Increasing exemptions to additional properties tax
Legislation enabling councils to increase their affordable housing stock without having to pay a tax on additional properties has been introduced in the Scottish Parliament.
Under changes to the Additional Dwelling Supplement (ADS), paid as part of Land and Buildings Transaction Tax, the length of time a buyer moving between properties has to sell their original home in order to be able to reclaim ADS would also be extended from 18 months to 36 months.
Other changes include an exemption for people buying a new property to live in after divorce or separation if they are required by court to keep their previous home. Further amendments will exempt buyers from paying ADS on a property for which missives have been signed when a separate property has been inherited in the meantime.
Public Finance Minister Tom Arthur said: “The Additional Dwelling Supplement is an important source of revenue and in 2022-23 raised £163 million to support vital public services. The tax works well in most cases but we have taken on board feedback about the way it operates in certain circumstances.
“We want everyone in Scotland to have an affordable home that meets their needs, which is why we’re extending the scope of relief for councils to help them increase their affordable housing stock without having to pay tax on additional properties.
“The amendments also take on board feedback that it can be tricky for people moving house to sell their original home within 18 months due to differences in supply and demand in the housing market across Scotland.
“I am grateful to everyone who responded to the Scottish Government’s consultation on these changes and look forward to working with MSPs as the legislation progresses through Parliament.”
£144 million does not fully fund a council tax freeze, COSLA Resources Spokesperson Councillor Katie Hagmann has explained.
Ms Hagmann said: “Disappointingly the Scottish Budget has not provided our local authorities with a fully funded council tax freeze as expected.
“The Scottish Government has set aside £144m stating this will ‘fully fund’ a council tax freeze – this would only provide the income equivalent to a 5% rise.
https://twitter.com/i/status/1744409879027110392
“However, Local Government’s core revenue budget was cut by £63m from the outset, essentially leaving just £81m compensation for a council tax freeze. As a result, Local Government is faced with the reality that the funding offered for a council tax freeze only equates to a 2.8% rise.
“This significantly adds to the pressures faced by councils – a recent LGIU survey found that 83% of Scottish councils were looking at a minimum increase of 5%.”
‘A BUDGET OF MISSED OPPORTUNITIES ON TACKLING POVERTY AND LITTLE FOCUS ON PREVENTION’
COSLA has described the Scottish Government’s Draft Budget as a missed opportunity for the communities of Scotland in relation to tackling poverty.
COSLA also added that Scotland’s Council Leaders, Councillors, the Local Government Workforce and communities should be treated with the respect they deserve demonstrated through investment, not cuts.
COSLA said: “At a special meeting just before Christmas, there was dismay and frustration from Scotland’s Council Leaders about the way Local Government and the communities we represent had been treated in the Scottish Government’s Draft Budget. As the Budget currently stands, communities will see and feel a range of negative impacts.
“COSLA’s ‘Councils are Key’ budget lobbying campaign set out the case for fair funding that would allow Local Government to deliver for the people of Scotland, particularly around tackling poverty, one of the three shared priorities laid out in the Verity House Agreement.
“The response from the Scottish Government to our Budget ask is disappointing and will mean that the potential that councils have to prevent problems occurring will be limited severely.
“Specifically on poverty, the Budget should have had a focus on tackling the root causes of poverty, particularly its impacts on children. This would have needed a greater prioritisation of the work councils do in prevention and early support.
“The essential social supports councils provide in homes, schools, hubs and communities that aim to support and empower people will be further eroded – this has been the case for a number of years now, due to poor Local Government settlements that cut core funding.
“Services that support Local Government to Keep the Promise made to Scotland’s care experienced children and young people like family support and youth work, are under threat as a result of the proposed Scottish budget.
“Tackling poverty in Scotland will continue to be a significant challenge when councils do not have the resources they need to support communities.
“This year’s Budget presented the opportunity prioritise prevention and tackle inequity, to invest in communities and realise our ambitions to end poverty in Scotland.
“It did not deliver. Without a fair settlement for Councils, the poverty gap in Scotland will continue to grow. Investing in Local Government is key to a fairer Scotland.”
“The proposed Council Tax Freeze means that money which could have been invested in tackling poverty upstream – in families, communities and schools – is lost, missing a real opportunity to unlock Councils’ potential.
“COSLA’s President, Vice President and political Group Leaders from all parties have written to the Deputy First Minister and are seeking an urgent meeting.
“Council Leaders will not let this lie, they simply cannot afford to because it will have such a detrimental impact on the communities they represent.”
Delivering the building blocks for Scotland’s future?
More than £5 billion is being invested in building a fair, green and growing economy which creates jobs, supports businesses and helps finance Scotland’s public services and the transition to net zero.
Despite one of the most difficult financial climates since devolution, the Scottish Budget 2024-25 maintains its focus on core priorities and drives forward a government-wide approach to economic transformation.
Measures include allocating £67 million to kickstart a five-year commitment to develop Scotland’s offshore wind supply chain and ensure the country reaps the benefits of the global expansion in wind power. This brings total Scottish public sector support for offshore wind to £87 million next year.
The Budget also boosts annual investment in digital connectivity from £93 million to £140 million in 2024-25, delivering critical infrastructure to enable businesses to innovate and grow while connecting more than 114,000 homes and companies in rural areas to gigabit-capable broadband through the R100 programme.
Since entrepreneurship is at the heart of Scotland’s economic strategy, a further £9 million investment in the Techscalers programme will support the country’s best start-ups with world-class mentoring. The Scottish Government is also prioritising the implementation of Ana Stewart and Mark Logan’s Pathways report, focused on helping more women to start and grow businesses.
The Budget also includes:
putting almost £2.5 billion into public transport to provide viable alternatives to car use, and a further £220 million in active travel to promote walking, wheeling and cycling
providing £358 million to continue accelerating energy efficiency upgrades and installation of clean heating systems
increasing the education and skills budget by £128 million
investing £49 million to promote the re-use of resources and reduce consumption, modernise recycling and decarbonise waste disposal as part of Scotland’s transition to a circular economy
Wellbeing Economy Secretary Neil Gray said: “Our focus is on creating new opportunities for a highly productive, competitive economy, providing thousands of new jobs, embedding innovation and boosting skills.
“We are using all the powers we have to support business and to achieve our ambitious net zero targets. Our strategic investment in offshore wind will stimulate and support private investment in the infrastructure and manufacturing facilities critical to the growth of the sector, and we are delivering a real-terms increase in the education budget to help boost skills and increase productivity. As a priority, we will also consult on options for improving the capacity of local authority planning services.
“Scotland’s finances face a worst-case scenario of underinvestment, which means we must make the difficult choices necessary to focus our limited resources on what will deliver most effectively for people and businesses.
“We’ve seen an Autumn Statement that prioritised a tax cut over investing in public services and infrastructure. The Scottish Government cannot follow this, and has not shied away from taking the tough decisions needed to protect and grow this country’s economy.”
COSLA: Council Tax Freeze is NOT Fully Funded
The Scottish Government has delivered a major blow to communities and has put councils at financial risk with a cash cut to Local Government in its draft Budget (published on 19th December) and no provision for inflation or pay increases, COSLA said.
COSLA Leaders described the draft Budget as not only leaving councils at real and significant financial risk for the coming year, but as it stands, it will mean cuts in every community in Scotland and job losses across Scottish Local Government.
Following a full meeting of Council Leaders yesterday (Thursday) COSLA said that whatever way the Government presents the figures, the reality is that once again the people in our communities have been left at the end of the queue.
That is why we are calling for urgent discussions with Scottish government to ensure a meaningful negotiation on the budget takes place before the final budget is presented to Parliament.
Speaking yesterday afternoon, COSLA’s President Councillor Shona Morrison said: “COSLA’s initial analysis, shows a real terms cut to our revenue and capital spending power which will leave Council services at breaking point, with some having to stop altogether.
“The Budget in its current form could result in service cuts, job losses and an inevitable shift to providing statutory services only. This means potentially losing Libraries, leisure centres and all the things that improve our lives.
“COSLA’s initial analysis of the Budget is that the Council Tax freeze is not fully funded. Leaders from across Scotland agreed today that decisions on Council Tax can only be made by each full Council, and it is for each individual Council to determine their own level of Council Tax.
“With any sort of shortfall in core funding, the £144m revenue offered for the freeze is immediately worth less.”
COSLA Vice President Steven Heddle said: “Despite the Verity House Agreement rhetoric about working together on shared priorities it is the same outcome at Budget time for Local Government in reality.
“The Scottish Government is claiming to protect public services, but are not protecting the essential public services provided by councils– Scotland’s councils are key, they deliver your homecare, schools, road maintenance, street lighting, leisure and waste services and have been locked out again.
“We needed increased funding to cope with inflation, but have been given less instead. The cut to Revenue funding we have been given is a devastating blow and the cut to our Capital funding means that we will be unable to meet our targets in terms of a move towards Net Zero and mitigating climate change targets.”
COSLA’s Resources Spokesperson Councillor Katie Hagmann said: “The Scottish Government has disappointingly failed to recognise that investment in Councils is investment in cities, towns and villages across Scotland. As it stands, this is not a good Budget for our communities or the people who deliver our essential front-line services.
“This is a Budget which will mean job losses – real jobs that support families, and deliver vital services that make a positive difference to people’s lives. Sadly, the budget as it stands, leaves nothing for meaningful pay rises in 24/25 so we would call on the Scottish Government to look again, so that our workforce can get the pay rise they deserve next year.”
COSLA Vice President Councillor Steven Heddle has sent a strong warning to the Scottish Government that any Council Tax Freeze must be fully funded.
COSLA’s message is a response to comments made to the media by Deputy First Minister Shona Robison on Sunday.
Councillor Heddle said: “There were a few things in the comments made by the Deputy First Minister yesterday (Sunday) that I am uncomfortable with on behalf of COSLA, our member councils and the communities that we represent.
“Firstly, the Deputy First Minister cannot decide or unilaterally say that the ‘Council Tax freeze to stay’- it’s up to 32 individual council to decide if they have a council tax freeze or not, not her government.
“Secondly, unless it is funded with additional money for each council that allows them to fund their planned Council Tax increases, then it is not fully funded, and it will be our service users who will suffer as a consequence.
“The funding for the freeze needs to be transparently additional and consolidated into our Budgets for future years.”
“The DFM also mentioned the ‘Changing shape of public sector workforce’. Local Government’s workforce has already changed shape drastically. Between 2006 and 2018, the Local Government workforce reduced by 15% (35,000 FTE) before Scottish Government policies such as Early Learning and Childcare added staff back in from 2019.
“The Scottish Government workforce has nearly doubled since 2006; staffing in non-departmental bodies has also doubled and in Scottish Government agencies, staffing has grown by 15%. These increases have added more than 7,000 FTE staff in just over 15 years.
“The Verity House Agreement was designed to ensure positive working between Scottish Local Government and The Scottish Government, and a focus on better outcomes and person-centred services.
“The VHA has three priorities – to tackle poverty, particularly child poverty; to transform our economy through a just transition to deliver net zero, recognising climate change as one of the biggest threats to communities across Scotland; and deliver sustainable person-centred public services.
Local Government will be unable to contribute to these if underfunded.
“COSLA knows that Scottish Government is under pressure financially around this Budget. However, the Council Tax freeze came out of the blue and has serious financial implications.
“And any suggestions that Local Government’s workforce needs cut further will have serious consequences for communities.”
Alleviating Poverty in Scotland requires investment in Local Government COSLA said today (Monday).
Commenting ahead of the Scottish Budget announcement tomorrow, Councillor Tony Buchanan, COSLA’s Children and Young People Spokesperson said: “If Scotland is to make progress towards alleviating and eradicating poverty, this year’s Scottish Budget must focus on tackling the root causes, with a greater prioritisation of local prevention and early-intervention work – and Councils are key to this.
“This means investment in the essential social supports provided everyday by Councils, in schools, in local community hubs, at the right place, at the right time.
“If the core services aimed at supporting and empowering people to reach their full potential are eroded, as they have been over the last few years as a result of cuts to our core Budgets, then tackling poverty in Scotland will continue to be a significant challenge.
“Action to address poverty and deprivation was noted as a key priority for Scotland in the concluding report on children’s services reform research published by CELCIS last week and reinforces the importance of the shared priority within the Verity House Agreement.
“For too long now, the financial settlement for Local Government has meant that Councils have had to cut spend to services which are needed to tackle poverty – whether they are youth work, social work support or breakfast clubs
This year’s Budget presents the opportunity to reverse this trend, to invest in communities and realise our ambitions to tackle poverty in Scotland.
“Without a fair settlement for Councils in tomorrow’s Budget, the poverty gap in Scotland will continue to grow.
“Investing in Local Government is key to a fairer Scotland.”
Details of progress towards a new fiscal framework between the Scottish Government and Local Government have been published.
The Verity House Agreement committed the Scottish Government and COSLA to establish a new framework, which will govern how councils’ funding is negotiated and agreed.
It is intended to give councils greater flexibility over their budgets to deliver our shared priorities and meet local needs.
Publishing the update together with COSLA, Deputy First Minister Shona Robison said: “We have made good progress on the new fiscal framework, which is an important plank of the Verity House Agreement and our commitment to better partnership working with local government.
“Already many of the principles we have agreed together are being put into practice, such as improved engagement ahead of the publication of the Scottish Budget and joint working to consider new local tax powers.
“We will continue to work closely with COSLA to progress the next phase of work and continue the positive discussions we’ve had with them on behalf of local councils across Scotland.”
COSLA Resources Spokesperson Councillor Katie Hagmann said: “I welcome this update on progress towards the new fiscal framework – getting this framework in place is a priority for Local Government.
“The new framework should, when complete, give councils greater flexibility over our budgets and enable us to deliver our shared priorities and meet local needs. It will also see much earlier budget engagement.
“The Verity House Agreement commits both spheres of Government to establish a new framework, and it is positive that we have made progress this year but there is more to do, which Ms Robison and I both acknowledge.”
With a record number of councils expected to declare bankruptcy this year, over 60 council leaders and chief executives have contributed to a new Local Government Information Unit (LGIU) manifesto that – if implemented – could prevent millions of people from living in bankrupt boroughs in 2024/25.
Today’s report, LGiU@40: For the Future of Local Government, calls for a new covenant between central and local government that agrees: an immediate end to competitive bid funding; a return to multi-year financial settlements and early consultation on budgets.
According to the report, almost all leaders and chief executives consulted felt that the level of challenge they were dealing with right now was unlike anything they had seen in their careers to date. Uncertainty over funding and being prevented from making long-term decisions were their biggest complaints and they urged a return to multi-year financial settlements.
The LGIU’s annual State of Local Government Finance report earlier this year revealed only 14% of senior council figures have confidence in the sustainability of council finances and 7.5% – 12 different councils – said there was a danger that financial constraints could risk their capacity to deliver their statutory duties – the essential services they are legally required to provide.
This new manifesto was informed by interviews with more than 60 chief executives and leaders from councils of all sizes, types and political control across England, Scotland and Australia, as well as new research that compares the British local government system to those in Italy, Germany and Japan.
Compounding the funding crises are concerns around status – that central government treats councils as subordinate entities and exerts excessive central control, constraining local government’s autonomy. The new covenant should commit to a system where successful local autonomy is embedded within, and supported by, continual systems of active cooperation between different levels of government.
In addition to the immediate calls for action, the report proposes several longer-term measures includingmoving to open devolution, a review of taxation and a single local (or sub-regional) budget for spending on all services.
LGiU@40: For the Future of Local government was launched today at the LGIU’s first annual Local Democracy Research Centre (LDRC) symposium where guest speakers included Professor Patrick Diamond, Dr Madeleine Pill, Professor Liz Richards, Professor Richard Eccleston, Dr Peter Eckersley, Theo Blackwell MBE (Chief Digital Officer, Mayor of London), and Keiran Pedley (Research Director, Public Affairs, Ipsos).
Jonathan Carr-West, Chief Executive, LGIU, said: “Eight councils have now declared bankruptcy leaving nearly 2 million residents facing higher bills for a bare minimum service.
“LGIU research indicates that 12 more councils could declare bankruptcy in 2024/25 and we are calling on the Government to prevent millions more people from being forced to live in bankrupt boroughs by bringing an immediate end to competitive bid funding and returning to multi-year financial settlements based on an area’s need.
“Local government is responsible for care homes, vulnerable children, emergency accommodation, leisure centres, libraries and so much more. Essential services that genuinely change millions of people’s quality of life on a daily basis.
“Councils are pulling every lever available to stay afloat: raising council tax, raising charges, cutting services, increasing commercial investments, spending finite reserves and selling assets but it is simply not enough. The link between funding and need is completely broken.
“As more and more councils warn that they will soon be unable to balance their books, this is clearly a moment of crisis for local government. But it’s also a moment of opportunity.
“We’re already in the run-up to the next general election; whoever is in government after that election has the opportunity to reset the relationship between central and local government, to finally give councils the tools they need to be the force for change we all need them to be.
“The chief executives and leaders interviewed for LGIU@40 are sending a clear message. We are at a point of crisis, if we fall over the consequences for the country as a whole are catastrophic, but if we are set free to deliver, the opportunities are endless.”
Councils are keyto unlocking both the potential and the best outcomes for our local communities but require proper funding to do so, COSLA said yesterday.
The comments came as COSLA launched their Budget Lobbying campaign for the coming year, ahead of the Scottish Government’s Budget announcement on December 19th.
COSLA President, Councillor Shona Morrison, said: “Councils really are the key to unlocking the best for our communities – from safe, quality housing; to clean streets; to supporting the most vulnerable people to thrive; to education and social care – the importance of these services cannot be emphasised enough, but they need to be funded properly.
“We all see the headlines in our local and national press about the difficult financial choices councils need to make, deciding whether to reduce or even cut vital services and ending funding for essential charity and community partners.
“Unfortunately, Councils have no choice but to protect core statutory services, especially with the unprecedented financial challenges we are all experiencing. Budgets are tight, creating risks to many other local services our communities rely on, such as programmes supporting children and young people, sports and leisure facilities and public transport.
“The Verity House Agreement has facilitated positive working between Scottish Local Government and Scottish Government since being signed in June, but COSLA is clear that we must use this to jointly tackle poverty, make a just transition to Net Zero, and achieve sustainable public services.
“Fair funding for Local Government must be a Scottish Government priority in order to unlock the full potential of our councils to achieve these goals.
“The campaign we are launching today clearly illustrates not only the challenges our Councils are facing, but the great potential they have if funded properly. We will continue to work closely with Scottish Government and other partners to get the best deal for our councils and our local communities.”
COSLA Resources Spokesperson Councillor Katie Hagmann added: “What councils deliver with and on behalf of communities is key to creating the safe, healthy, vibrant and empowered communities we all want to see.
“Local Government holds the key to unlocking the potential in local areas, with its unique understanding of context, challenges and opportunities in individual local areas.
“Sadly, our reality right now is an extremely challenging financial climate coupled with years of real-terms cuts to council budgets while additional policy commitments are continually being introduced.
“If this situation doesn’t start to improve soon, it will mean tough choices being made and the many essential services councils currently provide will cease – services that not only address problems on the ground, but actively prevent bigger issues occurring down the line.
“We have been clear that cutting frontline staff isn’t the answer. We need to see Scottish Government investing in Local Government, so we can do what we do best – preventing problems in the first place and improving quality of life.
“The challenges we face nationally are best addressed at the local level, not at crisis point in A&E or within the criminal justice system. From better health to reaching our net zero ambitions to improving our economy, a well-funded Local Government is the key to Scotland achieving a better future.”
LGIU Scotland and CCLA were proud to unveil the winners of the 2023 Cllr Awards; the only national awards ceremony to celebrate the vital work of local councillors across Scotland.
At Edinburgh’s City Chambers, the top prize of the night, Leader of the Year, went to Cllr John Alexander of Dundee City Council.
Cllr Ruairi Kelly of Glasgow City Council walked away with the Community Champion prize and Cllr Heather Woodbridge of Orkney Islands Council claimed Resilience Champion.
Cllr Dan Hutchison, of Glasgow City Council, went home with Young Councillor of the Year while Cllr Helen Wright from Dundee City Council was awarded Lifetime Legend for her service.
Winners triumphed over nearly 100 nominations across five categories that celebrate the wide-ranging work of councillors. The Cllr Awards are a hugely important way to champion what councillors do locally as their work can, all too often, go unrecognised. Read more about the winners here.
The Cllr Awards judging panel was made up of senior councillors and leading stakeholders from across the sector. These are the only national awards to celebrate and showcase the work of individual councillors across Scotland and are only made possible thanks to the generous support of founding partners CCLA.
Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU) Scotlandsaid: “In the face of unprecedented domestic and global challenges over the last year, councillors nationwide have once again exhibited unwavering dedication to serving their constituents.
“Tonight’s winners show the remarkable contributions local councillors make to their communities and we at LGIU Scotland are dedicated to celebrating these achievements that genuinely improve the lives of local residents.
“As councils continue to deliver essential services like social care and housing amid a cost of living crisis, these awards are a hugely important way to champion what councillors do locally. I extend heartfelt congratulations to all the Cllr Awards winners this evening. We applaud you for your dedication.”
Minister for Local Government Empowerment, Joe FitzPatrick MSPsaid: “As someone who was previously a councillor, I recognise the important role councils play in delivering vital frontline services for our communities.
“Every councillor nominated for these awards exemplifies this spirit of public service and I congratulate them all.
It is crucial the Scottish Government works in partnership with local government to achieve the best possible outcomes for people. This approach, which is built on mutual trust and respect, is particularly important as we work to help people through the current cost crisis.”
