Council tax reform proposal branded ‘damp squib’ by COSLA

The local authority umbrella group said that it was astounded that the government had missed an opportunity which could have had benefits for millions of people.

Under the proposals, announced yesterday by first minister Nicola Sturgeon, the rates paid by those in the four highest council tax bands (E, F, G and H) will be adjusted from April 2017 in a move that will generate £100 million a year to be invested in schools through future local government settlements.

However, COSLA’s finance spokesperson, Councillor Kevin Keenan, said: “There is nothing radical in today’s announcement. Unsurprisingly the only opportunity the government did take was to further control and centralise.

“For a government that has criticised the council tax system since coming into power in 2007 and then went to the trouble of setting up a Commission to look at an alternative it is bizarre that this is the best that they could come up with.

“Putting self-interest ahead of real change could have serious consequences for the lives of Scottish people particularly coming on the back of such a terrible settlement for local government.

“What today boils down to is that they have done nothing of substance, they have taken a system made it more complicated and less transparent for individuals and more complex for councils to administer. They have muddied the waters.”

COSLA president, Councillor David O’Neill, added: “I am saddened that yet again we have an offence against local democracy, local decision making and local choice. I am particularly angry about the Cap, the Central Direction of spend, we still have Valuations over a quarter of a century old and no mention of local discretionary taxes.

“The proposed cap on council tax which seems nothing more than a direct lift from England and the central direction of revenue raised is another act of folly from government. This is not an attack on education spend – but it should be councils that make that decision not the Scottish Government.

“They have completely ignored the good work and recommendations of the Commission on Local Tax Reform. Having served on this commission in good faith, I am embarrassed about today’s proposals as must be the local government minister.

“What we have before us today is a damp squib. This is nothing more than fairly poor cover for a very crude power grab, they haven’t even bothered to change the name.

“Well I have an alternative name for them, it should be called the Scottish Government tax because it is now so centrally controlled that to even have the word council associated with it is an insult to councils and disingenuous to communities.

“One final note of caution the promise of a further consultation on local government funding does not fill me with much hope or confidence.”

The reforms, which the first minister said build on the recommendations of the Commission on Local Tax Reform, will see the average band E household pay around £2 per week more and the average household in the highest band pay around £10 a week more.

The 75 per cent of Scottish households that live in bands A to D will be unaffected by this change to the council tax band system and a further 54,000 households living in bands E to H on low incomes – more than one third of which are pensioner households – will be entitled to an exemption from the changes through the council tax reduction scheme.

The reforms will also provide additional support to families on low incomes across all council tax bands by extending the relief available to households with children. This will benefit 77,000 low income families by an average of £173 per year, supporting an estimated 140,000 children.

Council tax bills have been frozen in Scotland since 2007 and the changes announced today will ensure that bills in every band will be lower than they would have been had the freeze not been in place. Across Scotland, average rates in all bands will remain lower than the average in England.

The council freeze will continue until April 2017. From April 2017, the freeze will be replaced with discretion for local authorities to increase council tax by a maximum of 3 per cent per year. This could generate up to £70m for council services across the country.

The first minister also confirmed that the changes will pave the way for longer term reforms that will give local councils the benefit of growth in the Scottish economy, make taxation to fund local government expenditure as a whole more progressive and make the funding of local services more transparent.