All 32 Scots councils agree to ninth successive council tax freeze

10 Feb 16

Scotland is to have a nationwide council tax freeze in 2016/17 for the ninth successive year, after all 32 local authorities accepted finance secretary John Swinney’s £10.3bn funding deal ahead of the Tuesday midnight deadline.

But the package, which the Convention of Scottish Local Authorities says will slash council budgets by £350m – a cash cut of 3.5%, or 5.2% in real terms – has provoked unprecedented bitterness between local and central government, all but obliterating memories of the original concordat reached so amicably between Swinney and COSLA back in 2008.

“There will inevitably be a reduction in the services councils can provide and alongside this significant job losses,” COSLA’s written budget response to MSPs says. 

“Of particular concern is the impact that this will have on the most vulnerable in our society as it is these individuals and families that are the most reliant on the services local government provides.”

Several councils actively considered opting out of the freeze and putting up their council tax. But they concluded that the consequent loss of Scottish Government funding – portrayed by councils as draconian sanctions – would have meant massive tax rises for minimal revenue gain.

The settlement includes £70m to mitigate the costs of freezing council tax levels, plus £88m for delivering a Scottish Government commitment to maintain pupil/teacher ratios, plus £250m in money brought across from the health budget through the merger taking place between health and social care provision.

Swinney has argued that, when these subsidies are taken fully into account, the real impact of the cuts on councils’ overall spending is only about 1%. His description of the settlement is “challenging but fair”.

He has been able to cite in support Scottish Parliament research showing that councils were over-compensated for the first six years of the council tax freeze to the tune of nearly £165m and a benchmarking study by the Improvement Service suggesting councils have thus far managed austerity budgeting without significant harm to services.

But the scale of this year’s additional payments also raised the potential penalties for any council opting out of the freeze, since Swinney made clear that he would withhold that council’s share of all three elements in the package – council tax subsidy, school ratios, social care – amounting to £408m in total.

With Holyrood elections due in May, SNP-led councils have made a show of acquiescing with the logic, but others have voiced angry resentment. Former Labour minister Frank McAveety, now leader of Scotland’s biggest council, Glasgow, said he believed the settlement could be illegal and that his council was ready to challenge it in court to protect services for the people of the city. 

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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