The Principles of a Local Discretionary Transient Visitor Levy or Tourist Tax

6. Local decision making

This chapter sets out responses to the questions covering the processes local authorities should be required to go through before introducing a visitor levy, whether the Scottish Government should be able to prevent a local authority from applying a visitor levy, engagement with local stakeholders, whether revenues should be allocated in line with local tourism strategies, reporting arrangements and whether any revenue should have to be spent only in the area in which it was raised.

Local authorities wishing to implement a visitor levy

The consultation paper explained that once the necessary legislation has been put in place, each local authority will be able to decide whether to implement the visitor levy in all or part of its local authority area. The National Discussion suggested that, before they can decide to impose the levy, local authorities should be required to demonstrate that they have given it adequate consideration and made adequate preparations.

Question 19: A list of requirements that local authorities could be expected to meet before being able to introduce a visitor levy is summarised below. Do you agree or disagree with these options?

If you have any other suggestion for requirements, then please add these below together with your reasons.

Responses to Question 19 by respondent type are set out in Table 14 below.

Respondents were given the option to agree or disagree with each of 12 possible requirements set out in the consultation paper.

Support was at a consistently high level across all the options – ranging from 96% to 82% of those answering the question agreeing with the requirements. The requirement attracting the lowest level of support was a timeframe for introduction of at least one financial year following conclusion of consultation and engagement activities.

Table 14

Question 19: A list of requirements that local authorities could be expected to meet before being able to introduce a visitor levy is summarised below. Do you agree or disagree with these options?
Respondent type	a) Produce an initial statement of intention to consider introducing a visitor levy				b) A timeframe for introduction of at least one financial year following conclusion of consultation and engagement activities				c) Have held a consultation in their local area to gather views from all those who will be affected by the visitor levy
	Agree		Disagree		Agree		Disagree		Agree		Disagree
	N	%	N	%	N	%	N	%	N	%	N	%
Individuals	210	89%	26	11%	185	79%	49	21%	195	82%	43	18%
Accommodation provider (hotel)	46		1		46		1		46		1
Accommodation provider (other)	58		3		40		20		61		1
Business organisation	4				4				4
Community council or residents' association	4				3		1		3		1
Heritage or culture organisation	10				8		2		9		2
Local authority	19				16		2		19
Other	4				4				4
Other representative organisation	3				2		1		3
Other tourism or hospitality business or organisation	7				7				6		1
Port authority	2				2				2
Professional body	8				8				8
Public body	1				1				1
Tourism and hospitality industry representative organisation	8				7		1		8
Tourism development or promotion organisation	10				10				10
Trades union, political party or campaign organisation	3				3				3
Total organisations	187	98%	4	2%	161	85%	28	15%	187	97%	6	3%
All respondents	397	93%	30	7%	346	82%	77	18%	382	89%	49	11%

Table 14(continued)

Question 19: A list of requirements that local authorities could be expected to meet before being able to introduce a visitor levy is summarised below. Do you agree or disagree with these options?
Respondent type	d) Have conducted required impact assessments				e) Have assessed the administrative burden on businesses and taken steps to minimise this				f) If the legislation allows the rate to be set locally the local authority has demonstrated why the chosen rate of the visitor levy is optimal for that area
	Agree		Disagree		Agree		Disagree		Agree		Disagree
	N	%	N	%	N	%	N	%	N	%	N	%
Individuals	204	87%	30	13%	208	87%	30	13%	207	89%	26	11%
Accommodation provider (hotel)	46		1		46		1		45		1
Accommodation provider (other)	59		2		61		1		60		1
Business organisation	4				4				3
Community council or residents' association	3		1		3		1		4
Heritage or culture organisation	9		2		9		1		9		1
Local authority	19				18				16		1
Other	4				4				4
Other representative organisation	3				3				3
Other tourism or hospitality business or organisation	6		1		7				7
Port authority	2				2				2
Professional body	8				8				7		1
Public body	1				1				1
Tourism and hospitality industry representative organisation	8				8				7		1
Tourism development or promotion organisation	10				10				10
Trades union, political party or campaign organisation	3				2				3
Total organisations	185	96%	7	4%	186	98%	4	2%	181	97%	6	3%
All respondents	389	91%	37	9%	394	92%	34	8%	388	92%	32	8%

Table 14 (continued)

Question 19: A list of requirements that local authorities could be expected to meet before being able to introduce a visitor levy is summarised below. Do you agree or disagree with these options?
Respondent type	g) Have appropriate mechanisms in place to allow visitor levies collected to be remitted to the local authority				h) Have made information about the visitor levy and how to pay it available and in the public domain, for both business and visitors				i) The approach to collaborative decision making on revenue spending is set out in the public domain
	Agree		Disagree		Agree		Disagree		Agree		Disagree
	N	%	N	%	N	%	N	%	N	%	N	%
Individuals	215	91%	20	9%	221	94%	15	6%	211	90%	24	10%
Accommodation provider (hotel)	46		1		45		1		46		1
Accommodation provider (other)	61		1		61		1		60		1
Business organisation	4				4				4
Community council or residents' association	4				4				4
Heritage or culture organisation	9		1		10				9		1
Local authority	19				19				16
Other	4				4				4
Other representative organisation	3				3				3
Other tourism or hospitality business or organisation	6				7				7
Port authority	2				2				2
Professional body	8				8				7		1
Public body	1				1				1
Tourism and hospitality industry representative organisation	8				8				8
Tourism development or promotion organisation	10				10				10
Trades union, political party or campaign organisation	3				3				3
Total organisations	188	98%	3	2%	189	99%	2	1%	184	98%	4	2%
All respondents	403	95%	23	5%	410	96%	17	4%	395	93%	28	7%

Table 14 (continued)

Question 19: A list of requirements that local authorities could be expected to meet before being able to introduce a visitor levy is summarised below. Do you agree or disagree with these options?
Respondent type 4	j) Establish an approach to monitoring and publically reporting revenues raised and their expenditure on an annual basis				k) The approach to monitoring and reporting on the impact of the visitor levy on an annual basis, is clearly set out in the public domain				l) Establish an approach to evaluating and publically reporting, the impact of the visitor levy, within a reasonable period after introduction
	Agree		Disagree		Agree		Disagree		Agree		Disagree
	N	%	N	%	N	%	N	%	N	%	N	%
Individuals	214	91%	21	9%	209	90%	23	10%	210	91%	21	9%
Accommodation provider (hotel)	46		1		46		1		46		1
Accommodation provider (other)	60				59				57		1
Business organisation	4				4				4
Community council or residents' association	4				4				4
Heritage or culture organisation	10				10				9		1
Local authority	17				16				17
Other	4				3				4
Other representative organisation	3				3				3
Other tourism or hospitality business or organisation	7				7				7
Port authority	2				2				2
Professional body	8				7				8
Public body	1				1				1
Tourism and hospitality industry representative organisation	8				8				8
Tourism development or promotion organisation	10				10				10
Trades union, political party or campaign organisation	3				3				3
Total organisations	187	99%	1	1%	183	99%	1	1%	183	98%	3	2%
All respondents	401	95%	22	5%	392	94%	24	6%	393	94%	24	6%

General comments at Question 19 included that all the requirements listed are required, important or essential and that the list is comprehensive. It was also suggested that the approach set out is very much in line with how local authorities do business.

An alternative perspective was that the list of requirements should be decided by local authorities thus enabling greater empowerment and flexibility at the local level.

Comments on the individual requirements set out in the list covered in turn below.

a) Produce an initial statement of intention to consider introducing a visitor levy

There were no specific comments on this requirement.

b) A timeframe for introduction of at least one financial year following conclusion of consultation and engagement activities

Comments on the timeframe tended to come from Accommodation provider (other) respondents and included that a 12-month minimum period would be insufficient, including because of the budget cycle for the tourist industry. Alternative timeframes proposed included a minimum of 18 months or 18-24 months.

However, others thought that the timeframe is too long and, that if a local authority takes the decision to introduce a levy, it should be able to do so in a timeframe appropriate to its area.

It was also suggested that the lead in time should:

• Be appropriate to the size and scale of the tourism sector in the area.
• Allow for engagement once all parameters and elements are known, as opposed to consulting only on hypothetical situations.

c) Have held a consultation in their local area to gather views from all those who will be affected by the visitor levy

General comments included that local consultation will be important to securing buy-in from local stakeholders and that the approach should be robust, up to date and transparent. It was also suggested that any consultations undertaken prior to the approval by the Scottish Parliament of legislation to allow local authorities the power to introduce a visitor levy should not qualify for this requirement.

Other comments focused on who should be covered by any consultation requirements. One perspective was that the consultation should focus predominantly on accommodation providers and other businesses that benefit from tourism and generate wealth locally. It was also suggested that, while focused on local communities, any consultation should also engage with regional and national service providers and tourism operators.

An alternative view was that members of the tourist industry should not be given the powers to stop the local authority applying the levy if it deems one will be beneficial for their area. It was also suggested that residents and workers should have a greater say in local consultation than businesses or visitors.

In line with some of the comments set out below under demonstrating why the chosen rate of the visitor levy is optimal for the area, respondents suggested issues on which local authorities should be required to consult^[11], including how monies raised would be spent.

One practical issue raised was that it will be important to ensure that all businesses that might be affected can attend a consultation without having to travel away and incur the fees of an overnight stay.

d) Have conducted required impact assessments

General comments on impact assessments included that they should be carried out to specified standard, by an independent body or organisation, or should be audited to ensure that they represent a true picture.

Other comments included that local authorities should be required to consider environmental impact and mitigation.

e) Have assessed the administrative burden on businesses and taken steps to minimise this

It was suggested that minimising overhead costs is a shared concern for every business contributing to the success of the tourism sector, and that a local authority should demonstrate it has taken steps to ensure that the administration of a visitor levy is as efficient and cost-effective as possible.

f) If the legislation allows the rate to be set locally the local authority has demonstrated why the chosen rate of the visitor levy is optimal for that area

A specific comment was that while is reasonable to ask a local authority to explain why a particular rate has been chosen, it will be challenging to demonstrate why that rate is optimal.

Other comments focused on the type of supporting information local authorities should be required to provide. Suggestions included:

• The reason a levy is required.
• The cost-benefit percentage that will be acceptable, and the sum raised for community benefit in percentage terms below which it is not worth proceeding.
• The amount of income expected to be raised and the net contribution to the area in question.
• Estimated costs of collection.
• An indication of how monies will be spent. Further comments included being required to provide information on the tourism related projects the visitor levy will fund, including costs and timescales.

g) Have appropriate mechanisms in place to allow visitor levies collected to be remitted to the local authority

In terms of mechanisms to allow levies to be remitted to the local authority, comments included that they should be simple and efficient and be:

• In place before a visitor levy is introduced.
• Agreed in consultation with representatives of local accommodation providers.
• Consistent with digital VAT submissions. A specific suggestion was there should be engagement with those who produce and sell accounting packages.

h) Have made information about the visitor levy and how to pay it available and in the public domain, for both business and visitors

There were no specific comments on this requirement.

i) The approach to collaborative decision making on revenue spending is set out in the public domain^[12]

Comments included there must be meaningful public consultation on the collaborative decision-making approach, including criteria for investment, in advance of any mechanism being established, and not simply a requirement to set out the approach in the public domain.

Other comments were that:

• Local authorities should be required to conduct an option appraisal of the best governance structure for establishing a stakeholder panel.
• There should be meaningful representation from the local accommodation sector as well as tourist industry interests.

However, it was also noted that the approach to collaborative decision making will be dependent on the local authority's decision on whether revenues generated are ring-fenced.

j) Establish an approach to monitoring and publically reporting revenues raised and their expenditure on an annual basis

A Tourism and hospitality industry representative organisation respondent suggested that local authorities should report on how taxes are raised and spent and a Heritage or culture organisation respondent suggested that the mechanisms for doing should be in place before a levy is introduced. There was a call for the approach to be both transparent and comprehensive, and a suggestion that existing reporting arrangements, including those for local authorities' budgets, could be utilised where appropriate.

Suggestions for specific aspects of revenues raised that should be covered under a monitoring and reporting framework included:

• The full annual cost to the local authority of collecting the levy.
• The amount gathered by of each type of accommodation.

Suggestions for specific aspects of expenditure that should be covered included:

• The cost of considering whether to introduce the scheme.
• The cost of introducing the scheme.
• The cost of monitoring the scheme.
• The cost of providing the benefits for the local area.
• Location of spend in relation to islands.

k) The approach to monitoring and reporting on the impact of the visitor levy on an annual basis, is clearly set out in the public domain

One suggestion was that local authorities should have to set out how their use of visitor levy revenues promotes the training of workers and good employment practices such as payment of the Scottish Living Wage.

l) Establish an approach to evaluating and publically reporting, the impact of the visitor levy, within a reasonable period after introduction

Comments included that there need to be safeguards which allow the collection system to be stopped in its tracks if it is not working and that there should be a consultation after 12 months on whether the approach should continue.

Question 19 continued.

If you have any other suggestion for requirements, then please add these below together with your reasons.

There were suggestions that a local authority considering the introduction of a visitor levy should also be required to consider the following.

Costs, introduction and delivery of a visitor levy scheme

With respect to cost, introduction and delivery it was proposed local authorities should:

• Assess the burden on themselves and how this is to be recovered (if it is to be recovered from the levy, for example).
• Assess the cost to accommodation providers of administering the levy.
• Define which accommodation providers will be covered by any approach and ensure that information is in the public domain.
• Set out how they are going to identify, record and maintain a register of accommodation to which the levy applies in their local authority.
• Demonstrate that they have a mechanism in place to collect revenues from camper vans that are not stopping on sites.
• Make a commitment to work with local business to provide adequate time and, if necessary, financial support to make any systems changes required.
• Set out their approach to compliance.

Impact

With respect to impact it was thought local authorities should:

• Carry out an Island Impact Assessment where appropriate. Also, demonstrate how they have addressed the requirements of the Scottish Islands Plan when making their decisions.
• Ensure that the application of a levy does not adversely affect providers of existing facilities by diverting transient visitors to non-levied accommodation, such as wild camping.
• Develop, consult on and implement a local tourism strategy. This issue is discussed further at Question 24 below.
• Provide information on how revenues will be used to fund tourism-related projects, including providing costs and timescales.

Ongoing consultation and review

It was also argued that an ongoing process of consultation and review will be necessary and, specifically, that local authorities should be required to:

• Carry out ongoing engagement and collaboration with accommodation providers.
• Carry out an annual review to agree priorities for spending any visitor levy revenues.
• Carry out regular reviews – for example every two years – of whether a levy should remain in place.
• Assess whether their scheme would have significant adverse impacts on Scotland as a tourism destination and on other areas and consult with affected areas.

Other comments considered appeal or complaints processes and included that there should be an appeal mechanism if a provider does not feel they qualify as a 'commercial provider'. Another suggestion was that there should be an ombudsman or other answerable body to deal with concerns that a local authority has not been through all the required processes or has not completed the requirements to an acceptable standard.

Question 20: Should Scottish Government be able to prevent a local authority from applying a visitor levy?

Responses to Question 20 by respondent type are set out in Table 15 below.

A majority of respondents, 57% of those answering the question, agreed that the Scottish Government should be able to prevent a local authority from applying a visitor levy. There was significant divergence between Individual respondents, of whom only 45% agreed, and organisations where 71% of respondents agreed.

Opinions also differed markedly between organisational respondent groups: while all Tourism and hospitality industry representative organisation respondents and Other tourism or hospitality business or organisation respondents agreed, as did a substantial majority of Accommodation providers, almost all Local authority respondents disagreed, along with all Community council and Trades union, political party or campaign organisation respondents.

Table 15

Question 20: Should Scottish Government be able to prevent a local authority from applying a visitor levy?
Respondent type	Yes		No		Don't know		Not answered	Total
	N	%	N	%	N	%	N	N
Individuals	109	45%	98	40%	35	14%	33	275
Accommodation provider (hotel)	47		1		1			49
Accommodation provider (other)	54		4		5		4	67
Business organisation	4		1				2	7
Community council or residents' association			4				1	5
Heritage or culture organisation	2		5		3		2	12
Local authority	1		16		1		4	22
Other	3		1				1	5
Other representative organisation	3		1				1	5
Other tourism or hospitality business or organisation	6						1	7
Port authority							3	3
Professional body	3		3				4	10
Public body					1		5	6
Tourism and hospitality industry representative organisation	8						2	10
Tourism development or promotion organisation	5		4		1		1	11
Trades union, political party or campaign organisation			3				2	5
Total organisations	136	71%	43	23%	12	6%	33	224
All respondents	245	57%	141	33%	47	11%	66	499

Question 21: Under what circumstances should Scottish Government be able to do this?

Please provide a reason (or reasons) for your answer.

A frequent comment was that the Scottish Government should be able to prevent a local authority from applying a visitor levy if it has not, or cannot demonstrate that it has, gone through the necessary steps and met the requirements set out at Question 19. In particular there were calls for robust evidence to be in place relating to:

• Whether a visitor levy would have a negative impact on the local tourist economy. It was suggested that the Scottish Government should be able to prevent the introduction of a levy where there is evidence that the decision is detrimental to local business interests and the wider Scottish tourism sector.
• Adequate consultation having taken place, for example with local communities, local businesses and those who are less advantaged.
• Whether a levy would be of benefit to the local community, tourist industry and businesses and whether a levy would further the aims of the local tourism strategy. This issue is covered further at Question 25.

Other circumstances under which respondents thought the Scottish Government should be able to intervene were:

• If a local authority does not demonstrate adequately that taxes are being collected from all visitors, and not just the 'easy targets'.
• Where the local authority does not demonstrate that the funds gathered are to be used for tourism-related projects, or where they are instead being used to address other spending priorities.
• Where local authorities have a poor fiscal management record.
• If there is evidence the levy is improperly administered or targeted unfairly or an authority is failing to comply with the terms of the legislation.
• Where the costs of administering a levy outweigh the income received.

A number of Accommodation provider (other) respondents argued that, in the absence of a national framework to set the rate of levy (see Question 7), the Scottish Government should intervene to prevent an authority charging more than a nationally agreed upper limit (see Question 9). Another Accommodation provider (other) respondent suggested imposing a rate more than 5% above the average for other authorities.

There was a concern that leaving decisions about the rate of levy solely to local authorities could result in some areas being disadvantaged if excessive levels are set, and it was argued that the Scottish Government should have powers to approve the rate and proposed increases.

Respondents also considered whether the Scottish Government should be able to intervene when a visitor levy is already in place, particularly if it is not working as envisaged. The types of circumstances cited included the initial case made having proved to be inaccurate or where there is evidence that the levy is having a negative impact on the local economy, including through reduced visitor numbers or tourist revenue. It was also argued that a levy might be discontinued if an authority has achieved the aims of the local tourism strategy.

Beyond the focus on the local authority level, some respondents commented on the Scottish Government having an overview of both how the national tourist economy is being affected and how the actions of individual local authorities may be affecting their neighbours. It was suggested that the Scottish Government should oversee the first three years of a levy to ensure consistency across the country.

How revenues should be spent

The consultation paper noted that the intention is that receipts from a visitor levy within a local authority area should be spent on tourism-related activities, including responding to tourism pressures, in that local authority area. It is acknowledged that this is open to interpretation and could cover a broad range of activities. The consultation sought views on whether, where a local tourism strategy exists, a local authority should allocate revenues towards delivering the priorities articulated in this strategy.

The National Discussion highlighted the importance placed by the tourist industry on ensuring that decisions made about how revenues are spent are both transparent and engage local stakeholders.

Question 22: What requirements might be placed on local authorities to engage with local stakeholders to determine how revenues are spent?

Please provide a reason (or reasons) for your answer.

In general terms, respondents often agreed that engaging with stakeholders, including the general public, should be a priority for local authorities. The connection was often made to this engagement being a mechanism for stakeholders to decide either whether a levy was warranted or appropriate, or to agree on the spending priorities for revenues raised through a visitor levy.

There were references to involving 'all stakeholders', to the approach being transparent, and to undertaking consultation that is full, thorough and meaningful. Another feature of an engagement process identified was that it should continue throughout the lifetime of a levy being in place or that a legal requirement should be placed on local authorities to ensure stakeholder engagement as part of the process. However, it was also suggested that the requirement should not be overly prescriptive and should recognise varying local circumstances as to what might be appropriate.

In terms of who should be involved, or considered to be key stakeholders, groups identified included:

• Local communities or residents. However, the danger of 'consultation fatigue', including among smaller rural or island communities with limited numbers of people to take part, was also highlighted.
• Local tourist businesses, especially those who would be involved in collecting a levy. There were specific references to accommodation providers.
• Local housing associations or local voluntary sector organisations.
• Local representatives and councillors. Comments included that elected members are already mandated to make decisions on such local matters, and the connection was sometimes made to the tourism planning process and the wider local authority budgeting process.
• The existing network of Community Councils and local Development Trusts (where they exist). However, there was also a concern that Community Councils may not always be representative of the whole community, including those with tourism-related interests.
• Local tourism groups or representative organisations, including by using existing local structures and involving DMOs and VisitScotland.

An alternative perspective was that decisions related to a visitor levy are of such importance a dedicated visitor levy board should be required. Suggestions on composition varied but most commonly referred to local authorities or elected members and tourism sector agencies or representatives, as well as providers of accommodation and tourist related services.

A specific suggestion from a number of Accommodation provider (hotel) respondents was that a levy expenditure board should be established, populated by local businesses and business organisations. This should be comprised of at least 50% accommodation providers. A business plan should be developed and consulted on with stakeholder views taken into account.

Question 23: How might this engagement be best achieved?

Please provide a reason (or reasons) for your answer.

The themes raised at Question 23 very much reflected those covered at the previous question or which are raised at Question 25 below (regarding reporting arrangements that might be required of local authorities to account for the expenditure of receipts from a visitor levy).

Additional issues raised at this question included the best ways of ensuring that members of the public, and businesses and organisations can influence and be kept informed about spending priorities for any levies raised. Suggestions included doing so via:

• Public meetings or events.
• Online surveys. However, it was also suggested that options should be available for those with no access to the internet.
• Holding focus or working groups.

In terms of the best routes for making contact, suggestions included:

• Through the media or social media.
• Advertising consultations through online platforms, including the local authority's web site.
• By direct contact with accommodation providers or targeted surveys of accommodation providers.
• By displaying information in local libraries and community centres.
• Dissemination by local councillors as part of their public duties.
• Setting up an email address for general feedback.

More general suggestions included that clear guidance on the questions and forms of engagement should be set out by the Scottish Government. COSLA reported their intention to offer a framework of best practice that Local Government and industry partners can reference when consulting with businesses around the design, implementation, administration, and enforcement of the levy.

It was also suggested that legislation should ensure that local authorities are required to conduct an option appraisal around the best governance structure for establishing a stakeholder panel, including the option of creating a Transient Visitor Levy Trust with an independent board making investment decisions and ensuring civic agreement on use of the revenues raised.

Question 24: Should revenues from a visitor levy be allocated to priorities articulated through local tourism strategies, where they exist?

Please provide a reason (or reasons) for your answer.

Responses to Question 24 by respondent type are set out in Table 16 below.

A majority of respondents, 73% of those answering the question, thought revenues from a visitor levy should be allocated to priorities articulated through local tourism strategies, where they exist. Organisations were more likely than individuals to take this view (86% and 63% respectively).

Table 16

Question 24: Should revenues from a visitor levy be allocated to priorities articulated through local tourism strategies, where they exist?
Respondent type	Yes		No		Don't know		Not answered	Total
	N	%	N	%	N	%	N	N
Individuals	145	63%	52	22%	35	15%	43	275
Accommodation provider (hotel)	46		1				2	49
Accommodation provider (other)	51		4		5		7	67
Business organisation	4						3	7
Community council or residents' association	2		2				1	5
Heritage or culture organisation	9		1		1		1	12
Local authority	14		4		1		3	22
Other	4						1	5
Other representative organisation	2				1		2	5
Other tourism or hospitality business or organisation	7							7
Port authority	2						1	3
Professional body	2		1		1		6	10
Public body	2		1				3	6
Tourism and hospitality industry representative organisation	8						2	10
Tourism development or promotion organisation	9		1				1	11
Trades union, political party or campaign organisation	1		2				2	5
Total organisations	163	86%	17	9%	9	5%	35	224
All respondents	308	73%	69	16%	44	10%	78	499

Articulated through local tourism strategies

Further comments by those who thought revenues should be allocated to priorities articulated through local tourism strategies often focused on the priorities themselves and included that they should be focused on, or restricted to, tourism-related activities. It was also suggested that it will be important to ensure that local strategies genuinely reflect local business needs, or that having a local tourism strategy in place should be compulsory or should be a condition of being able to charge a visitor levy.

Respondents pointed to the possible impacts that could flow from a strategy-driven approach, including the acceleration of delivery of existing priorities. It was noted that tourism strategies will have been developed along with key local stakeholders including local community groups and representatives of the local tourist industry. It was also suggested, however, that it will be important to ensure that other stakeholders who may not have fed into the establishment of the local tourism strategy have a chance to feed into the process. Further suggestions were that where Business Improvement Districts (BIDs) exist, there should be joined up thinking and the strategy development process would provide an opportunity for close collaboration with neighbouring authorities around impacts and investment needs.

There were specific references to using revenues on facilities, such as the provision of public toilets or tourist information offices and to the delivery of services which could impact on the visitor experience, such as rubbish collection. There were also specific references to tourism development activities being the only appropriate focus of spend or to monies being ring-fenced for tourism-related infrastructure in the relevant local authority.

Other variations suggested included:

• A proportion of revenues being allocated to tourism strategy priorities, but other revenues spent on provision and maintenance of public services.
• Some revenue being diverted to national projects.
• Some revenue being used to carry out the objectives of other strategies, such as in relation to placemaking, heritage, or arts and culture. A specific suggestion was that a proportion of revenues should be ring-fenced for use in supporting the arts and culture sector.
• Potentially using some of the revenue collected to mitigate the environmental impact of overseas visitors.

It was also suggested that, where authorities have lower visitor numbers, there should be flexibility on how the income is spent in response to local needs.

In terms of local tourism strategies themselves, comments included that:

• There may be circumstances when the strategy should be at a more local level – for example based on destinations or having a strategy for an island.
• They provide an opportunity to test priorities through the various impact assessments, such as Equality Impact Assessment and Strategic Environmental Assessment.

Not articulated through local tourism strategies

Those who did not think revenues from a visitor levy should be allocated to priorities articulated through local tourism strategies (along with some of those who did not answer the closed question or answered that they did not know), often focused on alternative priorities for spending. The themes raised, and alternatives suggested, were often similar to those identified by respondents who did think revenues should be allocated to priorities articulated through a strategy but also that other sectors, such as culture, or services should benefit. It was suggested, for example, that the use of revenues should not be limited to delivering the outcomes of tourism strategies but should be invested in services, including museums and galleries, which are a tourism driver and central to a quality visitor experience.

Other comments included that revenues should be spent to the benefit of both locals and visitors. There were references to using revenues for local infrastructure, such as on maintaining the road network, improving public transport and developing active travel. It was also suggested that the focus should be on mitigating the effects of tourism on the fabric of an area.

Other respondents thought that monies should be directed where most needed, or thought the focus of spend should be on services for the local population, or those most disadvantaged. Specific suggestions included prioritising spend on social care, education, libraries, tackling homelessness or on social and affordable housing. These types of priorities were sometimes connected to comments about shortfalls in funding for essential services.

It was also suggested that, as it will be a local decision whether to implement the visitor levy, use of the revenue should also be a local decision and allocation to priorities identified through local tourism strategies should also be optional. It was sometimes simply noted that priorities should be a matter for local authorities to determine. A specific suggestion was that councils should be able to offset their reasonable administration costs against the levies raised so that a net sum is available for use on other activities.

Other comments also addressed who should be making the decisions on how revenues should be spent and included that the role of the local tourism strategy should depend on whether the stakeholders involved in developing it are also those who would be affected by a visitor levy. Some concerns about local tourism strategies were also voiced, including that they almost always reflect the interests of larger operators and are variable in their quality and content. Alternative suggestions as to who should be making decisions about spending priorities included:

• Elected councillors, including through their role in setting the overall council budget strategy.
• Community Councils.
• Local residents.

Question 25: What reporting arrangements might be required of local authorities to account for the expenditure of receipts from a visitor levy?

Please provide a reason (or reasons) for your answer.

Comments at this question tended to either focus on the principles which should underpin the reporting arrangements or make specific suggestions as to the approach which should be used. On the former point, respondents often highlighted the importance of transparency. Other features seen as desirable included openness, accountability, simplicity or accessibility and clear and comprehensiveness.

The importance of information being made available to the public, including local communities was also highlighted. A specific comment was that it would be sensible to think about communications with the general public, to ensure that the local community can see the benefits for them of a visitor levy.

Making information available on the local authority's website and coverage in the local media were both suggested, as was including information about levy-related income and expenditure on Council Tax statements.

Other comments focused on specific groups who should be sent information, with suggestions including: all stakeholders; relevant businesses; accommodation providers; businesses collecting the levy; and relevant industry groups.

In terms of the overall approach, by some margin the most frequently raised suggestion was that there should be a requirement on the local authority to produce an annual report. Alternative timescales suggested were that either quarterly or bi-annual reports should be required.

On the focus and coverage of the required report, the three main suggestions were that it should include:

• All revenues, receipts or income generated through a visitor levy, including by type of accommodation or sector, by location and specifically by ward, or time of year at which generated.
• All expenditure, or more specifically the accounted allocation of funds, including location or area in which spent and again, for example, by ward.
• The costs of administering a levy, including the cost of collection.

Other comments addressed impact, and particularly impact of visitor levy-related spend. Specific suggestions included that the local authority should report on tangible benefits including to tourism sector, local businesses, and the local community. Other proposals were that they should report on economic impact based on the income and reallocation of previous spending or on the social impact, for example if spending on changes to pedestrian infrastructure has meant the local area is a better place to live.

A different perspective – expressed amongst others by a number of Local authority respondents – was that any approach could or should be in line with existing local authority budgetary control processes and annual financial accounts. However, it was also suggested that the approach to reporting will depend on any decision to ring-fence funds for specific purposes.

In addition to the comments about information being publically available, there were also comments about reporting formal requirements and either who should approve or to whom any reports should be sent. Suggestions were:

• Elected members, including the relevant appropriate local authority committee(s).
• Community Council(s).
• Scottish Government.
• A national tourism agency.

Question 26: If a local authority was to impose a visitor levy on a specific area within the authority, should any revenue raised have to be spent only in that area?

Please provide a reason (or reasons) for your answer.

Responses to Question 26 by respondent type are set out in Table 17 below.

Table 17

Question 26: If a local authority was to impose a visitor levy on a specific area within the authority, should any revenue raised have to be spent only in that area?
Respondent type	Yes		No		Don't know		Not answered	Total
	N	%	N	%	N	%	N	N
Individuals	133	57%	72	31%	27	12%	43	275
Accommodation provider (hotel)	4		3		40		2	49
Accommodation provider (other)	47		8		5		7	67
Business organisation	4		1				2	7
Community council or residents' association	3		2					5
Heritage or culture organisation	5		4		1		2	12
Local authority	5		11		1		5	22
Other	2		2				1	5
Other representative organisation	3						2	5
Other tourism or hospitality business or organisation	5		1		1			7
Port authority	1						2	3
Professional body	2		4				4	10
Public body	2				1		3	6
Tourism and hospitality industry representative organisation	7				1		2	10
Tourism development or promotion organisation	1		4		4		2	11
Trades union, political party or campaign organisation	1		1		1		2	5
Total organisations	92	49%	41	22%	55	29%	36	224
All respondents	225	54%	113	27%	82	20%	79	499

A small majority of respondents, 54% of those answering the question, thought that if a local authority was to impose a visitor levy on a specific area within the authority, any revenue raised should have to be spent only in that area. Individuals were more likely to think so than organisations (57% and 49% respectively). Of the remaining respondents, 27% did not think so and a relatively high 20% did not know

Local authority, Professional body and Tourism development or promotion organisations were the only groups where a majority disagreed However, a large proportion of the Accommodation provider (hotel) group answered that they did not know.

Revenue raised should have to be spent only in that area

Those who thought revenue raised should only be spent in that area sometimes saw this to be the fair or equitable approach or suggested that those 'at source' should be the ones to benefit from any revenues collected. It was noted that this would be in line with the existing BID model.

With specific reference to businesses it was thought that those that have been responsible for the collection of the revenue should be the ones to benefit, including because tourism businesses in one area should not be taxed to support their competition in another area. It was also thought that such an approach could help with creating buy-in from the businesses that will be involved in collecting the levy.

However, it was also observed that local residents are the ones who are living with the impact of tourism. It was also noted that the justification for a levy would be that the volume of tourism activity is placing a strain on specific areas or communities and that it makes sense, therefore, for revenues to be used to mitigate that strain. It was suggested that revenues raised could pay for the additional services required due to increased footfall and traffic and the approach would mean that 'stress points' for residents and the tourism-related infrastructure could be tackled.

A specific suggestion was that revenues should be ring-fenced for the area concerned and that the legislation should include a presumption in favour of devolution below local authority level. There was an associated suggestion that deciding on the investment of the proceeds of the levy should be for local communities through a participatory budgeting process.

A small number of possible exceptions to the approach were proposed, including:

• If tourism businesses are dependent on, and benefit from, a visitor attraction or amenity which lies outside the 'taxable zone' then it may make sense to allocate funding to that area or amenity. A similar perspective was that revenue should also be spent in areas where tourism activity is consumed, and which experience the resulting impact. The example given was that a national park may be in a different area to where accommodation is located.
• There may reasons for potentially pooling revenue with neighbouring authorities depending on the type of impacts that are being experienced and the investment required to tackle these.

Revenue raised should not have to be spent only in that area

Those who did not think revenue raised should only be spent in the area in which it was raised sometimes simply commented that money should be spent where most needed, or where it can have greatest impact, that this should be a local or local authority decision, or that it is elected Councillors who should decide on spending priorities for a local authority. Other comments were that:

• The effects of high levels of tourism on one area may 'ripple out' into surrounding areas, and it is reasonable that the use of revenues should be the same.
• It might be that revenues from a visitor levy exceed funds necessary for use within that location, so it would not be wise to hypothecate purely to that one area.
• There may be a case for using revenues to support the dispersal of visitors from a particular hotspot, such as a city centre, to other parts of a local authority area.
• There may be compelling reasons for using revenues outside of the specific area, to develop and maintain certain infrastructure that also benefits the specific area.