 Good morning and welcome to the 27th meeting in 2023 of the local government housing and planning committee. I just want to note that both Mark Griffin and Stephanie Callaghan are joining us online. I would also like to invite Marie McNair and Stephanie to draw attention to their interests. Marie. Thank you, convener. I'd like to declare that up until May 2022 I was a councillor at Southlandshire Council up until 2021. May I remind members and witnesses to ensure that all their devices are on silent and that all other notifications are turned off during the meeting. The first item on the agenda today is to decide whether to take item 6 in private. Are members agreed? We're all agreed. The committee previously agreed to take item 5 in private. The next item on our agenda today is to take evidence on the Visitor Levy Scotland Bill from two panels of witnesses and we're joined on our first panel online by Miriam Kelly, who's the chief officer of local government finance and Councillor Gail McGregor, who's the environment and economy spokesperson at COSLA. I welcome our witnesses to the meeting and we will direct our questions in the first instance to Councillor McGregor, but Miriam, if you'd like to come in, please type R in the chat function. There's no need for you to manually operate your microphones as we'll do that automatically for you. I'll start off around a theme of your views of the general aims of the bill. COSLA's submission on the levy said that it would have a positive impact on local government. I'd be interested to hear from you what your thoughts are around the fact that not all local authorities are expected to introduce a levy and, if you have thoughts around whether that will create a funding disparity between councils that have high numbers of overnight visitors with those that have relatively few. Thank you very much, convener, and good morning, members. It's lovely to be here. Just to give a bit of context, I launched the consultation on this in June 2018, so it's been in the system for quite a long time now and it's great that we've got to this stage. We've been very clear as COSLA that this is not a one-size-fits-all, that not all local authorities will use power. We do have some authorities who are heavily pressured with high tourist numbers and high visitor numbers. For them, it will be absolutely pivotal to be able to manage the services that are required around that tourist offering. It's critical that all the public, the businesses out there, understand that this is not going to be implemented across all authorities. It will be very sensitively handled by those who feel that they need to introduce that power to manage the services. Obviously, the additional income that is intended to come in from the visitor levy will be utilised to support those tourism and visitor services. I don't have anything to add. Thanks for that. I wonder, though, about the disparity piece around some local authorities taking up the levy and others not in terms of the funding disparities. What are your thoughts on that? As I've just said, the key for this is that the additional income that will come in from the visitor levy will be utilised to support high levels of visitor numbers in the service that are required around that. Authorities that don't have as high visitor numbers will not have the additional service pressures, so money will go back into services. Thanks for clarifying that. I didn't quite pick you up there. Continuing on that theme around tourist offers and tourist pressures, in your submission, you mentioned the significant local authority reduction in spending on culture, leisure and roads of the past 10 years. I'd be interested to understand if COSLA has done any research on what impact spending decisions have had on the tourist offer and on those communities impacted and to what extent could the visitor levy money help reverse any underinvestment in these service areas? Well, as you'll be aware, local government finance has reduced in particularly in areas that are not ring-fenced or protected, so your cultural leisure services, your environmental services and roads have been particularly hit in the past 10, 13 years. The key here is that the visitor levy, as I say, where there's additional pressure on service in particular authorities, will be used directly to support the very things like your waste collection, your street scene, your offering that makes it a more attractive place for people to visit. Now, these areas, as we know, have been cut consistently over the years to very much protect frontline services and key services, but when you're looking at offering a good tourist offering or a good visitor offering, those services are really important. As I say, your street scene, ensuring that your environment is clean, that waste is lifted promptly. If you don't have the funding to do that and you have high visitor numbers, then the offering becomes less. The key with this is that the additional funding that will come in will assist in that support. Miriam may have some additional mapping around the impact of that, but certainly those particular services that sit within the 30 per cent of council's budgets that are not protected have been significantly hit in comparison to others. I'm going to bring in Pam Goswell with a brief supplementary. Thank you, convener. Good morning, panel. Councillor Gail, you've just spoken about how the funding may assist, basically, certain infrastructure and certain cleanup, bins and things like that. I raised a question last week and the week before in relation to the revenue that it could end up being used to plug a hole in the council budget—it's a very grey area—and should you think that the actual revenue should be ring-fenced for tourist-related spend only, and how do you see that working? The principle is that local government and individual councils should be able to create a model that suits their particular local area, but there's been a huge emphasis on that being able to assist in areas that are pressured, particularly Edinburgh, Highlands and Islands, where they see massive business numbers and they don't have any additional income at the moment to assist with the pressures of that service. I think that the intention would be in councils to very much direct this funding to areas that would assist tourism. It's not to plug a gap that exists, although there are massive gaps in local government finance, it's to acknowledge that in areas where there are high visitor numbers, there are higher pressures and, as a consequence of that, the funding would be put back into services that would support that, and actually support the business and the communities that live within those areas. We all know that communities can get frustrated when there's high tourist numbers and visitor numbers. They can see that the pressures in their local community can begin to grow and grow, and I think that communities would welcome that additional investment that will come from on the back with the visitor levy. Thank you very much for that. Miran, you've indicated you wanted to come in. Thanks, Camina. Just to pick up a couple of those points there, I think on the concern about the potential disparity issue, that's one of the reasons why it's critical that this is discretionary. Following local consultation, councils will then be able to make a decision about whether or not this is the appropriate approach for their local area and their local circumstances. On other elements, Council McGregor is obviously clearly setting out that where we see potential benefits here, and I think it's worth highlighting that things like your culture and tourism offer are the ones that have had to be significantly cut in real terms over the past 10 to 15 years due to the directed spend and ring ffencing around other elements of the local government funding. I think that from our perspective and from local authorities that are interested in developing this, the big opportunity this presents is the ability to start investing again in the tourism. I would highlight that we're keen to ensure that business tourists as well as leisure tourists are captured within that, but also the benefits that can then be mutually beneficial to communities who have seen things like reduced investment in their local parks, in their local theatres, in all of that element, which is part of what makes Scotland attractive. Thank you very much for that additional comment. I'm now going to bring in Marie McNair. Thank you, convener. Good morning, Council McGregor and Ms Kelly. I've been asked similar questions in the previous evidence sessions. I wanted to ask you, COSLA, what are your views on this being an accommodation levy rather than a visitor levy? As many visitors such as daytrippers, wild campers and some motor home drivers will pay you nothing. Yes, very good question. I think that the key thing is that it has to be manageable by the local authorities and by the businesses, and as you will appreciate whether we're looking at a flat rate or a percentage rate, if it's accommodation based rather than visitor number based, then it's much easier to manage and collect and it's easier for the businesses as well. We have looked at wild campers and motor homes and such like, but unless they're actually staying in dedicated sites, it would be very, very difficult for us. They're probably quite onerous and get to a point where what we're bringing in through the levy is being lost in the collection of that. There's been a lot of work done around cruise ships and other areas, but the main and key point is that we need to make it as easy as possible for the businesses to manage and also for the local authorities to manage so that the full value of that levy does come into the community and then it's redistributed through services. Miriam, you wanted to come in. Yes, thank you. Just to add to that, Councillor Mcgregor is entirely correct. I think you're aware that there is some work in terms of the potential options around cruise liners and what that might mean. There are concerns that we're discussing about, particularly around motor homes, because what we also wouldn't want to see is any unintended consequences from this that might drive different types of behaviour, so there are conversations around that. I think that's something that we would be hoping to learn from and actively manage, but Councillor Mcgregor's point is that it needs to be a proportionate and appropriate approach to that. Just back on cruise ships, with the Scottish Government confirming the seat time in the bill, can you give us your views on that? It's certainly something that COSLA leaders are seeking to have on a discretionary level to include either within this or an appropriate legislative vehicle. We are looking at what that means in practice for both local authorities and for industry, and the impact that that could have, it's obviously not always straightforward. I know that Councillor Gail just mentioned that in relation to that. Flat rates are much easier to manage and collect, and they're easier for business to manage and local authorities. My questions really around the, basically, we've had mixed opinions on this, that it should be a percent or it should be a flat rate, and obviously, like you've mentioned, Councillor Gail, there's burdens on businesses to collect that as well. Should the bill be amended to allow local authorities to introduce flat rates if they decide that's most appropriate for this area? So, a question for Councillor Gail first. Yeah, I think there's much flexibility around the model that is used as required, and obviously local councils are looking for that autonomy to implement it in the best way for their particular local area. There's definitely pros and cons, as you can imagine, if we apply a flat rate of £1.50 a night, that has a disproportionate effect on a small bed and breakfast, in comparison to a very expensive hotel. There are pros and cons on the flat rate. The percentage rate will obviously be slightly more complicated to collect, particularly for accommodation providers that use various booking apps online for their rates fluctuate. I think that we're looking at the pros and cons and really looking at as much flexibility around the councils being able to operate that, and that's certainly in discussion. I have to say that this particular bill and the route to this film has been a good example of really good communication and co-production between the local government and Scottish government and partners and businesses, and there's been lots of conversations to try and get it right. At this particular stage, I think that local authorities don't have a view either way. It's around looking at what will be the most straightforward for the councils and the businesses to manage that isn't disproportionate and doesn't disadvantage either. Can I just clarify there, Councillor McGregor? I understand what you're saying around councils wanting to have as much flexibility around the model, but what we've heard from other people coming in to talk to us about this is that it needs, however, it needs to be one or the other, a national agreement, whether it's a flat rate or a percentage. We're not reinventing the wheel here. I think we're one of only nine countries in Europe that don't have some form of visitor levy, so there's countries and models right across Europe that some implement the percentage rate, some implement a flexible flat rate, and in some areas they do both. I think Amsterdam has a model where they can choose to do one or the other. I think that, crucially, it's having that flexibility and being aware of the potential complications for businesses as well. In collaboration and consultation with business, it's going to be absolutely imperative that the individual councils decide to take this visitor levy forward. They're going to be expected to do a comprehensive consultation with their local businesses and people that will be affected by the levy. At that stage, it needs to be in discussion, which will be the best model for that particular local authority area. I see. Again, I'm just really trying to get clear here. You would like to see the bill have the option for a flat rate or a percentage in it and then allow councils to choose whichever one they want to pick up and consult on? I think that that would be the discussion that we would be having with government. It's just to ensure as much flexibility because, as I say, different areas will want to implement it in different ways to suit that locality. We have a model on the continent where there is that flexibility of a percentage model of a flat rate. I wanted to carry on with a couple of questions around that and flexibility because there has been calls for a national set cap with regard to a percentage rate or the number of nights that would be chargeable. For that to be set by different local authorities, then it would create a postcode lottery across the country when people are coming to visit Scotland. I just wondered what Cossillers' View was on specifically around the number of nights that would be charged. Again, it surrounds the local flexibility of the council. I think that it should be very much self-regulating and that there would be no need for a cap. I would hope that authorities would look at that very sensitively, understand their local area and the pressures in their local area if they choose to implement it at all. Having that self-regulating as a saying, no need for a cap, would probably be a better model and that would be Cossillers' preferred option. Okay, thank you for that. Throughout the time that we've been looking at this, I've raised the issue of exemptions for individuals and the fact that this is more accommodation tax than a tourist tax, essentially. For those groups who are staying in hotels, for example, visiting family members in hospital, not being captured under this, I just wondered in Cossillers' View, firstly, do you support exemptions to that? Secondly, how do you think that could be best delivered? The building contains a section around voucher schemes, but that's the only detail that the Scottish Government has put forward. Any shift to a national exemption would likely create an additional restrictive and disadvantageous burden, and it would be very difficult to implement. Miriam might be able to speak more to what discussions have happened with Government, but, as I said, trying to avoid the unintended negative consequences could, by contrast, end up with us having an additional burden on councils and businesses for the collection, and then it would be very difficult to collect it, audit and validate the levy and ensure that the exemption is correct. Miriam, you may have additional information. The issue of exemptions is one that we're very aware of, and there will be conversations about whether or not there are either exemptions that local authorities think consistently should apply or other elements, but, as Councillor McGregor said, we're also very aware of the potential complications that introduces not just for local authorities but for businesses and users of these premises themselves, so there is absolutely that balance to be struck between not introducing any unintended consequences or perverse behaviour into markets and reflecting on what the local needs, et cetera, are. Thank you for that. I suppose the difficulty is most of this is not within local government, it's people looking accommodation online or through the hotels or B&Bs, guest houses they're staying with, so it's not really a role necessary. Councils will be responsible for, so I think as the bill progresses, there's maybe more conversation over that. I'm now going to bring in Willie Coffey. Thanks very much, convener, and good morning to you both. I wanted to start, Gail, if I may, asking you what's causeless views on the 18-month lead-in debate. You've probably heard a variety of evidence at the committee if you've had a chance to see it over previous weeks. Rob Dixon from Visit Scotland was quite passionate, I think, about needing the 18-month lead-in so that the councils are ready, fuller area after their consultation, to implement it, but you think that it can be done a bit sooner than that. Could you just give us a flavour of what causeless view is about the lead-in period, please? Yeah, again, we're listening to business and we're trying to work with business to get an implementation model that will work. I think that Coffey feels at the moment that the length of the lead-in period of 18 months would be excessive. We do have, obviously, constrained finances and any immediate revenue raising would be welcomed by those authorities who are particularly impacted by high-visiting numbers and tourism. I think that the 18-month lead-in is particularly excessive, particularly given that we do have experience from many other European cities and countries and municipalities of an implementation model. As I say, it's not as if we're creating anything new. Models are out there that can be very easily replicated. You said yourself, Gail, that you yourself launched the consultation in 2018, which is not five years ago, but would you be able to put some kind of figure about what causeless would be happy with in terms of a lead-in at all? I know that's maybe a bit difficult to unfair to ask you that, but is there any thinking about what, as a reasonable period, lead-in time for this? Again, I think that it would be down to each individual local authority to look at what model can be implemented, and that would again be through consultation. There are a number of authorities, as you know, that are particularly keen to have this implemented. As you say, we are five and a half years down the line, notwithstanding that we did have Covid, so I think that we can forgive a bit of a delay in the bill, but there are some local authorities that are very keen to get this up and running as quickly as possible. You're sitting in one of the biggest champions, and Edinburgh City are desperate to implement this, so I think that it's as quickly as possible. I don't have a time frame. I don't know if MIRRIN has had that conversation with Edinburgh City or Highlands and Islands, but certainly they would be very quick to get it up and running. Thanks very much, Gil. MIRRIN, do you want to come in on this question? Yeah, thanks for that. We don't have a formal time frame that's been asked for, but I get to emphasise the reason why we think that 18 months is excessive, is because it's 18 months after all of the consultation has been completed. The consultation itself will take several months as local authorities engage with local communities and businesses to develop that. It's always going to be significantly longer than 18 months before anything is implemented, and that's why we think that an 18-month lead-in is excessive and that that should be reduced. We do appreciate that businesses will require some certainty as do visitors. People plan holidays, so that would have to be considered in terms of how far ahead they would want to provide the certainty to both visitors and businesses. On the issue of the financial memorandum in the Bria, you probably also heard some conversation about that at the previous committee sessions. Have you a view on whether the memorandum in the Bria is still appropriate or need to be updated or revised, because they were prepared some years ago, Councillor McGregor? I'm just waiting to be unmuted there. I think it's generally appropriate. Yes, it was done in 2019 and it may be a little bit out of date, but the key thing, as I've already said, is that that communication, non-going communication with business and engagement with the industry has continued and will continue, and the key now going forward around any further impact assessments is that they will be done locally within the local council area that is going to implement the levy. We've been very clear about that, that that continual consultation before implementation with a very robust impact assessment will be absolutely necessary in each individual local authority area. Thank you very much. Any view on that, Moran? You were muted there, but I think you said no. Nothing to add. Final query from me perhaps again to you, Councillor McGregor. We're talking about flexibility all throughout this discussion and debate and some folks say it's localism for localism's sake, but some folks say it's really important that local authorities have the powers and the flexibility to do things that best suit local circumstances. Where does COSLA think about the application of flexibility through this? Should there be rigid rules and guidance or should there be as much localism as we can possibly put into this system? Well, it'll come as no surprise to you that as a champion of local government, I'll be looking for as much flexibility around the development and the implementation of the bill as possible, and as I said, this has been in the offering for us. It was one of the first ones that we looked at that would provide local government with the flexibility to income generate and bring in some additional funding. We're consistently being challenged by the Government and your committee and various other committees to look at creative ways that we can actually bring in additional income. This one's appropriate because it gives each individual authority if they choose to the ability to do that. As I said, it'll come as no surprise that we would seek as much flexibility. We know our local areas and what our local areas can manage better. I would suggest that having that flexibility will ensure that the model is right for that particular locality. Is there no risk of confusing visitors if they go around Scotland to different parts where there are different systems in place and the levee is different and it's a flat rate here, a percentage there and there are localised versions of implementation of the scheme? Is that perhaps not a risk that visitors will be confused by it? I think systems, as I say, we've got many models across Europe. If I go to Florence, I'll pay a percentage rate. If I go to Manchester, I'll pay a flat rate. It's simply added to your bill. I think that people are very understanding of that. Again, it will be for the businesses and the operating model and the authority to ensure that the booking of that and the management of that is as easy as possible for both the user and the business, and I think that that will be absolutely crucial. I think that people out there are used to having a local rate charge on a room rate in many countries and cities, and I don't think that it will cause any particular confusion with visitors. I want to come back to the percentage and the flat rate. Use the example of, if you go to Florence, you're going to pay a percentage rate, if you go to Manchester, you pay a flat rate. What about within a country? Is it common that you would go to Florence and pay a percentage rate and then another place, I don't know what, Venice, and you would pay a flat rate? As I say, there are many models, individual countries, and particularly municipalities in areas within France that have different models because the individual municipality has been able to implement what they feel is best for them. As I said earlier, I think that in Amsterdam they have a model within some accommodation, it is a percentage rate and another accommodation is a flat rate, and I think that comes down to the ease of collection or the nature of the business. Again, in consultation with the authority, what is going to work best in that particular locality. There are so many models across Europe, I think that this is why we require the absolute maximum flexibility to ensure that what we are implementing or what individual councils will implement are going to work for that local area and, as I say, the businesses and the users. That's crucial. Great. Thank you very much for clarifying that. I'm going to bring in Pam Gosall. Thank you, convener. While some witnesses called it an accommodation tax, others asserted that businesses would be taking up the role of unpaid tax collectors for local authorities. Should companies be able to claim a portion of this revenue from tourist taxis to help offset the costs of collecting and reporting levies just the same way as local authorities can do so with the levy fund? My question to Councillor Gail, please. I know that that has been raised by some businesses and I don't believe that it will be particularly onerous on the business. The crucial thing is that the software and what we use to actually claim that levy back needs to be as straightforward as possible. At the moment, areas that do have significantly high pressures from visitor numbers, the onus is on utilising that funding to make the local authority area, and as we discussed earlier, the street scene, the parks, the theatres and the offering that have a lot of pressure on them in high visitor areas to have them see the maximum income and investment from that funding. So our view would be that businesses shouldn't get a percentage of that, that the purpose of this funding is for it to come to help to bolster and invest in local services. Thank you for that answer, Councillor Gail. But don't you think that businesses, basically, especially if there's questions on the flat rate and percent, some local authorities may charge different mechanisms from another, and if there are small micro-businesses out there that have one or two, maybe something in the highlands, then something over in Edinburgh as well, that even their websites, their administration, their accountancy and stuff, that they would need that help. It's just we've heard, obviously, from witnesses that they would ask for some help. Again, we would hope that councils would discuss with businesses in the local area, because, as you say, one size is not going to fit all, and if they've got business in highlands and islands, it may apply. If they have a business in Edinburgh, it may apply, but they may have other businesses in local authority areas where the levy is not going to be implemented at all. Meryn, I don't know if there's been much discussion around a percentage of that going back to businesses. Meryn, would you like to come in? Thanks, I think you can hear me. Yes. Yes, just to say, we are aware that the potential complications that having the local decisions on different types of percentage may be applying at different times of the year or not applying at all at places. The complication that that can have for businesses, and it's one of the reasons why we are already exploring what the opportunities might be about a single platform for businesses to use in terms of what might be needed behind this, so that there is actually that single experience for them, as opposed to, as might be suggested, that you have to individually log in to different councils with different systems, etc. So, we are very mindful of that. It's in the very early stages and it is an exploration, but the potential administrative burden on businesses is recognised. We are hoping to design systems that will reduce that, and therefore there would be no need, because there wouldn't be any significant additional costs introduced to businesses. Thanks for that, Mary. That raises more questions in my mind. So, if you are talking about one single platform across Scotland where local authorities can choose to programme in their percentage or their flat rate, is that a platform that is a relationship between the business and the local authority, or is it three-way where the visitor books there? I'm seeing... No, okay. Come on in. We'll wait for you. I know we have to have these pauses. No, it wouldn't be an expectation that there would be any interaction with a visitor within that. The expectation is that it would be around any ordered requirements, all of the payment and the interaction between any businesses and the local authority in terms of the collection of the levy. Okay, and would there be support then for... I mean, I don't know the numbers, but we have heard that there are people who still do their... keep their business in pencil and paper or pen and paper mode. Would there be support for those people to then move into a digital realm? That would absolutely be something that we have to factor in, because it would have to be usable by businesses as well as local authorities. I would emphasise again that this is in very early stages. We are engaging with the local government digital office on this. Great, but it's great that you're having that conversation about at least a unified user experience in that way. I'm now going to bring in Stephanie Callaghan, who's joining us online. Thanks very much, convener, and thanks to the panel for being with us today. First of all, I want to ask you just about the Verity House agreement, which, of course, by the default position for that is that there should be no ringfencing or direction of funding. So, I'm just wondering how does that kind of marry up in your view with the bill's requirements relating to how the levy money is spent and possibly go to Gail first with that one? Yeah, as I said, thank you very much. Really good question. As I said earlier, this has been in the creation now for a number of years, and it actually predates the Verity House. I think that it's probably a good example, as a say, of local government working with Scottish Government and all parliamentarians of all parties. We prefer no direction, obviously we would, but we've been consistent in our view that the funding that is raised from that is to support the very services that help to bolster to tourism and visitor numbers. It is not a case of that it's ringfenced as such, it is additional income to support the very services that people rely on when they do visit the areas, whether that be for holidays or for business. It puts a massive burden on local authorities, as we know, particularly at specific times of the year. It's saying Edinburgh, although Edinburgh is always busy. The key thing is that it's not there to, it was never intended to bolster other services, so by definition it would be ringfenced to be reinvested into the services that support tourism. I don't know if Mirren, do you want to come in? Yeah, I'm happy to support that. The principle is always that we don't support direction or ringfencing, but the purpose of the funding is to invest in communities, so the money that any funding raised by local authorities that choose to invest in this would be intending to use it for that purpose. Thanks, Stephanie. You've got another question. Yep, thank you, convener. It's good to see a good indication for the future that Scottish Government and local authorities in COSLA are looking at it in this way. We've already had some examples there around different things that we could do to support visitors in local authorities, because of course we need to make sure that the spend is about those visiting for leisure purposes, that there's a focus on that there. I'm wondering if there are any other examples of that and also if the objectives should be widened a bit there as well to also cater for business visitors. Thanks. Gail. Sorry, I'm just jotting down. The examples that we've given earlier would be of benefit to anybody who's visiting an area, whether it be for business or for leisure purposes. I don't really know that I have a huge amount more to add to that. We've been very clear that there are pressures on particularly local authorities, particularly in respect of street scene parks and open spaces, waste. There's many things, but I think that the key thing is that we need to be able to invest in that for the benefit of all visitors, whether it's for business or for leisure. Thanks for that. Myrin, do you have anything to add? Just to confirm for clarity that we do think that it should be expanded to cover business tourists as well as leisure, because there are places where they might have different needs and priorities and therefore we wouldn't want to be excluding a significant part of tourism. Thanks very much for that. Stephanie Gail, come back in. Thanks very much there. Can you give some examples of things in particular that she would like to possibly see then, the expansion relating to, so would that be about digital, about confidence venues or anything that she thinks in particular would be helpful? Thanks. I mean, I think one of the things, if you think about how business versus leisure tourists might use transport within localities and then travelling to and from localities, that's somewhere where you might have a different response if you are only able to invest for leisure tourists versus for business tourists as well. So absolutely what we would want is the ability for areas to be able to consult on and consider what would most benefit the tourists from whatever purpose they come in here for and communities as well. So that as Council McGregor has been saying so, that they should be mutually beneficial from our view. They should help communities and individuals that live in these localities and also enhance the tourist experience for both leisure and business tourists. Great, thanks for that. That's helpful to hear that. I'm now going to come to Mark Griffin, who's also online. Thank you. Good morning. I wanted to touch on an issue that the Scottish Tourism Alliance have raised in evidence when they have said that they would like national parks to receive a share of the investment from the revenue raised. I just wonder if Council McGregor, do you have any idea of how that could potentially work in practice? They're suggesting that you've got one national park and multiple local authorities, which cover part of that and how that even could work. Thanks very much, Mark. I actually don't know an awful lot about this. It's not a part of it that I've been particularly familiar with. Going back to the point around shared digital that Marum was making just a moment ago, having that single platform would be designed to ensure that local authorities across boundaries can manage the system easily. I suppose that that would translate into a national park model as well. If the national park that we currently have sits across many authorities, if we have that shared digital platform, that would make it more manageable across them all, but I'm not aware of the ask from around national parks. Myrin, you want to come in. Thanks very much. I would say that national parks would be part of the consultation process as well, so that gives the opportunity to consider how best the local authority might invest, which would include the national park. We wouldn't support anything that gives any automatic direct funding to national parks. I think that that would be frankly very complicated anyway, but they wouldn't be excluded from the opportunities of investment where that's deemed locally appropriate following the consultation with communities, tourist business and the parks themselves. Okay, thanks for that. My second question was around a review. You said that the legislation is passed. What is a measure of success? Do local authorities have any level of data as to what historic spend has been on the tourism offer versus what it might be post-introduction of a levy and what do you think we should be looking at in 10 years' time to go back and measure whether that has been a success or not? The whole input of setting this up is to enhance the offering for leisure or business visitors and localities to ensure that communities are supported in areas of high pressure. I suppose that the measure would be in 10 years' time that has that investment and income and then filtering that through the investment had a positive impact on the locality. We can measure that very easily in a local way. Has it had a positive impact? Are people seeing a material change in the environment and what they are experiencing when they visit particular areas? I think that it will be for individual local councils to determine what that success would look like. For me, the implementation purpose of this is to create an income to, in turn, create a better offering for people visiting an area, a city, a town or a village or whatever. For me, it is tangible. Has it made a difference to the locality? Can people see that the streets are cleaner, that bins are emptied more regularly, that the green space is better looked after and has really nice planting in the summer? That, for me, is the tangible stuff that you know as an elected member. The public pick up on things like that and they will relay it back to you, but Mirren might have some information on measures. Thanks very much. I will admit that it is not. In terms of how we might measure any outcomes from that, we have not developed formal positions on it. There is obviously significant reporting and monitoring of local government spend through the local government finance returns, which are put in annually. That is where evidence can be seen about the significant reduced real-terms investment over the last 10 years. There would be elements of that. I think that Council McGregor's point is the key one. It is actually measuring the success in terms of the experience of both communities and visitors within our areas. To be honest, I might take back to the expert group and leaders on how we might consider that. That would be wonderful and very welcome. Thank you. I am glad that our questions are useful this morning. I would just like to come back on a little bit more on the national parks. I would be concerned that you talked about the idea of the single platform. That could help, and that is welcome. The national park should be part of any local authority consultations. However, if a national park has five local authorities, it therefore has to participate in five local consultations. I think that they are used to that. I think that I have a bit of concern about those two bodies having to do that work of looking externally and responding and having different approaches. I think that I would welcome a bit more thought from COSLA on how that could be approached. I am more joined up approach from the five local authorities that border a park, for example. All your questions today have been absolutely brilliant. There are a couple that are testing us, which is good, and it will enable us to better scrutinise certain parts of it. Obviously, parts of industry have raised issues as well that we are maybe not as cited on. I think that this national park question is another one that we will take back to the officer group and feed in and make sure that that has been given best consideration. I think that this is absolutely key to the introduction of this bill and its subsequent implementation. We listen, we look at areas where there could be problems and we tease those out before any introduction of the levy. I think that it has been really useful this morning. If it is additional on that, we will start to come back to the committee and give you some more information. Thank you very much for that. That would be very welcome in both cases there. That concludes our questions. It has been very helpful to have you both here and get a bit more insight and be reminded a little bit of the history of the process around this, starting way back in 2018. I very much appreciate your evidence today and I now briefly suspend the meeting to allow for a changer of witnesses. Our second panel this morning is joined by Tom Arthur, who is the Minister for Community Wealth and Public Finance with the Scottish Government. Mr Arthur is also supported by Scottish Government officials Ninian Christie, who is a solicitor at the Scottish Government legal directorate, Alistair Graham, who is the policy adviser at the local government and analytical services division and Ben Haines, who is the bill team leader for the visitor levy Scotland bill. I welcome our witnesses this morning. Before we move to questions from members, I invite Mr Arthur to make a short opening statement. This bill is an important measure, and if pass will give local authorities a significant new power. A visitor levy can be a force for good, supporting the vitally important visitor economy and bringing benefits to visitors, residents and businesses. The new deal for business and the new deal for local government are at the heart of the Government's approach to this measure. We have already taken on board the helpful input that we have had from business, local government and others, and I am committed to continuing that meaningful and constructive engagement as we move forward. This will be the first visitor levy in the UK and the Government wants to get it right. As lead minister on the bill, there were several key policy questions that I considered together with my ministerial colleagues as the proposals in the bill were developed. I want to focus on two of those in my remarks. The first key question was whether it was right to give local authorities this power. The Government believes that it is. 21 out of 27 EU countries have some kind of visitor levy, and they are commonplace in other locations throughout the world. The opportunity that a visitor levy presents is significant and offers councils the opportunity to use proceeds to invest in their local economy, bringing benefits to residents and visitors alike. International good practice, highlighted by the European Tourism Association, tells us that local consultation is crucial to a successful visitor levy, and the bill would require a local authority to consult local businesses, communities and tourism organisations. Good local engagement will be really important in making sure that a visitor levy is well designed and funds and raises will be used to best effect. The second key question that I and ministerial colleagues considered in relation to the bill was the balance between local flexibility and national consistency. That is a common thread going through the on-going debate about whether a national cap is appropriate, the approach that you take to exemptions and the rules around how funding raised by a visitor levy is to be used. The bill takes a middle way between having too rigid or too lax a national framework. It gives local authorities who are accountable to their electorates the ability to create a visitor levy that works for their area, whilst providing national consistency in areas such as how the levy is charged and remitted. We continue to listen to the variety of views from stakeholders on the balance to be struck between local flexibility and national consistency. We will listen carefully to the committee's views on that, too. One other issue that I would like to touch on is the potential for a cruise ship levy. The Government recently announced that we will seek to give local authorities the power to create a cruise ship levy. Policy work on the levy is under way in partnership with local government. We will lead to a formal public consultation, allowing all relevant groups to provide their input to the proposal. We may seek to amend the bill to include a cruise ship levy, but that will very much depend on whether policy development work and a consultation have been completed and the views that Parliament takes on the scope of the bill. We do not want to delay the bill and the power it will give to local authorities if work on a cruise ship levy is not completed in time for it to be added. Lastly, the bill is about looking forward. It seeks to establish a measure now that can deliver sustained investment in the future. It fits with our ambition of ffiscally empowering local government and strengthening local democracy and division the government shares with the tourism industry set out in the National Tourism Strategy Scotland Outlook 2030. I very much welcome the committee's scrutiny of this legislation and looking forward to the questions and discussion ahead this morning. Thanks very much for that helpful opening statement and it's good to hear that you've been listening to a variety of views through the process. I'm going to ask a number of questions around the general aims of the bill. Over the time that we've been taking evidence, we heard from representatives of accommodation providers that the bill gives the impression that Scotland has a problem with tourism and that there may be a risk of reputational damage and that there has been concerns voiced about the impacts of Scotland's competitiveness. I wonder what your thoughts are on those two perspectives. Scotland is a world-class tourist destination and that is down to the professionalism, dedication and hard work of all those working across the visitor economy in Scotland. What this levy is about, this bill is about, is creating what is a discretionary power for local authorities, for local authorities democratically accountable to their electrics to determine whether or not they use, but which will provide a power to raise additional revenue to invest in the visitor economy. That's why we have at the heart of this legislation that requirement to consult for local authorities wishing to introduce a visitor levy to set out what they understand the impact of the levy would be. What I see this power is having is the potential to generate valuable extra investment to enhance and to support and to develop the offering, the world-class offering that Scotland already gives and that local flexibility is important because what it allows is for local authorities considering introducing a levy in consultation with business and their communities and other interested parties in their area to consider and develop a levy that can really add value, that can provide a significant return on investment. The Government recognises the immense contribution that the visitor economy, the accommodation sector makes specifically to Scotland and we see this bill as an opportunity for that discretionary power to help to enhance that offer. Thanks very much for that. Continuing on the theme of concerns that have been raised by business groups, one company told us that the bill looks like localism for localism's sake and I've been interested to hear what your thoughts are around the proposal for local flexibility and variations and the concerns that that might lead to confusion and complexity for customers and businesses. As I touched on in my opening statement, I very much recognise the importance of getting the balance right between national consistency and avoiding any unnecessary administrative variation but allowing that local flexibility to allow local areas to respond to the assets in needs of their particular areas. What would be a powerful and logical investment in the visitor economy here in Edinburgh might not necessarily be so? Another part of Scotland, for example, in the Highlands, is that local flexibility to allow local authorities through consultation with business and those who are active in the visitor economy area to ensure that revenue raised and the way in which the revenue is raised through the visitor levy scheme is appropriate in response to those local circumstances and gets the best return on investment for each particular area. Thanks very much for that. It's good that you highlight again that local authorities aren't just going to do this, they're going to be required to carry out consultation with all stakeholders. My third question is about the concerns that have been raised that the visitor levy will be effectively a tax on accommodation providers rather than a tax on visitors. I wondered what your thoughts are on that. I'm very conscious of the need to be talking about this as a visitor levy. I'm very deliberate in the use of our language. This is an opportunity to raise revenue that will be invested back into the visitor economy. In terms of where the charge lies, there needs to be an efficient and effective way of administering the tax. In this case, just as businesses would collect other taxes, that would be the process by which the levy would operate. For example, visitors coming from other parts of the world, if the charge was directly on the visitor, there might be difficult challenges around compliance and enforcement for people who live outwith the jurisdiction in which we operate. I'm keen, as we have been already, to continue to engage with business, to ensure that we get an administrative regime that is as efficient and as light touch as possible, and where we can find national consistency to do so. That is also why we asked Visit Scotland to convene an expert group with representatives from local government and from the visitor economy. That is important because what it will enable them to do is to develop best practice and guidance to support local authorities in implementing a visitor levy, should Parliament pass a bill and should local authorities choose to use the power. Thank you very much for that response. It's good to hear again about the Visit Scotland expert group that we are getting that insight from the people who have experience in those areas. I'm going to move on to questions around how the levy revenues will be raised, and I'm going to bring in Pam Gosall. Thank you, convener. Good morning, minister, and good morning to the rest of the panel as well. Minister, you just spoke about there in your opening statement how it's important to strike the balance, basically having the national consistency and local authority flexibility. We've obviously heard witnesses come in here and give evidence on that. Some prefer the percentage rate, some prefer the flat rate. However, industry appears to have the view that to make it more simpler to collect this levy that they would like, basically, the levy to be around a flat rate, to adopt a flat rate. Do you think that the bill should be amended to allow local authorities to introduce a flat rate if they decided that that was the most appropriate process to go down? Thank you very much. I think that it's an excellent question, and I appreciate it as one of the key issues that's emerged in the committee's deliberations. It's certainly something that's been consistently raised with me and my officials in our engagement with accommodation providers. I think that it's a starting principle. I'd hope that we would all agree that there probably should be uniformity. It should either be a flat rate or it should be a percentage fee. I think that that's something that accommodation providers may well look for as consistency. If we're going to have a percentage rate, then that's what should be in the bill and should be applicable across all local authorities seeking to use the power, and conversely, a flat rate. It should be a flat rate. I recognise the strong views and support of the argument. Clearly, a percentage allows for a more proportionate and progressive approach. It would recognise that someone staying in a suite in a five-star hotel would be subject to a different rate than someone who was staying in budget accommodation, for example. I'm conscious that that is something that will be a key concern, but I also recognise challenges around—or questions that are raised by industry around the compliance of the minister to the burden that would entail. I appreciate options for a flat rate range from a single flat rate to a tiered structure. Potentially, with a tiered structure, we start to add in additional complexity, which a flat rate would be seeking to solve by moving from a percentage rate. It is important to consider that in detail. I am very open to having those discussions today. I am also very keen on this and a number of other issues to understand the view that the committee forms when it publishes its report ahead of stage 1. On this, I am open to looking at amendments to changing to a flat rate, but it is something that will require further detail consideration and engagement with industry. I am happy to follow up with the committee ahead of stage 2 in that matter as well. I think that there are strong arguments either way. I recognise a strong view from industry. I recognise a mix of views from local authorities as well. As I have said, what I want to ensure is that, yes, we can have a system that is fair and progressive in terms of the levy that is actually applied equally, but it is efficient and straightforward to minister and does not impose undue burdens of compliance, particularly on smaller operators. Thank you for that response, minister. You talk about consistency and some of the things that we have heard. We had witnesses in that look to the international models and in one place that we have seen that both flat rates and percentages have been applied. If there is something that you end up going in the bill down, do you think that it would be you setting it, whether it is a flat or percentage, or whether it would be the local authorities? At this stage, my view would be that it would be for Parliament to determine legislation whether or not the model is a flat rate or a percentage. Again, I am not wanting to rule any particular position out. I am open to hearing what views are because I recognise that there are a range of views. A compromised position is potentially to allow for local authorities to determine themselves, but I am conscious that there may well be a view from industry that that would just add further complexity. One of the motives for a flat rate is because of the complexity involved in administering a percentage rate, particularly for smaller operators. If we are a set of circumstances whereby there was variation between different authorities between flat rate and percentage, that would not address that issue around complexity. I would want to explore that in further detail, in a way that it is consistent with the new deal for business and the new deal with local government to understand what the views of both local authorities are and businesses. I recognise that for industry there is a clear lean towards a flat rate. I recognise that views for local government are mixed. My own views on what we set along will ultimately be a matter for Parliament to determine in legislation. From my perspective, I think that there should be consistency in what Parliament lands on. It should either be a flat rate or a percentage. Again, I am not wanting to pre-empt further discussions with colleagues in local government to understand what their views are, but I am conscious that, if we were to change what is introduced in the bill, i.e. moving from a percentage to a flat rate, with the stated objective of simplifying administration, that would be undermined if we potentially took a approach that is further complicated, which could be through local discretion or some of the potential unintended consequences of having a tiered system of flat rates, which again can help to address some of the issues around it being a less progressive approach than a percentage that can add further complexity. I appreciate that there is a lot of complexity in that answer. I will be very keen to hear the sort of considered reflections of the committee in the report and I will be having further engagement with the sector and with local government ahead of the stage 1 debate and stage 2. My next question is around the national cap. While local authorities are not generally keen on a national cap, the tourism sector has made calls for a nationally set cap in the case that the percent rate remains the only option for local authorities. What is the Government's response to those suggestions? Well, clearly the question of a national cap is predicated upon what we have in the bill is introduced around a percent rate, so that that could potentially change depending on the news that Parliament takes as we move to consideration of amendments. I recognise why there are calls for a national cap, but I am also very much committed to this being about empowering local government and doing this with local government consistent with the new deal with local government. While we are a number of powers within delegated powers within the legislation that allow ministers to amend and specify details of what is required in legislation, those are useful provisions to have that would help us to respond to circumstances and changes going forward. A national cap, which I appreciate could be perceived and may well be regarded, is an intrusion into what would be the autonomy and decision making space of local government, because part of the process of consulting and engaging is for local government to assess the impact that a visitor levy would have. Clearly, in determining should it go forward as introduced with a percentage rate, local government would want to consider what the economic impact would be and recognise that there is a balance between a percentage level that would raise sufficient revenue to fund that reinvestment in the visitor economy set out in the scheme, but not a level that was so excessive that it could start to have a negative economic impact. I would want to trust, as we all would, that that is a decision for democratically accountable elected members in local government to take, but I recognise the concerns that industry has. Again, this is something that I am keen to have further dialogue on in further engagement. It is very important to me that we do this in a way that is as collaborative as possible. That includes business and with local government, but equally to hear what the views of Parliament are. My view would be that it is a decision for local government to take, but I recognise the concerns that have been raised and I want to explore that further with local government, with business and, of course, to have an opportunity to reflect on what the committee's views are on the matter. I want to come back on the flat rate and percentage rate, because I feel that something interesting came up in our previous panel with COSLA, which was the request for ultimate flexibility and to be able to either choose at a local level, flat or percentage. I take your point and also the point that other people have brought in that what we are trying to do is create something that is user-friendly, simple, efficient and that kind of thing, but I wondered if there had been any discussion and also COSLA said that there are on-going discussions in quite a number of areas. I wondered if there has been any discussion around the potential for an IT platform that could make the process of calculating, collecting and auditing. If a local authority went for a flat rate and another one went for a percentage, there is a digital IT platform. COSLA mentioned that, and they are exploring that with the COSLA digital IT team. If there was a platform that would then take out the difficulty because we are using IT to help us with that, I wondered if the expert working group had discussions about that and exploring that possibility. I do not believe that the expert working group has had specific discussions in that area. More broadly, digitisation of public services is a significant area, but there are not many committee sessions. It is also being discussed as part of our broader work and engagement around changes and improvements to the administration and operation of a non-domestic rate system, for example. That is more of a medium to longer term piece of work. That is a live matter. It is something that we would have to be considering around timelines when such a system would become operational and scope. I also recognise that. Again, this is an interesting point with regard to the variation between authorities. The bill allows for two or more authorities to work together to develop a visitor levy for a particular area, or something that has a particular interest to our national parks, for example. There are a number of different factors to consider in that regard. I am conscious as well that should the bill progress through Parliament and be approved in a reasonable timescale, then the earliest visitor levy would become available, or become online rather, would probably be the first half of 2026. It would be a question about whether any new platforms as such would be developed and operational by that point. In terms of the actual administration from a local authority perspective, those are discussions that I will be keen to pick up on in considering amendments ahead of stage 2. I appreciate the point that was made by local government colleagues on ensuring maximum flexibility, but we all recognise that if we want to ensure a system that can command the full confidence of business and that we are ensuring that the operation of the system is as straightforward and streamlined as it can be, allowing local autonomy so that ultimately the revenues that are raised can be reinvested in a way that is most impactful and gets the biggest return on the investment for the visitor economy. I hear the point about being streamlined for business and I can remember back to the evidence session when we had local authorities and we had Edinburgh. The two of our local authorities are most impacted by tourism, Edinburgh and Highland, Edinburgh wanting a percentage and Highland asking not only for a flat rate but to be able to bring in that tiering system. It is interesting that we are not getting a consistent picture across local authorities. Obviously, there is a local need and they have been looking into it. Both of those local authorities are quite far down the line in terms of having done work and the keenness to bring that in. It is important to consider their perspectives, but I really take the point that any kind of creation of a digital platform that would work that takes time to implement. I am now going to bring in Marie McNair. On the announcement that the Scottish Government may seek to amend the bill to include cruise ships, I welcome your earlier comments on the proposed consultation. What engagement there was with the cruise ship industry and the port authorities prior to the announcement that was made? There has been some discussion and engagement. This was something that is not an entirely new proposal. There had been various advocates for it over a number of years, but what we have undertaken is having made that announcement consistent with our approach in the new deal for business to have that detailed engagement going forward. There is already a working group between the Scottish Government and the COSLA officials that is looking at the matter. Clearly, with regard to any potential amendments to the bill, to make provision for a cruise ship that will be determined by the pace of progress, we will need to have a public consultation. It is of vital importance to colleagues in the COSLA Government that we are able to subject to the agreement of Parliament past this bill in a way that would allow the powers to come online, as we hope to be, for the early part of 2026. I would not want to find myself in a situation whereby, because of the further work that is required and the development of a cruise ship levy model, that that would hold up the work of this bill. As I said, if we make sufficient progress and we are able to complete that public consultation and have that level of engagement required with industry, with local government on a cruise ship levy, it is open to look at amending the bill to include that provision, but it is very important that we get that right. I would not want to unduly rush it, and if it takes more time, I would not want that to hold up the progress of this bill through Parliament. Some of the rural areas—there is one criticism of the bill—is that some of the motor homes and world campers are not covered. What work would the Scottish Government do to explore how those visitors could be included in the scope of the bill? There are other areas in terms of the issue around motor homes and world camping, which are covered in terms of managing some of the challenges that arise from that elsewhere within our overall work in tourism and the visitor economy. One of the challenges around motor homes, for example, would be determining what would be our administration and compliance enforcement. What is the chargeable event? There is quite a clear definition in the legislation about what the chargeable event is and over my accommodation. Motor homes that we are going to, for example, a campsite, etc. are subject to a visitor levy and paying for a benefit. That is captured. The points around where that is not taking place, the question would be how would you administer it? I am conscious that we are not familiar with many examples of any of a particular levy on their charge on motor homes. I think that New Zealand is correct, but we have a very defined geographical area with a single point of entry. I am open to having further discussions on that, but I think that there are some particular challenges around administration and trying to find a way in which that can be consistent with the way in which the bill is drafted. As I said, we spoke a lot about ensuring that we have a system in place, which is straightforward for business. Similarly, for the tax authority, the local government, in this case, we want to ensure that as well. I do not know if there is anything that you want to add about motor homes and camper vans. No, there is work under way. The fifth management group led by Visit Scotland has been established to seek a cross-government approach to addressing the issues that can sometimes be around motor homes. There is work under way on that aspect. I echo the minister's point that we are open to engagement and discussion with stakeholders on this, but we are very aware that the chargeable event looks very different than the chargeable event that is currently in the bill. Thank you for that. Finally, the committee heard suggestions that there are certain providers currently covered by the bill that should not be. The vote moorings. Minister, would you like to respond to those suggestions? I have been very grateful for the engagement of the sector, particularly our parliamentary colleague Stuart McMillan, who convenes the cross-party group on recreational boating and marine tourism. I had a meeting with that group earlier in the autumn, and they raised a number of issues. I am again grateful to Mr McMillan, who is convening a round table with the sector on Friday, which I will be attending to have further discussions. Clearly, there was concern expressed that the legislation may unintentionally capture certain activity, but it was not consistent with the policy intention. We are having close discussions to ensure that those issues are fully understood and, if required, we would bring forward amendments to clarify the position at stage 2. I am very familiar with the concerns that are raised by the sector, and I recognise them. I am very grateful for its engagement. We will be taking that forward indeed on Friday of this week to ensure that there is no unintentional capturing of particular activities that would be inconsistent with the policy intent of the legislation. Minister, you said in your opening statement that it is important that the levy has to be spent in the local authority areas, so I wanted to ask a question around last week. I raised some concerns, and I also raised it earlier on with the witnesses that the revenue from the visitor levy would be used to plug holes in council budgets. It is a very grey area. How would you respond to concerns that, in essence, the tourists and businesses are paying the price for the Scottish Government's inability to give our councils a fair funding deal for years? Do you agree that the revenue should be ring-fenced for tourist-related spending, and how you foresee that that works in practice, especially how it fits into the spirit of the Verity House agreement? The revenue that is raised through the visitor levy is not intended to be a substitute for any other revenue. Indeed, the revenue that is raised has to be hiked for spending on facilities and services that help to support the visitor economy. There is a clear definition of that within the legislation. Local authorities have to account for it separately, they have to publish a report and they have to review it after three years. Prior to the introduction in terms of proposing a scheme, there is a requirement to set out what the objectives are of the scheme, and the objectives have to be consistent with the definition in the bill of supporting the visitor economy. That is clearly set out. If there are particular concerns around the specific wording or the definition that is used by industry, I would of course want to have that discussion engagement to ensure that there is clarity. What we have sought to do in the legislation is to be very clear that revenue that is raised from visitor levy is accounted for separately. There is transparency about how it is spent in terms of the intention and the reporting on that. Decisions around how a scheme is developed, i.e. what the specific local objectives will be, will be determined through Bible local authority, through engagement and consultation with accommodation providers, DMOs, businesses and communities in their particular area. If there are concerns around the wording, I am more happy to hear that specifically, but the clear policy intent is that revenue that is used is there to support the visitor economy. That is paramount importance to me. Equally, it is ensuring that there is a balance there between giving that confidence and certainty, but also recognising the degree of flexibility that is required so that local authorities can respond to the assets and needs of their particular area. Again, that is something that, if there are concerns around any specific aspect of the wording, I am more unhappy to have that engagement to ensure that we have wording that commands the confidence of both local government and business. Thank you for that response, minister. Minister, how would you see that working with grey areas? We have been speaking in the past couple of weeks about things like bins, roads and potholes. One would assume that day-to-day that would be the council's responsibility, and obviously they are in cuts. Obviously it is used for tourism as well in the visitor economy, the roads and the bins. How would you strike that balance that day-to-day work has not been taken from the levy rather than should be from the budget? It is an absolutely fair and reasonable question. We could be a temptation known responding to start to get into a prescriptive list of what is within scope and what is outwith scope, and that would clearly be countered to the intention of a bill that is out of the fiscal empowerment of local government for them to determine how that revenue is spent consistent with the legislation. I would also not want to prejudge what those involved in the visitor economy might regard in a particular area as priorities for their particular area. I recognise the concern that you expressed. We could be too liberal in the interpretation of the legislation and, as such, the revenue would not be used in a way that was felt to be consistent with the principles of the bill of support in the visitor economy, but that is why we have the provision around consultation. It has to be that the council, a local authority seeking to introduce a visitor levy, would have to set out a scheme consistent with the objectives. It would have to be consulted on with businesses, with the community and that would capture all of the various parties and interests. Local authorities would have to set out what they believed the impact would be and then they would have to report on it, so there would be that transparency and clarity. Ultimately, those decisions will be taken by elected members who are democratically accountable to their electorates. As I said, if there are specific concerns around the wording, I am more unhappy to have those conversations, where I would not want to get into a situation where ministers are starting to devise prescriptive lists of what is within scope and outwith scope. As well as undermining that local autonomy and accountability, which is at the heart of the new deal with local government and what the bill is seeking to do in terms of fiscal empowerment, it could have unintended consequences, because it is not for me to say what the priority is for stakeholders in the visitor economy in one part of the country. I recognise that that will be different, but it is a fair question to ask. If there are specific concerns around the wording, I would be more happy to explore that further to ensure that we get this right and that it can command confidence. Continuing on the theme of how revenues will be spent, I will bring in Stephanie Callaghan, who is joining us online. Thanks very much, convener, and thank you for coming along, minister. The bill requires that money raised should be spent on services benefiting those visiting the local authorities area for leisure purposes. Can you comment on why this requirement was included? Secondly, we heard from Mirren Kelly earlier that business visitors might have specific requirements around travel, for example. I wonder if you see a need to widen those objectives, perhaps including business as well as leisure, or should the original plans around engagement and scope satisfy this? Thank you very much. It is an interesting question because we can see that we could be attention to broadening the definition. I can also be asked to narrow the definition and what we have reflected. I am not saying that we have necessarily nailed it and got the Goldilocks zone just perfect, but I think that we have got pretty close to it. However, I reiterate that commitment to have further engagement with industry around the wording and with local government, too. I think that the point around business visitors is an important one, particularly given that we have such a strong events sector in Scotland. It is something that we have to be cognisant of. On why the requirement is within the legislation, the policy in 10 has developed over a number of years that this is specifically about generating revenue for the visitor economy, as opposed to a general revenue raising tool. If we were to move into a general revenue raising tool, we would have to recognise that there is significant variation on the size of the visitor economy between different parts of Scotland. Yes, that does mean a different economic impact, but with a visitor levy applied in such a context, that would create quite significantly different and varying revenue-generating opportunities. If it was a general power, that would understandably invite questions around equity and fairness and how that would play into the overall local government funding formula. However, that is not what the legislation is about. It is about creating a discretionary power for local authorities that can raise revenue from the visitor economy to support investment into the visitor economy. I would hold with the ambition of increasing the offering and ensuring that we have a sustainable future for our tourism sector to enhance that world-class offering that we already provide. I am not sure if you can hear me. I apologise. It is good to know that there is still that openness and listening going on there as well. That might welcome in on my second question as well. The Scottish Tourism Alliance would like to see the national parks receiving a fair share of investment from the revenue that is raised from the visitor levy clearly. Do you have any ideas on how that might work in practice, potentially with one-park authority having up to five local authority areas? I wonder if you get any views on the potential for perhaps a regional levy scheme or something else. Yes, I have met both of our national parks and had very useful discussions. One of the things that I am taking away from those discussions and again, I would be grateful for the committee's views on that, is to consider whether there has to be any further provision within the legislation around how national parks are engaged with, but recognising that this is a scheme for local authorities to administer as a tax authority. Within the legislation that was introduced, as I touched on earlier, there is that ability for local authorities to or more local authorities to work together. You can imagine, for example, that the shared areas of a national park could work together to develop a specific levy that would cover a national park. That would be a decision for individual local authorities working together collaboratively. Similarly, on that point around the regional approach, again, that provision within the legislation to allow local authorities to work together would allow for a number of councils to collaborate on a visitor levy and to make decisions around how, through consultation and engagement, most meaningfully and impactfully to utilise that revenue within their particular region, we will ultimately be decisions for individual local authorities to take. I will notwithstanding that, I would reiterate the point. I will be considering what further measures may be required to ensure that the voice of national parks is appropriately recognised, including necessary on the legislation. However, I think that there is sufficient flexibility there. What I am keen to ensure that, in terms of the framework that the legislation provides, is something that is straightforward to administer as it possibly can be while retaining that flexibility to allow local authorities to respond individually or collectively to the needs and assets of their particular area. I am not going to bring in Miles Briggs. Thank you, convener. Good morning, minister. Good morning to your officials as well. I just wanted to get a piece of clarification with regard to cruise ships, because two weeks ago your Green Minister colleague was quite clear that it would be part of this bill. I think that what you are saying today is that there will need to be a consultation and, given the fact that we are scrutinising the bill, it is probably unlikely that it will be included in this legislation. Is that right? To be clear, the world requires to be a public consultation. Again, if we make quite quick progress and at pace, and depending on the parliamentary timetable for this legislation, there may be the opportunity for amendments, but equally, I do not want to unduly rush the development of a cruise levy proposal and for that to have any impact on the projected timescales for this legislation. My questions were in relation to exemptions, and I have been trying to pursue throughout my work on that. The Government currently has a voucher scheme proposed in the bill. It is not being clear today how accommodation providers would be able to check individuals who do think that they are not eligible to pay a visitor levy. I just wondered what work was going on. I think that there has been broad consensus that some people should not be paying this. For example, people visiting children in hospital, people visiting family members in prison, and quite a broad range of people who should be exempt. You are answering quite a few questions of mine around this at the minute. I think that is quite important that we get that right before the bill goes into where it is going to be administered, and that is likely to be hotels and individual businesses. I just wondered what Government thinking was around how exemptions will work in practice. It is a question that gets to the heart of this national consistency, a local flexibility issue. I can appreciate if you may be formed in Parliament that there are certain areas that should clearly be certain categories of individual circumstances that should be exempt wherever, regardless of location. I am conscious of the importance of local autonomy and being able to decide what is best for their particular area. I am also conscious of ensuring that we can provide as much simplicity in terms of administration, both for local authorities and businesses as possible. The legislation allows for those exemptions to be determined locally. There is the work that has been undertaken by the expert group around best practice and guidance. It may be something that the expert group could consider as part of its work. In terms of getting the balance right, I want to ensure that there is opportunity for business communities and local government working together and engaging through consultation to determine what is the best suite of exemptions, if any, for their particular area beyond what is on the face of the bill. Is there anything that you would like to add? Just to add a couple of things on that. The expert group has had an initial discussion about exemptions. That is something that is very much in their work plan producing guidance on that. We, as in the Scottish Government, are trying to facilitate or we are facilitating a discussion between business organisations on one hand and local government on the other about the best way to administer any exemptions that are put in place. You are right that there is provision in the bill around vouchers. That is just there to create that as an option for a local authority or if it wants to go down that route. However, we do not have any set views on how exemptions should be administered. I think that it is maybe important that some clear works are done on this. I think that there are many. I think that we have had quite a broad number of people saying that they do want to see people exempt from this, but given the nature of what is an accommodation tax, not just about tourists and visitors, how that is going to be administered not within businesses or necessarily councils is really kind of there is no detail around that and a voucher scheme does not seem to cover that. I think that it is really important if it is taken forward that that is looked at. I wanted to move on to some of the criticisms that tourism organisations have made around the assumptions and calculations used currently within the financial memorandum to date and just wondered what the minister's view was on that, especially if you have touched upon some potential changing environments that we might see before this bill comes forward and what we have seen in relation to online platforms, credit card charging especially and how small businesses will actually be able to administer this. We have sought, particularly through the work in what is quite an extensive barrier, to detail what our understanding of the various costs would be both in compliance and administration. I think that we would just ask Alasher to come in to give a bit of background on how that work is being developed and what current understanding is. Yes, the barrier has been informed with engagement with businesses both from our 2018 national discussion and consultation responses from our 2019 public consultation. This was then followed up by 20 face-to-face interviews in 2019 with individual businesses from the overnight accommodation sector. Following the pause in the legislation being brought forward due to the pandemic, a follow-up survey was issued to these businesses with a particular focus on understanding the compliance challenges associated with specific proposals in the visitor levy bill. We have also been engaging with officials who have been involved in administering tourist taxes in Nice, Amsterdam and Toronto to understand the resources that are required to collect visitor levy type taxes in other contexts. In addition, we have also been engaging with third-party OTAs such as bookin.com, Airbnb and with property management system providers to understand how their systems will interact with the introduction of a visitor levy. Thank you for that. Have Government been in touch with the Manchester scheme as well? That is the only one that is currently operational in the UK. The thing with the Manchester scheme is that it is distinct and centre of business improvement district, as opposed to a local authority-administered visitor levy. There is consideration of a bid model given within the Bria. What we have sought to do and take forward in partnership with local government and engagement with business is a different approach where it would be administered by the local authority. With bids, we have a balloting process—I can create uncertainty about longer terms and stability of revenues—and it also comes with being a local government in the minister's scheme. The work that is on will be on-going with consultation requirements and the democratic accountability of elected members who have taken the decision locally. Although there are various ways in which they can be considered in meeting the objectives of the policy intention, a bid was not deemed as capable of doing that, hence we have taken forward the visitor levy approach for local authority. That is what we have set out in the bill. You must be aware of the discussion around the VAT threshold—the £85,000 threshold that has been discussed at several of the committee meetings in the fear that some of the smaller businesses might, because of the levy, push beyond the £85,000 limit and be subject to VAT. What does the Government have to say to those businesses that might fall into that particular trap? I recognise the points that have been raised. Clearly, VAT is a reserve tax and the introduction of the bill. I wrote to the UK Government who have responded, who have shared that correspondence with the committee, setting out the views that are expressed by the UK Government on the matter. Given that it is a local aid minister levy, it is something that local authorities, considering introducing a visitor levy, will have to take into account. Is that requirement to consider the economic impact of introducing a visitor levy set out within the legislation? That is something that local authorities will have to consider carefully. That speaks to the importance of the process of consultation engagement, which is required to proceed the introduction of a visitor levy. It is a fair and a legitimate point that is raised. It will be for local authorities, should the bill be passed, who are considering introducing a levy to take that into account in their decision making. I mean, some businesses were saying that they might be facing having to reduce the number of bed nights available to not pass this threshold, which kind of sounds as if it is running counterproductive to the aims of the policies. Would you say then that it is going to the local authorities to try to manage us, but frankly I cannot see how they can avoid this. VAT is paid on the levy and then that is chargeable and so on and so forth? There is a number of flexibilities around how a scheme can be developed, for example the particular areas within the authority, the timescales in which it applies and, as such, those would be flexibilities that can be applied to address a whole range of different aspects of considerations around how a levy should be administered and applied in a local area. However, there are flexibilities there in which local authorities could potentially deploy in response to some of those considerations, but it would be for local authorities to take into account the circumstances of those who are trading just below the VAT threshold, which I recognise as a consideration that many businesses, particularly smaller micro-businesses, have to take into account. Again, that speaks to reiterate the point of the importance of that consultation and engagement, and local authorities have been able to set out their understanding of the impact of introducing a levy that has been crucial to ensure that that is taken into account. On the issue of recouping administrative costs, we understand that the bill permits local authorities to do that, but we also understand that it does not permit local businesses to have any element of recouping costs. How does the Government see that particular issue? It has been discussed several times over the recent weeks. I am not aware of any tax operating in the UK whereby costs of complying with the tax can be reclaimed, but there would be nothing preventing a local authority from operating the levy as part of their way of supporting or reimbursing businesses for the cost of compliance, but that would be a matter for an individual local authority to determine. Do we have anything in any examples of tax that has been reimbursed? We are not aware of any examples in the UK of businesses being able to extract from the tax the costs of the administration, so there is no precedent for that that we are aware of. Is it correct to say that the bill allows local authorities to recoup their administration costs? The revenue would be net of administration costs that would be deployed in support of the objectives of the scheme, but there was nothing that would prevent a local authority from using a portion of the revenue that was generated from the scheme to support accommodation providers and their compliance costs. Again, that would be a matter for a local authority. It would be their discretion and something that local stakeholders would want to consider and engage for a local authority on, but it is a matter for the local authority. I just wanted to ask whether the legislation passes through the parliamentary process and is implemented. What is the key way in which we should measure the impact of the legislation? What should our successor committees be looking at in 10 years' time to see if the bill has had the desired effect? It is an important question and it does help to be thinking about post-legislative scrutiny right at the outset as much as we are still at stage 1 vote. There are two aspects. One will be the opportunity for continuous monitoring based on local authorities that choose to introduce a visitor levy. They will be required to report in that report 18 months after introduction of an annual review after three years. That in itself will provide a degree of data that can be interrogated and analysed in terms of understanding how the visitor levy is operating in particular areas. Through the work certainly on the new deal with local government in Verity House and that close engagement with local government, clearly any issues that were to arise or suggestions for improvement on the way in which the framework for the administration is set out in legislation would arise. Through that parliamentary engagement with local government in COSLA, there would be opportunities where, through the cumulative process of different local authorities taking forward this levy, what the learning had been in any suggested improvements and ways in which the impact could be measured cumulatively across Scotland as well as within individual local authorities, that opportunity would be afforded. Equally important, certainly from a government perspective, through the new deal for business and that close engagement, there would be these opportunities for feedback and consideration, including how any cumulative impact that a visitor levy would have in relation to other legislative or regulatory requirements. Again, relevant committees in the Parliament engaging with business would have that opportunity as well, but in terms of being able to anchor that objectively in data, the reporting and review requirements set out in the legislation for local authorities would be able, in that first instance, to give indication of what impact a visitor levy was having. Indeed, as a visitor levy in a specific local authority, is it meeting the objectives that are set out in the scheme? Over time, as we go through this process and learning takes place, there will be a process of learning and engagement for any local authority that takes forward the visitor levy. There will be opportunities for local authorities through that consultation with business and their communities to determine what works best. Through that review process, there will be reflection on what has worked well and what perhaps has not achieved the aims that are set out. That would inform future iterations of the visitor levy should a local authority choose to continue with it. Through the review and reporting and through the on-going dialogue that takes place between business, local government and Parliament, and similarly with the Scottish Government, I think that there will be ample opportunity to evaluate and measure the impact of the legislation that is going forward. I would imagine that it is something for local authorities to perhaps ask in their consultations. I just want to bring in Stephanie Callaghan, who has got a supplementary on this matter. Thank you, convener. Minister, there does seem to have been limited thought around data collection to measure the success. While that will be delivered by local authorities, I can imagine that the Scottish Parliament will be asking the Scottish Government for evidence of this bill's success. I would be really interested to hear any thoughts that you might have already on what quantitative or qualitative data might be key to measure what is working really well. Just for clarity, are you saying that there is likely to be a common framework for measuring that key quantitative and qualitative data across all local authorities that are participating? First, I would say that local authorities routinely consult and engage on a number of issues near the best place to determine how that process is carried out. This would be a local government scheme that is operating within legislation determined by Parliament. I think that Parliament will take an interest in how that is operating. I imagine that future committees will want to explore post-legislative data. In terms of being a local power and, as I have said before, the various requirements around consultation and reporting, there is that transparency there. I imagine that the consideration will be particularly given to what the stated scheme objectives are for deployment of revenue generated from the visitor levy and whether or not those objectives are met and if they are to what degree they are met. That, in itself, will inform, as I touched on earlier, future iterations of the visitor levy, should a local authority seek to continue with it. I imagine that local authorities, and I imagine the expectation of business and communities following the introduction of the visitor levy, will be keen interest in continued engagement with local government. Those are all the same matters for individual councils to consider in a way that is consistent with the legislation. For that to be a success, it will require that collaboration and that partnership working that is inherent in the requirement to consult and engage. I know from my engagement with local authorities who have expressed an interest in taking forward the visitor levy, there is a strong desire to work in partnership with the communities and the businesses that they represent to ensure that that can be a success. However, the important things around the clearly setting out through consultation and the scheme of what the objectives are and the reporting on that gives that important data to then evaluate and measure on specific objectives. Clearly, there can be further work undertaking over perhaps a medium to longer term in terms of economic impact and analysis of whether those interventions and those objectives have proven successful in being able to enhance the economic performance of the visitor economy in a particular area. Those will be matters for local authorities to determine, just as all Governments will routinely review their broader suite of policies. I suppose, minister, that sometimes I haven't been a councillor at local authorities myself. Sometimes we find ourselves kind of comparing apples and pears because authorities measure different things according to their priorities. I just think that it would be good to have some comfort that there will be that encouragement for all those local authorities that are participating to agree some of the key data that they are looking at, so that we are not looking back in a couple of years' time and scrambling to try and find comparable data from across different local authorities. I imagine that there will be a desire from local authorities to learn from what other authorities are doing. It's used to take forward a visitor levy, particularly authorities that are local to each other or share particular characteristics of their visitor economies. I think that what's important with the reporting structure that we've set out in legislation and the fact that it's for local authorities as a local administrative power to determine is recognising that the visitor economy will be different in Edinburgh to what it is, say, in parts of the Highlands, and it allows for that local evaluation of the effectiveness of a visitor levy. These requirements around transparency with that separate accounting, consultation, reporting and review will ensure that there's a fair and a fair evaluation of how a scheme is operating, which will be transparent and available for all who are interested to engage with and consult with and to base their further engagement with a local authority on the visitor levy. There must be some kind of, although there's nuance on the need for local flexibility, you could probably get three things that could be in a framework for reporting on that would touch all local authorities and then have that flexibility around it, but I take your point around maybe this is something that COSLA needs to be looking at rather than it being in legislation that the Parliament agrees on. That would be a matter for COSLA and local government. I certainly would imagine that we would be a recognition that we can all learn from each other and local authorities will be keen to understand, if they're considering introducing a visitor levy, will be keen to understand what experience of other authorities have perhaps already introduced one. I think that our interests would be for Parliament to determine, but I can imagine being able to respond to that aggregate feedback. In terms of how the actual administrative framework that is provided for by the legislation is operating, and of course in the medium to longer term, considering the broader national impact it would have upon Scotland's visitor economy, those will be matters for Parliament to determine. Certainly, in Government, we will, subject to the legislation passed by Parliament, we will continue to engage closely through the new deal with local government on needs, matters and other shared priorities. Thank you very much for that. I really appreciate you all coming in this morning. Minister, thank you so much for your very thorough and in-depth responses. I do get a sense of a few areas where we've touched on questions where there's a bit more work that needs to be done, and that would be interesting for us to consider in our report and reflect back to you. I'm very grateful for the extensive work that the committee has undertaken on that matter, and I do say with all sincerity I'm very keen to understand what view the committee arrives at on some of those questions. My absolute priority is to ensure that we get that right, and that visitor levy can be a real force for good for the visitor economy in those parts of Scotland, which I choose to introduce. I think that Katie, achieving that, will be continued close working in partnership with local government, with business and with Parliament. That's very welcome. Thank you. That concludes our evidence taking on the visitor levy Scotland Bill, and the committee will produce a report on its findings in the coming weeks. I now suspend the meeting to allow for a change over witnesses. The next item on our agenda today is to take evidence on the council tax fees from the Minister for Community Wealth and Public Finance. Mr Arthur has joined for this item by Ellen Lever, who is the deputy director of local government and analytical services division, and I welcome our witnesses to the meeting. We had also hoped to hear from COSLA on this topic, but, unfortunately, they were unable to attend today, and we hoped to hear from it at a future meeting. We're just going to go straight to questions. It's interesting, because we did have COSLA online for this session earlier on the visitor's levy. It was good to hear from Councillor Gail McGregor that in that process there had been good communication between COSLA and the Scottish Government, and they sounded very positive about that. What is interesting now is that local government wasn't made aware of the decision to freeze council tax prior to it being announced. I'd be interested to hear from you your thoughts on how that's impacted the relationship between local government and central government. I thank you very much, convener. I'm grateful for the opportunity to answer questions on this issue. We recognise the views that have been expressed by local government since the First Minister's announcement on council tax freezing. Both the First Minister and the deputy First Minister have met and had engagement with COSLA since that announcement was made. What I would recognise is that the Verity House agreement, which underpins our new deal with local government, is broad and wide-ranging. The fiscal element is just one part of that. Council tax is just one part of the fiscal element, and indeed the council tax freeze is just one part of our considerations against council tax. The committee will be aware of the work that has been undertaken through the joint working group on sources of local government finance, funding and council tax reform. We are committed to engaging constructively with local government colleagues in COSLA to ensure that we are able to successfully implement a council tax freeze, which I think is a shared understanding, would be of benefit to households who are struggling right across Scotland. Thanks very much for the response. You mentioned the Verity House agreement and the fact that fiscal arrangement is only part of it and council tax is only part of the fiscal arrangement, but I would be interested to hear what your thoughts are on the impact on trust. Are you confident that trust can be maintained between the local government and the national government? Yes, I am. As I said, we recognise the views that have been expressed by local government, but there is also a shared recognition of the opportunities that the partnership model that is embedded within the Verity House agreement affords local and national government in taking forward shared priorities, including in the area of council tax reform, which I know is of a keen interest to this committee and Parliament more widely and, indeed, COSLA and individual local authorities. We are committed to that partnership working right across all aspects of the new deal with local government, and specifically with regard to council tax freeze in ensuring that we can implement that in a way that meets the requirements set out by the First Minister of the being fully funded and delivers a freeze, which will be of benefit to people across Scotland. Thanks very much for those responses. I am now going to bring in Pam Gosall. Good morning to the official. As you have mentioned, one of the primary principles of the Verity House agreement has been violated less than four months after the agreement was made. A key part of the agreement centres around the robust and regular process for early budget engagement that will be embedded in the physical framework. However, the First Minister neglected to inform COSLA beforehand, when he said during his speech at the SNP conference that council tax would be frozen for the upcoming year. Is this the Verity House agreement even worth the paper that it is written on? If so, how is it failing to consult on the decision to freeze council tax in keeping with the principles of the actual agreement? I very much recognise the views and appreciate the concerns that have been expressed both by you, Ms Gosall and, indeed, by colleagues in local government. We are committed to ensuring that, specifically on the delivery of council tax freeze, we do that in partnership with local government in those engagements that we are very starting to take place, as I mentioned previously, with the First Minister and the Deputy First Minister, who have both met with COSLA to discuss the matter specifically. As I touched on in an earlier answer, the Verity House agreement that we knew deal with local government is significant and wide-ranging. There is, for example, on specifically fiscal matters, early engagement taking place in discussions around the budget, and there is a shared recognition that this presents to tremendous opportunity to advance what our shared agenda and our shared priorities around ensuring that we have sustainable public services, tackling net zero and a fair and just transition to a net zero economy. So, while I recognise the particular views that have been expressed and the concerns that have been raised, I am confident that there is that shared ambition to deliver on the vision and the priorities that are set out within the Verity House agreement, and we are certainly committed to taking it forward in that spirit. Obviously, you have explained the fact that this has happened, but how do we make sure that this never happens again? Is this something in assurity that the First Minister or the Scottish Government is giving that this went ahead, the council tax freeze, without any consultation with any local authorities? We have heard their views in here, but we have also heard their views outside as well, that leaders and CEOs are not happy with local authorities that this went ahead without their decision. I understand the thinking behind it, freezing council tax, but what is so important is that relationship. Are you saying that this is a one-off thing that will never happen again and the Government is looking at that something like this never happens again? We both recognise that there may be particular circumstances that can arise. However, we are jointly committed to the values underpin the Verity House agreement. We want to operate and we want to work in a way jointly in partnership that is consistent with the approach that is set out within the Verity House agreement, and that is how we will seek to go forward. To continue to build upon the progress that has already been made in short order since the agreement was reached. Thank you very much for those responses. We continue. We are obviously very concerned about the relationship with local authorities, and I would like to bring in Willie Coffey. Thank you very much, convener. Good morning again, minister. Tom, you mentioned that the measure that was announced in the council tax freeze is just one part of a broader and wider agreement within the Verity House, so it is really to pick out what your views are about continuing development and discussions with COSLA on that. We know that they have not set out their view yet as a body to us, and that is why they are not here to do it, but could you just develop a little bit of the conversations that are going on with COSLA? You mentioned the FM and DFM or in discussion with COSLA, so from your own perspective, how is that progressing in terms of the wider Verity House? It is progressing constructively, and indeed, as is the engagement in the three budgets. More broadly, the last session that we were considering the Visitor Levy Bill is an excellent example of the partnership working that is taking place with local government developing a proposition in response to what is a long-term ask from local government. We again touched on the cruise ship levy that we have committed to. Again, this is a proposition that was raised by local government, and it is something that we are responding to positively. I lead on and have direct responsibility in the relationship around aspects of local government finance. I am committed to working in partnership with local government colleagues to look at the opportunities that we have to further increase the fiscal empowerment of local government. That is reflected not just in the Visitor Levy or in the cruise ship levy that we have committed to, but also in the work that we have undertaken already on reform to the aspects of council tax, for example, around the levy of the premium on second homes and the consultation that we undertook in that area. We are making progress, and I know that my ministerial colleagues and other portfolios covering a wide range of areas could speak to where they have seen significant progress through that partnership working approach. That is something that we are certainly committed to recognising the huge opportunities afforded to us by that approach of working in partnership and with mutual respect for local government colleagues. We know that the freeze is bound to have an impact on the fiscal framework going ahead, but we know that we will not see that before the budget. Has the Government made any analysis, even at this early stage, about what the impact on the fiscal framework of the freeze might be? In meeting that commitment of ensuring that the freeze is fully funded, we will be engaging constructively with local government to determine what that quantum should be. That is a process that will be on-going. Decisions on the broader fiscal settlement will be taken as part of the budget process with the budget statement to Parliament next month. We will move on to a theme around the reason for the council tax freeze, and I will bring in Stephanie Calhann, who is joining us online. Minister, how do you respond to those who say that the council tax freeze is regressive and that it does not benefit the poorest in society? What you see has been the benefits of the council tax freeze. I think that there is a shared recognition of the inherently regressive nature of council tax overall. The council tax freeze will benefit everyone who pays council tax, and we can understand that for those in lower incomes it may well represent the higher proportion of their income as well. I think that all of us around this table would recognise in our role as representatives in our respective constituencies and region that there is really no part of society, no part of the people that we are elected to serve who have not been touched in a quite significant way by the impact of the cost of living crisis. That is certainly something that has been reflected to me in conversations that I have had with those working in advice and in money advice, for example. I think that the council tax freeze can give people certainty at a time when we have seen significant fiscal pressure arising from the cost of living, and it is a policy that I know will be welcomed by households across Scotland that is providing that certainty going into the next financial year. I have to agree, Minister. I think that that certainty is really important for people. I wonder if you could speak to any lessons that have been learned from the last council tax freeze and how effective it was in tackling inequalities and any evidence that you have on that. We know that council tax in Scotland is significantly lower than it is in England, for example. That is ultimately money that stays in people's pockets. It is money that people can use to meet other costs that fall upon them. It is money that they have at their disposal to spend in their local communities supporting local businesses. We recognise views around the need for looking at longer-term meaningful changes to the council tax system, but what that freeze does do in responding to the acute pressures that so many are facing in this cost of living crisis is, as I have said and has been acknowledged, to provide that certainty. Of course, in determining the quantum of meeting that council tax freeze, that will be undertaken through negotiation and engagement with COSLA. Thank you very much for those responses, Minister. I am going to bring in Miles Briggs on the theme of the powers to freeze council tax. Thank you, convener. I wanted to ask with regard to the powers that the Scottish Government has to do at full national freeze, because it appears that the Scottish Government does not have the necessary powers. Just like previous freezes, that has been under concordat with councils. Are you confident that you will be able to affect a council tax freeze across Scotland? What else do you plan to bring forward to incentivise councils to buy into that? We are seeking through working in partnership and engagement with local government to achieve the council tax freeze. I base on a shared recognition of the points that I was touching on earlier. That is something that can have a meaningful impact to households right across Scotland. The approach that we are taking is one through negotiation and engagement. That is something that will be on-going. Through that particular process that we will seek to and will deliver, I am confident, through partnership working with local authorities on that council tax freeze. Currently, this year's council tax is an average of about 5.5 per cent increase. Some councils were talking about 10 per cent last year. Orkney, for example, set a 10 per cent increase. It is quite clear that there are different councils with different financial pressures. My own here in Edinburgh receives one of the lowest funding per head of population. How would the Government respond to a local authority who says that no thanks instead want to increase council tax, so in theory there would not be that national freeze delivered? We recognise that local authorities have, in previous years, set council tax at different rates. They will have had their own planning assumptions ahead of the next financial year. That is why it is very important that we have a process of negotiation and engagement through that to arrive at a quantum that is fairly representative of what is required to meet that council tax freeze. We are very much committed to working in that space closely and collaboratively to identify what an appropriate quantum should be and through that to achieve the outcome of the council tax freeze for all households across Scotland. What would the maximum quantum look like? I think that 5 per cent would be £148 million, 8 per cent would be £470 million. The Government is 10 per cent or 15 per cent, where are the Government in terms of what money will be on the table for this? I do not think that it has been outlined how much we are actually talking. The Scottish Government will fund this policy with. I would not want to pre-empt what the outcome of those negotiations would be. We are entering this in the process of commitment to working and engaging closely and collaboratively to identify that. We will have those discussions with our colleagues in local government to ensure that we can meet that requirement that this is fully funded. As you touched on, the recogniser will be a range of planning assumptions that will have underpinned local government decisions around where they may have been, where they want to go with council tax. We will allow for that opportunity to take place of negotiation and engagement, and that is what will ultimately inform how we arrive at what is a fair and representative quantum to deliver that council tax freeze. According to the calculations made by Fraser of Allander Institute, the freeze was collectively cost councils around about £148 million next year. Assuming council tax would have increased 5 per cent as it did last year, additionally councils would receive around £417 million if they were to strike a deal that gave them around 8 per cent rise. Surely the Scottish Government has carried out some kind of analysis for making a commitment to fully fund the freeze. How much does the Scottish Government expect the council tax freeze cost and, more crucially, where will the money come from? As I said in response to Mr Briggs' questioning, we will have a process of careful and considered engagement and a spirit of partnership with local government to determine what the quantum will be, and I do not want to pre-empt that process. With regards to the resourcing of that particular quantum, decisions will be taken as part of the budget process, and the Deputy First Minister will set out the budget to Parliament in the statement next month. One more question around the First Minister's giving commitment to fully fund the freeze to ensure councils can maintain their services. Despite offering no real clue as to where the money will come from, it is highly likely that different councils would have planned different increases in council tax in order to maintain services in their areas. Will the funds allocated to the local governments take into account that various council tax hikes that each local authority has planned? We will arrive at a position, as I have said, through engagement and consideration. We have committed to that engagement in those discussions. I think that, for me to seek to pre-empt what the outcome of that would be, the committee would not be consistent with the commitment that we have given and we are committed to fulfilling it. To reiterate, we will have those discussions and engagement in a spirit of partnership with local government, and through that process, we will seek to arrive at the quantum that is commensured with that commitment to fully fund the council tax freeze. Have you started talks with local authorities or are you going to start talks with local authorities on what that quantum will be? We are embarking upon that process. As I indicated earlier, the First Minister and the Deputy First Minister both met and engaged with Coesla following the announcement of the council tax freeze. When Opposition members, like myself, come to ask questions or maybe ask for additional budget, the first thing that the minister himself and other ministers will say, well, you need to identify where that funding is coming from. I just wonder what discussions the minister and the cabinet secretary for finance have had with other cabinet colleagues to identify where the funding will come from to fund the potential council tax freeze. Termination of funding will be set out as part of the overall budget process that is considered in that particular context. We will analyse what is announced next week in the autumn statement, which is a key to setting the envelopes that we will operate within and the respective forecasts of the OBR and SFC, which will set the context for which the fiscal environment that we operate within. Given that commitment, I have set out the process by which we will arrive fully funding the council tax freeze. In terms of the broader determinations around funding allocations, that will take place through the budget process. The Deputy First Minister will set out that position to Parliament next month. The minister has just said that the council tax freeze will be fully funded. That is a commitment that has come from the First Minister as well. What is your understanding of what a fully funded council tax freeze means? As I stated earlier, I would not want to pre-empt the outcome of the discussions and negotiations that we have committed to with local government. Through that process, we will arrive at a quantum that will fully fund the council tax freeze. As I stated previously, for me to seek to pre-empt that would be to disrespect that process. I am not asking you to put a figure on it. I am just asking what your definition of a fully funded freeze will be. What does it mean for it to be fully funded? Again, that is why we have committed to having that engagement with COSLA. If I were to give a definition without having engaged with COSLA and having had those discussions, I think that that would be seen as presumptuous. That is why we have committed to that process of engagement, which we will undertake. That will provide a means by which we will arrive at determining what that quantum should be. You can understand that one person's description of fully funded and another may be different. I find it difficult that the minister can give a guarantee or a pledge that the council tax freeze will be fully funded. The First Minister has given that pledge, but without being able to say what a fully funded freeze looks like. That is why we require negotiation. The First Minister has also said that the commitment to fully fund the freeze means that councils would be able to maintain the services. Obviously, France planning would mean that councils are already planning which level of council tax they may have set in advance of that announcement. If funding falls short of that and councils have to either reduce services or make redundancies, what would be the Government's response to that? With regard to understanding what local authorities' planning assumptions were, that is why we have committed to that process of negotiation. Through that, we will arrive at a quantum that meets that commitment to fully fund the council tax freeze. I appreciate the line of questioning that you are pursuing, Mr Griffin. It is a perfectly fair and valid one to seek to interrogate me as a minister. It is important that, having given that commitment to a council tax freeze that is fully funded and delivered in partnership with COSLA, it is important that that process is allowed to take place of negotiation and consideration. I thank the minister for bearing with us on the line of questioning. I will bring in Marie McNair on long-term plans for council tax. I look forward to the longer term how the Scottish Government progresses in its ambitions to reform council tax. We have already made meaningful progress. I read a reference earlier to the consultation on council tax premiums for second homes. That is a commitment that we have jointly arrived at with COSLA and brought forward a legislation, which I understand that committee would be considering in due course. I think that it is demonstrative of the progress that we have made today. We continue to have engagement through the joint working group, in which we will be exploring ways in which we can meaningfully make improvements to the council tax system, including looking at options for longer-term reform. As part of that, we have committed to a process of deliberative engagement. We recognise that that is a shared priority with COSLA and we will be desire to further advance that work as we go into the new year. That brings us to the end of our question. Thanks again for being with us for two sessions this morning. It has been helpful to get your views on the council tax freeze and the on-going discussions with COSLA on the issue. Before we go into private, we have one final short piece of public business consideration of the non-domestic rating contribution Scotland amendment regulations 2023. There is no requirement for the committee to make any recommendations on negative instruments. Do members have any comments on instruments? No comments. Is the committee agreed that we do not wish to make any recommendations in relationship to the instrument? We previously agreed to take the next items in private, so that was the last public item on our agenda today. I now close the public part of the meeting.