FABIANI WELCOMES COUNCIL TAX CLARITY

COUNCIL TAX FREEZE MORE THAN FULLY FUNDED BY SNP IN GOVERNMENT

LindaEast Kilbride MSP Linda Fabiani has this week welcomed new, independent research which shows that the Scottish Government’s council tax freeze has been more than fully funded.

The new analysis from the Scottish Parliament Information Centre (SPICe) shows that “the money provided by the Government to freeze the council tax has resulted in local authorities receiving more income than they would have done by increasing rates by RPI%” and goes on to say that the funding given to local government was such that “it could be said that the freeze, over the period 2008-09 to 2013-14 was ‘over-funded’”.

SPICe’s research stands in stark contrast to years of claims from the Labour party that the freeze has been underfunded – claims repeated by Labour’s finance spokesperson Jackie Baillie and Deputy Leader Alex Rowley this year.

The fully-funded Scottish Government Council Tax freeze has saved the average Band D household in East Kilbride a total of £1,148 since its introduction.

Linda Fabiani MSP said:

“This independent research, conducted by SPICe shows once and for all that the Council Tax freeze has been more than fully funded by the SNP Government. That freeze has helped council budgets whilst boosting family incomes. Families in East Kilbride have saved an average £1148 since the freeze, helping many in times of tough austerity imposed on us by the Tories in Westminster.

“For years, Labour representatives here in East Kilbride and across South Lanarkshire have condemned the council tax freeze. Either they misunderstand local government finance or they will say anything to try to discredit the SNP Government.

“It is time now to recognise that the freeze has not only protected council budgets, but also helped the finances of struggling families who would have been unable to afford any increase.

“The council tax itself is unfair. Of course, by the end of the year, the Commission on Local Tax Reform will have considered options for reforming the way local tax is funded so as to ensure it is more progressive and gives councils more autonomy and accountability. I look forward to the publication for that report, and the discussions that will follow.”

ENDS

Notes

The report from SPICe states that

“Since the council tax freeze was introduced in 2008-09, there has been much debate over whether it is “under-funded” – i.e. whether the additional £70m paid to local authorities each year is enough to cover what could have been raised had local authorities had control over rates. Of course, there is no way of knowing by how much each local authority would have raised council tax. But estimates can be produced based on the information available, and assuming that council tax rates would have risen in line with inflation.”

“Figure 7 below shows that, in fact, the money provided by the Government to freeze the council tax has resulted in local authorities receiving more income than they would have done by increasing rates by RPI%.”

“Therefore, on the basis that the freeze was intended to compensate for a foregone per annum increase in Council Tax it could be said that the freeze, over the period 2008-09 to 2013-14 was “over-funded”. In total, over the six years, this has resulted in an estimated £164.9m extra going to local government as a result of the freeze.”

“The council tax freeze has been underfunded by the Scottish Government…” (Jackie Baillie, 22/1/15)

https://www.holyrood.com/articles/feature/how-should-local-government-scotland-be-financed

“…the SNP’s underfunded council tax freeze has broken local government finance.” (Sarah Boyack, Press Release, 31/10/2013)

http://www.scottishlabour.org.uk/press/entry/new-report-shows-pressure-councils-are-under-to-fund-services1#sthash.ostg7qoF.dpuf

“the on-going council tax freeze remains underfunded putting even greater pressure on frontline council services.” (Alex Rowley, 11/02/2015)

http://www.alexrowley.org/budget-debate-and-the-local-government-finance-settlement/

Figures on the average saving for Band D properties can be found here: http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx?SearchType=Advance&ReferenceNumbers=S4W-26610&ResultsPerPage=10

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