STUC: ‘Today’s announcement will only make situation worse’
COSLA: ‘We were unaware of it in advance‘
Council tax rates will be frozen in the next financial year to support people struggling with the effects of high inflation, the First Minister has announced.
The freeze will benefit every Council Tax-payer in Scotland at a time when rising prices are putting significant strain on household finances. The Scottish Government will fully fund the freeze to ensure councils can maintain their services.
First Minister Humza Yousaf said: “Today’s announcement will bring much needed financial relief to those households who are struggling in the face of rising prices. Council tax is already lower in Scotland than elsewhere in the UK, and some 2.5 million households will now benefit from this freeze.
“Of course, the public sector across the UK is facing budget pressures as a result of UK Government austerity, and we know councils are facing financial challenges themselves. That’s why the Scottish Government will be fully funding this freeze to ensure they can continue providing the services on which we all rely. This is on top of the real-terms increase to local government revenue funding this financial year.
“The Scottish Government remains wholly committed to the Verity House Agreement, and as part of that are continuing work with COSLA on a new fiscal framework for local authorities.
“We are also working on longer term reforms to the council tax system, which are being considered by the working group on local government funding that we are chairing jointly with COSLA.”
A COSLA Spokesperson said: “We have just heard the announcement made at the SNP Conference in relation to freezing council tax. We were unaware of it in advance.
“This has longer term implications for all councils right across the country, at a time when we know there are acute financial pressures, and where we are jointly looking at all local revenue raising options.
“We will need to consider the implications for COSLA and Local Government with our members when we get more of the detail.
“This will also need to be examined against the principles of the recently signed Verity House Agreement.”
COSLA arranged an emergency meeting of their Executive, who issued the following statement:
There is absolutely no agreement to freeze Council Tax next year COSLA’s Presidential Team said today (Wednesday 18th October).
“The announcement of a council tax freeze as we said yesterday was made completely without reference to Local Government and there is no agreement to freeze council Tax next year, the decision to freeze council tax is one which can only be made by Councils.
“Our Cross-Party Group Leaders held an emergency meeting first thing this morning on the back of the announcement and there is real anger at the way this has been handled and what it puts at risk.
“On the back of this our Political Group Leaders also asked us to seek an urgent meeting with the First Minister.
“We deplore the way the announcement was made and its substance, both of which fly in the face of the Verity House Agreement which we all recently signed.
“It has been shown that previous council tax freezes have been regressive, having no impact for the poorest in society and eroding the council tax base, compounding councils’ ongoing underfunding.
“We will explore the implications arising and what the Scottish Government might propose when we meet with the Deputy First Minister later today – but we are clear that local taxation and particularly Council Tax should be left for democratically elected councils to determine.”
THE STUC responded swiftly to the First Minister’s announcement of a council tax freeze:
THE Scottish Greens, the SNP’s partners in government, have also expressed concerns. Scottish Greens finance spokesperson Ross Greer MSP said: “We are concerned about the effect this freeze could have on already-strained frontline public services if it is not properly funded.
“Our local councils and people who rely on services like social care, schools and early years centres must not lose out as a result of this announcement.
“Green MSPs will now work with our government colleagues in the SNP to work through the details, ensure that their decision is sustainably financed and that the most vulnerable people in our communities do not see the services they rely on being underfunded as a result.
“The First Minister is right to want to support those who are struggling the most through the cost of living crisis, but the way to do that is to completely replace the deeply unfair Council Tax with a more progressive system.
“As we have repeatedly highlighted, council tax is a ludicrously broken system. It hasn’t been accurate since before I was born, with most people now paying the wrong rate as a result of those 1991 valuations.
“The Scottish Greens have ensured that Scotland’s income tax system is the fairest in the UK, raising a billion pounds more every year for essential services like the NHS and our schools by asking those earning the most to pay a bit more.
“That is the progressive approach we will take once again as we work with SNP colleagues to agree the national budget for 2024-25.”
Jonathan Carr-West, Chief Executive, LGIU Scotland, said: “LGIU Scotland is deeply concerned by yesterday’s announcement from the First Minister to freeze council tax.
”The lack of consultation with local government demonstrates a failure of the principles of trust and respect that should be the foundation of the working relationship between the Scottish Government and local authorities and which are at the heart of the Verity House Agreement.
“Our research shows how important it is that local government is empowered to make decisions regarding its financing. International comparisons clearly show the detrimental impact that undermining the financial independence of local authorities has on the financial sustainability of the sector and the delivery of essential local services.
“Freezing council tax should be a decision for councils, not for central government. Even where those freezes are funded by grants, the loss of growth in the council tax base undermines the council’s finances for years to come. Many councils in England are still recovering from this nearly a decade on.
“Everyone aspires to a sustainable, stable future for local government finances but this can only be achieved by giving councils control, not by imposing decisions upon them.
“Scotland had seemed to be making good progress in this regard with the Verity House Agreement and commitments to empowering local government. So it’s disappointing to see this backward step.”