Another Council Tax ‘Freeze’?
A previous post here commented on the occasional lapse that all parties [ and some leading figures in those parties ] make when it comes to party conference time . Both Labour and Conservatives have fallen for that , making announcements that fall apart within days if not hours alongside plans/promises that will prove very hard to implement.
This past weekend /week it has been the turn of the Scottish National Party to follow up with that other favourite party conference trope ‘Rabbit out of Hat ‘.
Set aside for the moment the somewhat unclear [ even to former insider , Liz Lloyd ] direction that any post General Election independence initiative might follow, because that announcement was fairly formulaic stuff. Consider the other big conference talking point, the proposal to ‘Freeze’ the Council Tax across Scotland next year .
And we’ve been there before….
Remember we had several years of council tax ‘freeze ‘ after the election of the 2007 government -2008-2022 ; then it was removed, and councils enabled to make their own judgement on any increase [ or even decrease ]; now it’s back …. For at least one year .
This proposal was clearly the classic rabbit out of the hat and surprised …well virtually everybody . ‘The Scotsman’ on the morning of the key speech by the FM carried announcements of the proposed funding boost for the NHS [ with figures ] and the Arts [unspecified amounts but a claimed reversal of recently signalled cuts ] , but no mention of council tax changes.
CoSLA , the all-party representative organisation for local government was not even informed beforehand and it’s clear that the views there ranged from annoyed and presumably offended at being ignored [SNP office holders] to raging [ most others]. Various statements have demonstrated this , with [SNP ] Cllr Morrison tweeting that the manner of this was ‘…in direct opposition to the principles of the Verity House agreement . The Green party at least had a few hours to mull it over before deciding that such a government-initiated standstill in council tax left them “…concerned about the effect this freeze could have on already-strained frontline public services if it is not properly funded”.
As each day progresses through the week it becomes clearer, as has since emerged in various reports [every Scottish paper] , and media events [ e.g., Debate Night 18th ] , that the Scottish Cabinet weren’t involved in signing off the plans , and ministers couldn’t say how much it might cost, or where the money might be found .
It appears that the government now intends to negotiate with CoSLA on the ‘quantum ‘ of funds to be made available , whilst insisting that the CT standstill will be ‘fully funded’. As the Fraser of Allander institute observed:
‘Whether or not the promise of “fully funding” the freeze in council tax will depend on what the Scottish Government assesses as the counterfactual for what increases in rates would have been – and how that will be put into practice.’
So, it seems there are several aspects to bear in mind over the next few weeks/months .a council tax increase that’s ‘excessive or unreasonable ‘
1] The government cannot ‘FREEZE’ the council tax , whether in 1 or 32 councils . It has powers to reduce such CT increases if they are ‘excessive & unreasonable ‘ . That’s why the incentive payments to all councils in the last phase of such CT standstills was approximately 3% , given then inflation rates , somebody judged that as a ‘reasonable’ increase that would mollify councils.
2] Last year increases ranged from a little under 4% [Perth & Kinross ] to 10% [Orkney], with most others at 5, 6, or 7 %.
3] In terms of current inflation levels 3% is just not a runner , whatever the quantum agreed. The government is sure to insist on one standard figure across all 32 councils and won’t agree to a claim from Mid-Highland that – ‘ …Hhmm… well Minister, we were actually planning to go for about 9% ‘ whereas more candid Mid-Lowland has to settle for 5%.
So, all council will get offered the same %., and actually anything other than that would really put the ball on the slates in local government .
4] It seems highly unlikely, just not possible, that all councils will be offered a degree of financial support that will cover the gaps between planned and inescapable service commitments and the budgets needed to fund such ambitions .
5] However , if you return to the speech the First Minister actually gave , a very significant element of ‘announced’ expenditure [ Health , Arts , Infrastructure ] is not signalled as new expenditure , and may be transferred from elsewhere. It is also , to use a term of trade ‘manana’ expenditure that may occur , may be delayed , may be shelved [ all governments do it ].
6] And of course watch out to see if there is a real rabbit in the hat . It’s possible that in all the budget preparation – which has of course been continuing over the year since the last budget was published – there may be some additional source of funds that are either new or greater than earlier anticipated.
Whatever does develop over future days/weeks/months, expect more talk of ‘Council Tax – what now?‘ and talk of councils planning more cuts, closures , and reviews of services .