LAST week’s big surprise was the announcement of a council tax freeze across Scotland for 2024/25.
The policy was launched during the First Minister’s closing speech on the last day of the SNP’s conference in Aberdeen and was surprising for a number of reasons.
It’s been confirmed the decision wasn’t made through the Scottish cabinet but rather was made a day or two before Humza Yousaf’s speech.
In July this year, a public consultation was launched mooting possible rises in council tax of 7.5% to 22.5% for properties valued in bands E to H respectively.
That proposal wasn’t seen as particularly progressive as council tax is ostensibly based upon 1991 property valuations and is a crude device to assess the ability to pay.
In June this year, the Scottish Government announced its Verity House Agreement with local councils and proclaimed its “vision for a more collaborative approach to delivering our shared priorities for the people of Scotland”.
No more surprises for local government, instead rather mature joint working that showed “respect for each other’s democratic mandate”. Yet the first Cosla, the body which represents local councils, knew about the freeze was from watching the First Minister’s announcement on the telly. The Verity House Agreement seems to have been airbrushed out of existence in less than four months.
More perplexing is the presentation of a council tax freeze as a cost-of-living measure. People who don’t have any money or savings don’t have to pay council tax and will be eligible for a full council tax reduction.
Arguably, a council tax freeze benefits those with the largest household wealth in Scotland most.
We’ve had the spectre of local authorities across the country proposing the closure of community facilities, public libraries, swimming pools and sports centres in order to address financial blackholes in budgets.
Without adequate financing, councils may also have to look at freezing recruitment and encouraging voluntary redundancies.
So far, no detailed costings have been provided for the council tax freeze but there is a pledge from the Scottish Government to “fully fund” it.
Strathclyde University’s Fraser of Allander Institute suggests fully funding could be a massive figure, it said: “If we assumed an 8% increase was being planned – which is lower than some councils implemented last year, and would still not bring much in terms of real increases in funding for local authorities – the total shortfall would be £417 million (£229m from the freeze plus £188m from not increasing the multipliers).”
This gives rise to the curious prospect that we may end up using general taxation to prop up a discredited system of local taxation. In other words, we use a fairer and more progressive system of taxation based on actual wealth to perpetuate a now iniquitous local tax based on 1991 property values.
Two final thoughts. How do we square what happened last week with those who say Westminster rides rough shod over the Scottish Parliament, when Holyrood appears to do the same to local government in Scotland?
Given that the council tax freeze appears to be a clunky, regressive policy that helps the better off most – and was based on no discernible costings or empirical evidence – was it just a soundbite policy for a speech? Or does it help Scotland?
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