SNP Greens Freezing The Council Tax Has Been A Disaster For Local Services - Roads Testify To That

27th February 2024

With the latest round of Scottish council budgets ongoing and Highland Council due on Thursday 29 February 2024 we wait to see if they will toe the line. The recommendation in the budget papers
budget papers is to do what the government asks and freeze the tax.

The SNP/Greens say they want more local decision making but their actions in relation to the only real local tax means councils are more and more subject to central control acting as nothing more and administrators rather than decision makers. Centralisation has become the norm as often any grants for many things come with strings effectively ring fencing to fit SNP/Green policies whether or not they are suitable to local circumstances.

The Council Tax now only generates 12% of council income; it used to be nearer 20%. By dictating almost all council finance from the centre, councils become local administrators rather than local government - unable to respond to local needs and be accountable to their electorate.

The announcement by Argyle and Bute Council that they are to increase the Council Tax by 10% has highlighted the Council Tax freeze anomaly - they made the difficult decision to save services and mend the roads.

Scotland has already seen 9 years of council tax freeze and the results can be seen across the county in potholed roads and reduced services from closed libraries and swimming pools but more serious cuts to school budgets and a struggling social c ae service.

The council tax as a system has outlived it usefulness but government so far has not come up with a replacement. Whilst the poorest households do not pay anything the council tax takes no account of income and ability to pay.

Claims to be helping the poorest with more social security payments do not seem to stack up when more and more people are using food banks, rent arrears rising to the the highest levels.

Whilst council tax is demonstrably not a good tax it is what we have in place and not to allow local control goes against the grain for accountability. Problems for local services closures and reduction should be firmly laid at the door of the SNP and Greens. Blaming Westminster for the problems just wont do even if there is some truth to it - it is not the whole story.

In addition, councils have partly plugged the gap by increasing charges for services that also hit the lower paid harder. It also hits women as employees and carers harder as services get squeezed.

Car parking chargers Brown bin charges and several other small increase cannot replace a proper council tax charge.

The problem with the Council Tax freeze is the cumulative impact that nine years already hit council budgets. For every year of a freeze the impact is multiplied. That multiplier affect from the previous nine years will be added to with another year of freeze

The Scottish Government has a number of problems including the announcement on a halt to capital spending for two years stopping building hospitals, medical centres, schools and more.

Councils require to service debts or previous building programmes with interest payments and with real shrinking budgets the problems are magnified.

While to an individual is may seem like a good thing to keep payments at existing levels the longer run means shrinking services. the government promise to cover the deficit with extra money does not really cover it. COSLA has already said the funding is inadequate.

So what can be done?
English councils are in even worse shape with Birmingham leading the way being bankrupt declaring a S114 the only way a council can be insolvent in England. A section 114 notice means the council cannot make new spending commitments and must meet within 21 days to discuss what to do next. Previously, most councils in this situation have then passed an amended budget reducing spending on services. Birmingham has just announced a 20 percent increase in their council tax and will still make many cuts to services even with more UK government help promised. Its a mess.

Wealth taxes could be solution but they are not in the gift of Scottish Government.

Big companies pay less if they have good accountants.

Tax Justice has suggested solutions
If he chose to, the Chancellor could:
Equalize capital gains with income tax rates, raising up to £14 billion a year
​Apply national insurance to investment income, raising up to £8.6 billion a year
Apply a 1% wealth tax on assets over £10 million, raising up to £10 billion a year
End the inheritance tax loopholes that benefit the already wealthy, raising up to £1.4 billion a year.
Reform the rules on non-dom status, raising up to £3.2 billion a year
Source - https://www.taxjustice.uk/blog/five-policies-that-could-raise-37-billion-in-tax

Meantime should local councils not be allowed to decide at least a small part of the income raised for local services.