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The answer to my second question was wrapped up in that. Thank you.

I go back to the point that Robert Emmott made about fiscal discussions going on in the medium and long term. Have there been discussions about things that could be done in the medium to long term, such as a local sales tax?

I will build on the issue of ring fencing. There is a difference between what COSLA is saying and what the Government is saying—the Government says that the ring-fenced portion of local government funding is 7 per cent, but COSLA says that it is 60 per cent. There are shared objectives, so the issue might be one of procedure, which takes us back to the point that Bill Moyes and Andrew Burns made about where that is agreed. This is all happening during the budget process, which makes it extremely difficult for councils to plan. Do you have any views on the procedure before that? How should we agree objectives in relation to where the ring-fenced money sits? I do not want to be in the same position next year. Is there a lesson that we need to learn on ring fencing and how shared objectives relate to that?

We cannot face the situation again next year in which COSLA says one thing and the Scottish Government says another about the procedure. I know that it is not as simple as that but perhaps we can learn from it to ensure that next year’s budget process is less complicated. We are a few weeks away from councils setting their budgets and we still do not know what our shared objectives are and where we go with that. It is too messy. What are your views on that?

I want to move on to the question of the revenue-raising options that are open to councils in the short term and in the medium to long term. I will start with the short-term options. What are your views on councils’ ability to raise their own income and how much that has changed over the past decade?

The second part of my question is about the longer term. The committee has been doing a bit of work on what other countries do in relation to local government finance. We found that councils in Scotland and the rest of the UK raise about 15 per cent of their own income, whereas in Europe that figure is around 50 per cent. We have looked at the workforce parking levy, the visitor tax levy and so on. That would almost be a start, but do we need to consider whether we can give local authorities more powers to raise income in that way? Councils could pick and choose from the available powers. I am not suggesting that Scotland should go down this route, but some other countries have local sales taxes, local income taxes and other taxes.

I would like to get your thoughts on the ability of councils to raise their own income, in the short term and the medium to long term.

That point and the point that Carol Calder made about general competence might need to be raised. I do not know whether that should be done through looking at the new deal. If the issue is general competence, it is about widening local authorities’ ability to look at that, and that could involve a discussion with COSLA. That is a valid point.

Obviously, there are inflationary pressures at the moment, and there is long-standing capital spending that local authorities planned for. Inflation has jumped up massively from last year to this year, and nobody could have predicted that. Are you confident that local authorities can invest in infrastructure that they have almost agreed on in the past year or two, given where inflationary pressures now are?

My next question was going to be whether you will be monitoring that over the next year, because there will be an impact on the delivery of capital projects, whether they are delayed or spread over a longer period of time.

Robert Emmott has set me up for my question, which is about the revenue-raising options that are open to councils. You might all have heard the previous panel session, in which I asked about the short term and the longer term. Carol Calder mentioned general competence in relation to councils being able to raise funds. What options are available to councils now? What is preventing you from doing that?

On the medium term, in the discussion with the previous panel, it was mentioned that most local authorities in Europe have the ability to raise about 50 per cent of their income. In Scotland, the figure is about 15 per cent. Again, in the short term, what would you like to see and what is preventing it from happening? In the medium to longer term, what other powers could local authorities look at? I am not proposing these options, but the options that are used in other countries include a local sales tax, roof taxes and taxes on visits to hotels—all that kind of stuff. Can you comment on that?

I will come to Robert Emmott first, as he mentioned fiscal flexibility.

With your CIPFA hat on, is that something that the organisation has discussed, or that you as directors of finance have discussed?

Thank you for that answer, cabinet secretary. As fellow committee members know, I have raised that issue on a number of occasions with a number of ministers and cabinet secretaries, so—yes—we will be keeping an eye on it.