Holyrood’s Local Government and Communities Committee last week approved the SNP’s plans to increase council tax for bands E to H.
After 9 years of frozen rates and failure to reform the “hated council tax”, this will see a centrally-mandated increase for the four most expensive bands and an additional ~£100m raised annually.
I’m not entirely against this move. Whilst I’m no fan of Council Tax and would support calls for the far more radical reform the Scottish Government’s Commission on Local Tax Reform [LINK] recommended, it’s clear the council tax freeze has long since had its day and any reform, even this timid affair, is to be welcomed.
What I cannot support, however, is what will happen with the money raised. In the worst traditions of near decade-long SNP governance, the additional revenue will be centralised.
Local taxation paid by householders all over Scotland will be clawed back by Holyrood and re-distributed according to central government choices and not local authorities.
The Scottish Government will force all councils to increase the rates and withhold the commensurate amount raised from the General Revenue Grant provided to each council. Instead, the money will be distributed directly to schools as part of the Attainment Fund, divvied up according to the proportion of pupils who qualify for Free School Meals.
In effect, councils with higher proportions of higher band housing will be paying more council tax to fund education spending in other local authority areas. The biggest losers will be the North East and Edinburgh, along with Perth and Kinross, East Dunbartonshire, East Renfrewshire and Stirling.
Residents in Edinburgh will pay almost £48m in additional Council Tax and see no improvement in local services for it. In the midst of the biggest oil crisis in 30 years, perhaps ever, North East residents will pay £47m in additional Council Tax and see the money largely transferred to the central belt and Dundee.
Supporters will say so what, isn’t this just “pooling and sharing”, which pro-union parties laud as one of the great strengths of the UK? Shouldn’t this also apply to Scotland, where revenue is redistributed from those with the most to those with the least? There are two problems with this argument: first, that the SNP have failed to take the opportunity to implement a far more radical reform of local taxation which would actually see those with the most paying the most; and second that local taxation should not be used for central government policy.
COSLA (Convention of Scottish Local Authorities) were extremely critical of the government’s plans during the consultation phase, concluding that “it is COSLA’s strong view that to use local taxation revenues in this way contravenes the entire notion of reforming local taxation and threatens local democracy”.
The Scottish Greens have even gone as far as to claim that the proposals, along with the proposed 3% cap on rate increases to follow next year, contravene European Law on local authority competence [LINK].
Despite COSLA’s concerns, the Scottish Government have pressed on with Labour’s Elaine Smith joining the three SNP members of the Local Government and Communities Committee to approve the plans. It’s also worth noting that the two Conservative members of the committee joined the SNP in voting down Andy Wightman’s amendment noting wider concerns on the reform proposed, including the appropriation of council tax for central government policy. Mr Wightman abstained on the main vote.
Yet it’s worth noting the change in rhetoric from some SNP ministers on the proposals. Whilst the government website is busy telling us that “the additional £100m per annum that will be raised each year from our Council Tax reforms will be allocated directly to schools”…
…the Deputy First Minister is telling us something quite different…
… and the Finance Secretary Derek Mackay too…
… and lastly, Aberdeenshire East MSP Gillian Martin who seems to be quite happy for her constituents to be paying millions in additional council tax only to see the money sent to the central belt.
This is nothing more than political spin and scandalously devious spin at that. While the additional council tax will technically stay with the local authority in which it is paid, it’s hardly accurate to call the attainment fund “a entirely separate central government grant” [sic] when it is raised solely by withholding the General Revenue Grant for the very sum that your constituents have just been told to pay in additional Council Tax.
This is nothing more than attempting to mislead those who are the “losers” from the council tax cash grab whilst, in a different forum, the party are happy to take credit for the direct link in the redistributed spend:
Which rather goes against what Ms Sturgeon’s own Deputy contends is the “principle of local authority taxation”.
Let’s hope voters see through the spin for next year’s council elections… or any by-elections before then.
No doubt I will get comments such as “well what would you do instead, isn’t the Attainment Fund a worthy cause?”. So here’s what the Scottish Liberal Democrats would do:
- We’d reform Council Tax properly and introduce a new Land Value Tax (page 32 here)
- We’d strengthen local democracy by reversing the SNP’s centralisation and instead return powers to councils on revenue raising through domestic and business taxation (page 19 here)
- and instead of a measly £100m a year raised through an undemocratic centralisation of local taxation, we’d use the revenue raising powers of the Scottish Government to put 1p on the Scottish Rate of Income Tax – a progressive taxation measure that ensures those with the most, pay the most – raising half a billion pounds a year to properly fund investment in education, including the introduction of a Scottish Pupil Premium to facilitate attainment in the least advantaged parts of our society (page 5 here).
A damn sight fairer and more effective than the timid, undemocratic proposals of the SNP.
NOTE 1 – sources:
- Additional Council Tax to be paid per SPICe Report into Council Tax Reform – http://www.parliament.scot/ResearchBriefingsAndFactsheets/S4/SB_16-28_Scottish_Government_proposals_for_Council_Tax_reform.pdf
- Attainment Fund to be distributed per proportion of pupils qualifying for Free School Meals as detailed here – http://www.gov.scot/Topics/Statistics/Browse/School-Education/MealsSD/mealspesd/mealspesd2016