Everything you know about the council tax freeze is wrong
Labour continually claim that the Council Tax freeze is regressive (bad for the poor), and that it is the cause of cuts to council services. I’m not sure if they are lying or just stupid.
It should be remembered that the council tax is only a slight variation on the poll tax. The owner of giant mansion pays just three times as much tax as the owner of a one bedroom council flat. Wings Over Scotland reported last year on an academic finding that “raising Council Taxes actually raises inequality.” Council Tax is regressive, and freezing it helps the poor.
Of course, taxation is only one half of the equation. The poor access more public services than the rich, and so suffer greater harm from cuts. Has the council tax freeze harmed council budgets? I had a look at the figures.
The first thing to notice is that Council Tax makes up just 10.8% of Council income. Changes in Council Tax revenue are 14.7% of the total change in the budget, £149m of the cuts. This figure includes losses from Council Tax cuts, such as the cut by Stirling’s Labour / Tory coalition in 2012.
Meanwhile, business rates have gone up by £108m! The net effect of tax changes is £41m of the £1,015m cut to Scottish council budgets since 2009. Even by Scottish Labour standards it’s one hell of a bending of the truth to blame cuts in council services on the Council Tax freeze.
The fall in sales, rents and fees, presumably a result of the recession, is around the same size as the council tax changes. Both are dwarfed by the £371m fall in General Revenue Funding and a £448m fall in “Other Income.” I couldn’t find a clear definition of Other Income, but cross-referencing with the Scottish Budget suggests that it is mostly miscellaneous central government funding. Around £1bn of cuts have been made to Holyrood spending on local government since 2009.
The cuts to council funding from central government are severe, but must be seen in the context of Westminster’s £3,737m per year cut to the Scottish departmental expenditure limit since 2009. Local government cuts are caused by Westminster block grant cuts, not by the council tax freeze.
In fact, that SNP have reduced a regressive tax on homes and increased a tax on businesses. Tartan Tories, my arse.