BUSINESS leaders have called for the number of local authorities in Scotland to be cut from the current 32 to save money.
CBI Scotland urged Finance Secretary John Swinney to adopt a bolder approach to cutting Government spending, including radical reform of councils.
In a submission on the budget for 2014/15, the business organisation called for "a model based on larger authorities including metropolitan areas covering the principal cities".
It said the change should run alongside moves to speed up integration of council and NHS services for older people.
Scotland's senior police officers have already urged ministers to consider a cut in the number of councils, after the merger this year of eight forces into a single service.
Last year the think-tank Reform Scotland published a detailed plan to cut the number of councils from 32 to 19. The Scottish Government and Cosla, the body representing councils, have consistently opposed such proposals.
CBI Scotland's plea is part of a package of measures to reform the public sector and cut Government spending. The organisation said publicly owned Scottish Water should be made less reliant on the public purse, public-sector wages should be "contained," and more work should go to private firms.
CBI Scotland also wants a string of flagship SNP policies scrapped.
In the submission to Mr Swinney, it called for an end to free university tuition. It said a "graduate contribution" should be introduced with graduates asked to pay when their earnings reached £21,000.
The organisation urged ministers to accept the need for council tax to go up – by no more than inflation – which it said was preferable to the SNP's shelved plan for a local income tax.
The Scottish Government's pledge to protect health-service budgets should also be dropped, CBI Scotland said, and more hospital catering and cleaning work should be put in the hands of the private sector.
The submission said: "A bolder approach to making savings in devolved public expenditure would free up money for spending on more economically beneficial and growth-enhancing areas of government policy.
"It would also negate the need for any further new tax rises. There are plenty of options for reshaping devolved spending, and while some may not be easy politically, now is the time to grasp the nettle."
Ian McMillan, director of CBI Scotland, added: "Through the measures outlined in this paper we believe Scotland's economy can be assisted to return to a sustainable growth path."
The call to cut the number of councils drew a stinging response from Cosla president David O'Neill, who said proposals for reorganisation were costly and ill thought-out.
He added: "All recent reviews have turned thinking against the simplicity but unproven benefit of centralisation and national aggregation of service. They have instead championed local integration, decentralisation and focus on place and community.
"Localisation and local democracy is the answer to the problems in Scotland, they are not the problems itself."
The Scottish Government has already ruled out council mergers and last night a spokeswoman also dismissed the CBI's attack on flagship policies.
She said: "We remain totally committed to free higher education based on the ability to learn, not the ability to pay. And our ring-fencing of the NHS revenue budget has ensured we have increased healthcare spending despite deep cuts from Westminster."
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