The Scottish parliament's Local Government Committee on Monday announced the terms of reference for its inquiry into local government finance. The move follows a decision by the Scottish executive not to carry out its own review of local authority funding in Scotland.

Announcing the terms of reference of the inquiry, the committee's convener, Trish Godman, said: "As a result of our consideration of the McIntosh Report, our committee agreed that, in the best interests of local government in Scotland, an urgent review of its finance system is called for. And following the Scottish Executive's decision not to carry out an independent review, we decided to instigate an inquiry ourselves.

"Last year, during our visits to councils throughout Scotland, the need for a review was consistently put to us by local government representatives. Whilst we recognise that the Scottish Executive is in the process of reviewing some aspects of local government, we feel that the committee could provide a more comprehensive and independent review."

The committee hopes to conclude its inquiry by 2002. Said Godman: "Therefore, the broad terms of reference of our inquiry will be: to examine the current system of local government finance, including systems of local taxation; to identify strengths and weaknesses of the current system, and to make recommendations on improving the system. The committee's intention is to complete its inquiry and report to parliament by January 2002."