North-east business leaders have called for local authorities to be given more financial powers to boost economic growth.
Aberdeen and Grampian Chamber of Commerce (AGCC) said most of its members want power over funding reform and for business rates and council tax to be devolved.
It claimed it made “economic sense” for air passenger duty to be transferred to Holyrood because the tax was “detrimental” to the north-east because the local economy relied on global travel.
The proposals are contained within the chamber’s submission to the Smith Commission which is examining more powers for the Scottish Parliament.
AGCC claimed councils have been restrained by low-funding settlements, local needs were not being properly met and economic growth was being constrained.
It said the region was being “penalised for its success” due to high levels of employment, relatively low levels of deprivation and a high standard of living.
It claimed that existing devolved powers do not “appear to understand or reflect that additional investment in the region would generate a higher return on investment than in other areas”.
The chamber claimed the region suffered from “significant problems”.
“There is an acute housing shortage, which in turn is increasing property prices beyond sustainable levels, particularly in the private rent sector,” it stated.
“The infrastructure is at breaking point and councils are unable to sustain the current levels of public service over an extended period of time with a growing population.”
James Bream, research and policy director at the chamber, said: “It is time to provide local authorities with the power that they need to ensure we maximise our economic potential.”
He added that members had strong feelings for and against devolution of various taxes and whatever is decided must be supported by a strong business case.
The Scottish Trades Union Congress wants income tax, air passenger duty, 50% of Vat and an assignment of alcohol, tobacco, fuel and gaming duties devolved to Holyrood.
The Poverty Alliance wants full devolution of income tax but thinks powers over oil and gas should remain at UK level with Scotland receiving a fair share of revenues raised.