Holyrood’s method of electing MSPs needs to be reformed as part of a series of measures to revitalise devolution in the run-up to the Scottish Parliament’s 20th anniversary, former first minister Lord McConnell said.

He also suggested the Parliament could benefit from following the example of Westminster and introducing elected committee chairs.

He said change is needed because at the moment “so many members of the Parliament owe their place to the party rather than the electorate”.

Lord McConnell, who was first minister from 2001 to 2007, said Holyrood had made “attempts to try to work in new ways” when it was established in May 1999.

But speaking at an event in Edinburgh to mark two decades of Scottish devolution, he said further changes should be made – including the introduction of elected committee conveners.

He said if there is no support for major reforms to the additional member system – which sees Scots elect both constituent and regional list MSPs – restrictions should be introduced to limit the amount of time politicians can spend as list MSPs.

The former Scottish Labour leader spoke about the impact Yvette Cooper has had in the Commons as the chair of the Home Affairs Committee “because of the power and authority of that elected position”.

He added: “I think the time has come to elect the chairs of the committee of the Scottish Parliament from amongst the backbenchers, not selected by the parties and the party whips.”

He also told the event, organised by think tank Reform Scotland: “I think there is a case for looking again at the electoral system, either improving what we have or reviewing the system as a whole.

“The system of constituency and list MSPs has never really settled, I don’t believe that is a system people have ever really become comfortable with, apart from those who benefit from it and have a position in the Parliament.

“If there’s not a mood for wholesale reform, I would introduce time limits for the list MSPs, because that would force people to then be dragged into constituencies, to build a proper relationship with the electorate, rather than be selected by party leaders and party committees to positions that are relatively safe and secure in the Parliament.”

He recalled “how dire things were” in 1999 when the first batch of MSPs were elected, saying at that time Scotland had the worst record on smoking in Europe, the country’s population was declining, and  Glasgow had the worst record on knife crime and violence of any European city.

Lord McConnell said: “That was the Scotland of 1999, we might have been happy that we had achieved a Scottish Parliament but it wasn’t a happy place, it wasn’t a place that was moving forward socially.”

He said the Parliament has a “quite remarkable” record in terms of the amount of legislation that has been passed, with almost 300 Acts approved by MSPs.

The creation of the role of first minister has been “one of the biggest things that has changed”, he said, adding it means there is “a leader in Scotland who can speak for Scotland, inside the UK, further afield, but also in Scotland itself, trying to change attitudes and lead the public debate here”.

However he said local government reform is a “huge challenge” that has “never been grasped”.

Lord McConnell said: “We’ve still got the same financial regime basically for local government in Scotland that we had when the Parliament was created.

“It’s a hard thing to do, we looked at it when I was first minister, but I wonder whether there is a case now for devolving more financial responsibility to the local level.

“We need to build new reasons for people to want to be in local government and to be leaders.”

He insisted there is a “need for a much higher percentage of the money spent by local government to be raised locally”.

He argued this would bring about “real choices for the local electorate – pick your councillor and it will affect your pocket one way or another, pick your councillor and it will affect your level of services and what your kids’ future is”.

He concluded: “I think that would reinvigorate local democracy.”