Scottish council tax freeze timing questioned
By Keith Aitken | 10 September 2012
Scotland’s council tax freeze might not last the five years promised in the Scottish National Party’s successful election campaign last year, according to the new leader of Scotland’s local authorities.
Speaking exclusively to Public Finance, David O’Neill, president of the Convention of Scottish Local Authorities, also called for the constitutional status of local authorities to be entrenched in law.
O’Neill, who led North Ayrshire council for Labour until its capture by the SNP in May, deplored the ‘rather undignified lottery’ of last year’s Holyrood election. Labour went from opposing a council tax freeze to promising a three-year one, while the SNP hiked its promise from a three- to five-year freeze.
He said it was for individual councils – not for ministers or Cosla – to decide how long the freeze should apply, although he did not expect ‘dramatic changes’ during the three-year period of the current -spending review. Anything beyond that would be a matter for negotiation.
While acknowledging the policy’s -popularity, O’Neill said: ‘The political parties didn’t come out of it particularly well.’ Echoing a phrase popularly used in Scotland about Margaret Thatcher, he added that there was a ‘democratic deficit’ in imposing the freeze.
‘It was certainly an instance where the Scottish Government, in my opinion, used undue influence on local government. But that doesn’t mean that I am advocating that the council tax should go up.
‘When I was leader in North Ayrshire, I made it clear I wasn’t going to ask people to pay more at a time when services were being reduced,’ O’Neill said.
He added: ‘Is it sustainable for five years? You’d really need to ask [Finance Secretary] John Swinney whether it’s -sustainable, but it has certainly reduced his flexibility, and it certainly has reduced the flexibility of local authorities.’
The cost of compensating councils for the freeze has risen from £70m in its first year to £280m, O’Neill said, adding that this still did not fully fund the deficit.
‘Had that £280m been available as the basis for prudential borrowing, we could have borrowed about £4bn. So the Scottish Government didn’t just reduce local authority flexibility, they also reduced their own flexibility.’
O’Neill was more enthusiastic about the other dimension to the Concordat with ministers negotiated by his predecessor Pat Watters – the removal of ring-fencing around large areas of council spending. O’Neill said this should be ‘the default position’.
He spoke repeatedly of a need for robust public institutions, such as councils.
‘It’s unique in the UK that there’s no constitutional guarantee for local government. The Scottish Government could abolish local government if it wanted to.
‘I want that changed because, first, the services we deliver are vitally important to the communities we represent and, second, it is an important safeguard for democracy to have strong institutions, effecting checks and balances on one another.’
He said talks were ‘ongoing’ with -ministers about entrenchment, which would probably need primary legislation.