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.” 

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