Thursday, 11 December 2014

Let it go, let it go..

Tom Gordon

THE council tax freeze will deprive public services of an eyewatering £2.5billion by the end of the current parliament, according to new official figures. 

The scale of the cost, revealed in a briefing published by Holyrood’s financial scrutiny unit, has brought renewed calls for the freeze to end.

The freeze works by ministers giving councils around £70m to offset each year's inflation - with tough penalties threatened against any council which refuses. 

The result is that the average bill for a Band D home has remained £1149 since 2007-08, but hundreds of millions of pounds have been diverted from public services to pay for it.  
The cost to the public purse in year one was £70m, then £140m in year two, £210m in year three and so on, resulting in a rapidly spiralling bill.

The Scottish Parliament paper looks ahead to next year's budget for 2015-16, and the amount of money being allocated to Scotland’s 32 councils.

It states: “The total cost of the council tax freeze in 2015-16 is £560m, and the total cumulative cost from 2008-08 is 2015-16 is £2,520m.” 

A senior local government source said:  “This is both a huge and more importantly a legitimate figure from the Parliament which shows that we in local government have not been fully funded for a number of years in relation to the exorbitant cost of the council tax freeze.  

“The freeze puts a massive hole in our ability to deliver services and is a prime example of the gradual erosion of local democratic accountability and responsibility.”

From the Scottish Parliament's Financial Scrutiny Unit Briefing
The Holyrood research paper also shows revenue funding for every council falling this year, with an average drop of 1.3% across Scotland.

Critics say that by subsidizing councils to keep the tax frozen, the Scottish Government removes cash from other public services and denies councils the chance to raise even more money by setting tax rates themselves. 

The freeze is also attacked for saving those in the largest houses the most money, with the very poorest seeing no gain at all, as their council tax is met through benefit. 

According to the Scottish Government’s own figures, between 2008-09 and 2013-14, the freeze saved the average Band A household paying the tax a total of £258.

But the average Band D household saved £678 and the average Band H house £1,535.

Unfrozen: even Princess Anna was thawed in a day
Supporters say the freeze is backed by voters, has eased the burden on households since the 2008 crash, and sees the poor receive the most help as a percentage of household income. 

One of the SNP’s most popular policies since it was introduced in 2008, the freeze is an accidental byproduct of a failed attempt to abolish council tax.

The Nationalists only planned to freeze the levy short-term before replacing it with a local income tax (LIT) of 3p in the pound.

However in early 2009, the SNP government scrapped the plan, ostensibly on the grounds that it did not command enough support in parliament.

It later emerged that LIT would not have raised enough cash in the recession, a fact ministers tried to stop coming out with a legal challenge to a freedom of information request. 

Last month, First Minister Nicola Sturgeon announced a cross-party commission to come up with a "fairer" alternative to the current council tax system.

Council tax freeze: it was only meant to go on this long
STUC deputy general secretary Dave Moxham said the freeze should end immediately, with council tax rebanded to make it fairer pending a full review of local government funding.

“Enough is enough," he said.

"This year alone the freeze is worth as much as free person care. It’s a massive amount as we debate whether we can afford universal benefits.

“The Scottish Government says it’s fully funded, but there must be other areas of public sector not getting funded as a consequence, and councils are raising charges for services.” 

Council umbrella group Cosla, which wants council tax made more progressive by adding to the current eight bands, said: “We welcome this figure being outed. We have always said that the cost of this policy was enormous.  

“However the truth is that in all reality there is not a great deal councils can do in relation to the council tax freeze as the penalties for breaking it are so severe.” 

A Scottish Government spokesman said: “As the council tax freeze has been fully funded, it has not had an impact on the funding of essential services. This freeze is helping taxpayers and providing much needed financial relief to vulnerable groups, including pensioners.” 

Tuesday, 9 December 2014

Save Our Swinson

The LibDems are putting a brave face on Alex Salmond's tilt at the Gordon seat in the general election. 
The former FM is a shoo-in and all concerned know it.
LibDem candidate Christine Jardine will undoubtedly put up a spirited fight, but the truth is the party is not about to divert cash and manpower to a long-shot like Gordon next May.
If you follow the money, it's clear the LibDems are focusing elsewhere.
As you might expect, Danny Alexander's Inverness, Nairn, Badenoch and Strathspey seat is attracting a lot of big donations (mostly from Ministry of Sound founder James Palumbo).
But the sleeper story is how much cash is being poured into Jo Swinson's East Dunbartonshire constituency by friends of Nick Clegg who've never shown much interest in Scotland until now.
Swinson's seat is the most marginal of the 11 held by the LibDems in Scotland.
Swinson is also the party's only female MP north of the border.
This week, the Scottish LibDems announced seven of their eight regional list rankings for Holyrood in 2016
In terms of gender balance, they're appalling.
Not only are men ranked first in six of the seven, but in the North East, the party's only female MSP, the admirable Alison McInnes, is ranked second behind deserving 2011 loser Mike Rumbles.
Saving Swinson now looks more important than ever to the party of fairness and equality. 

Tom Gordon

THOUSANDS of pounds from English donors and Nick Clegg’s inner circle are being used to rescue a Scottish LibDem MP at the general election, according to official records.

Electoral Commission files show that in recent months unprecedented sums of cash have been pumped into the LibDem branch in East Dunbartonshire, near Glasgow, the seat of employment and equalities minister Jo Swinson.

Swinson, 34, a Clegg ally and MP since 2005, narrowly held the constituency in 2010 with a majority of 2,184 over Labour.
Swinson: holds most marginal LibDem seat in Scotland

The seat is the most marginal of the 11 held by LibDems in Scotland, and would fall next May on a swing to Labour of just 2.3%.

The SNP, who came fourth in the seat in 2010, would need a swing of 14.1% to win it.

To help avert defeat, the party has hired a full-time campaign manager for the seat, which is now being flooded with out-of-town cash.

Over the last decade, cash donations to the East Dunbartonshire branch recorded by the Electoral Commission averaged around £2000 a year.

However between April and August, donations hit £46,365, with three-quarters of the money coming from donors based in England.

Local businessman and previous donor Jacob Aagard, a Danish-born Scottish chess grand master and chess publisher, gave £10,000.

But the rest came from two high-power fundraising dinners for Swinson’s re-election.

The first, which raised £24,500 in June, was arranged by London-based Brompton Capital Ltd.

The company, which has no other declared donations in Scotland, is the largest corporate donor to the LibDems, giving £1.4m since 2010.

Its boss, Rumi Verjee, the founder of Domino’s Pizza in the UK, was made a LibDem peer in 
2013. Brompton, which put £3,350 into arranging the dinner, also chipped in £5000 cash.

Giving £3,750 at the dinner was Neil Sherlock, a former KPMG partner married to a LibDem peer, who was made Clegg’s special adviser in 2011 after giving the LibDems £88,000.

His donation to Swinson’s branch is a sure sign the highest eschelons of the party are mobilising to save her career.

Sherlock had never previously given a recorded donation to a Scottish LibDem branch.
Neil Sherlock: gave £3,750 at fundraising dinner for Swinson

Another £3,750 came from Alistair Barr, chair of the Cities of London and Westminster LibDems Executive, whose previous £12,000 to the party went mostly to Westminster and Haringey.

He also gave £2000 to Swinson’s branch in April.

Long-term LibDem donor Duncan Greenland, who has given the party more than £200,000 since 2004, gave £5000 at the dinner.

A former French vineyeard owner and ex-LibDem councillor in Camden in London, Greenland appears never to have donated previously to a Scottish branch. 

Michelle Quest, a donor to the Yeovil branch, also gave £2000 at the shindig.

And another £2000 came from ex-LibDem councillor Jane MacTaggart, another rookie time Scottish donor, who usually donates to her local Oxford West and Abingdon branch.

A second dinner hosted by former party leader Paddy Ashdown at the LibDems’ UK conference in Glasgow in October raised a further £11,865.

The £45-a-head affair “in support of Jo Swinson’s re-election campaign” included a £2111 wedge from LibDem peer Baroness Brinton

A Scottish Labour spokesman said: “No amount of money can help Jo Swinson escape from the fact that she is part of a government which has left families in her constituency £1600 a year worse off, seen energy prices soar and inequality widen. In May  the people of East Dunbartonshire face a a clear choice, a vote for Scottish Labour’s Amandjit Jhund or Jo Swinson and the coalition government.” 

A LibDem spokeswoman said: “If Labour are complaining that people are donating money to us to beat them then that’s Labour’s problem. Labour are obviously in a state of blind panic as they’re about to lose grip of their heartlands because they ruined the economy, destroyed jobs and slashed incomes.” 

Monday, 8 December 2014

Self Assessment

There's a lot of cynicism about politics and government. 
So how refreshing to hear a senior official being brutally honest recently. 
Eleanor Emberson, head of Revenue Scotland, admitted her estimates for the cost of the new tax collection service had proved inaccurate and she needed lots more staff than planned.
Hence the bill jumping twice in recent months.
Not a great sign for a service where money and maths are supposed to be central.
But certainly refreshing - if not reassuring.
Here's the story

Tom Gordon

THE bill for Scotland’s fledgling tax collection system has risen yet again - with managers forced to recruit a third more staff than planned.

Originally priced at £16.7m, the cost of Revenue Scotland is now more than £21m.

The running cost of the quango, which will initially collect two devolved taxes from April, was included in the SNP’s independence White Paper in November last year.

However within a month it had to be revised upwards by £3.5m, or 21%, to £20.2m in order to take account of extra activity and investment.

According to evidence presented to Holyrood’s finance committee recently, that figure was later adjusted to remove the cost of a new tax tribunal system, taking it down to £19.5m.

But in her six-monthly update to MSPs, Eleanor Emberson, the head of Revenue Scotland, said the cost had risen again by 9%, to £21.2m.

The bill covers the running costs from April next year to March 2020, and is on top of one-off start-up costs of £4.5m.

Kenneth Gibson, the SNP convener of the Finance Committee, described the latest price hike as “quite significant”, while grilling Emberson.

She said the extra was “almost exclusively staff costs”, as Revenue Scotland had raised its staffing from 30 to 41 in order to ensure the new system runs smoothly.
Eleanor Emberson: told Finance Committee her estimates had proved wrong

“My estimates have not turned out to be completely accurate,” Emberson admitted. 

“I am being honest about that. We have had to put in additional resource to deliver. 

“However, the bulk of the difference between £16.7m and £21.2m is to do with ensuring that the design of the systems matches the aspiration for Scotland.”

Emberson also stressed the running cost was less than the £22.3m Her Majesty’s Revenue & Customs (HMRC) would have charged to collect the new devolved taxes, the Land and Buildings Transaction Tax and the Scottish Landfill Tax.

Tory MSP Gavin Brown, who sits on the Finance Committee, said: “I’m concerned we have had cost increases several times and would like a guarantee from the government that it’s not going to increase further as we get closer to the launch date. The bill is now roughly similar to what HMRC would have charged. 

“Given one of the reasons for creating Revenue Scotland was that it would be cheaper than 
HMRC, it raises questions about the Scottish Government’s initial decision.”

A Government spokesman said: “Costs for setting up and running Revenue Scotland demonstrate good value for money and remain below the original estimate provided by HMRC.” 

“These costs include additional plans to enhance Revenue Scotland’s tax collection capacity, 
over and above that currently provided by HMRC. These include an IT system to support additional work on tax compliance, and new measures to address illegal landfill dumping.”