that gives us more funding and flexibility to deliver essential services for our communities.”

However, the Scottish Government says the 2019-20 settlement delivers a real-terms increase on the previous year and 20 of the country’s 32 councils “chose not to increase council tax by the full 4.79% permitted, which would have increased their funding by £30.8m.”

But Mike Kirby, Unison’s Scottish secretary said: “Over the years, the balance of funding for public services through local government has shifted from approximately 50% coming from national government to 50% being raised directly by local authorities, to 85% of funding coming from central government and 15% being raised directly by local authorities.

“Together with an overall reduction in funding, during a period of austerity this has resulted in severe financial pressures and impacted upon the quality and delivery of vital public services. Politicians in all spheres must create the time and space for a fundamental review of funding local government.”

Dundee’s Lord Provost Ian Borthwick will today welcome delegates to the beginning of the three-day STUC congress at the city’s Caird Hall, with Labour leader Richard Leonard set to address the event this afternoon.

Nicola Sturgeon will make her speech on Wednesday morning.

Other topics for discussion include the menopause, Brexit, challenging racism and the retiral age for prison officers. Scottish Greens co-convener Maggie Chapman and Fife Council co-leader David Ross of Labour are scheduled to speak at the launch of the council funding report.

As much as £1.64 billion has been lost to councils since 2011-12, it is claimed.

Unison and the Jimmy Reid Foundation said: “Local government has borne the heaviest burden of austerity cuts to the Scottish budget since the financial  crisis.

“There just isn’t enough money in the local government budget to meet the needs of our citizens. We need to examine new and alternative sources of revenue.”

Professor Mike Danson, the lead author of the report said: “It is economically efficient and effective to shift the tax burden onto property and land owners and away from council taxpayers, making the tax system more progressive and more based on ability to pay”.