The council tax freeze damages more than just council budgets

Ever since the draft budget was announced in December, relations between local authorities and the Scottish Government have been becoming increasingly acrimonious, a bit like an estranged couple trying to work out a divorce settlement. In the media.

And like many dysfunctional relationships, it seems there’s a bit of fault on both sides. While I don’t believe the council tax freeze is politically motivated to clip the wings of councils in the same way as it is in England, the effect is much the same.

Cutting the central grant at the same time as continuing the freeze, is like throwing someone in a river with their hands tied behind their back. The failures resulting from it will rebound on councils rather than the Scottish Government.

Most people, even those engaged enough to respond to budget consultations, don’t have an in-depth understanding of how council budgets work. This can be seen from the responses to The City of Edinburgh Council’s budget consultation which suggested that not extending the tram route could resolve the revenue budget shortages. Only they didn’t use the words revenue budget of course.

If people’s bins aren’t emptied as often as they like or their elderly relatives don’t receive care, leisure centres close and parking becomes more expensive, explanations about budget cuts being passed down will not mean much. Residents will just think their council is inept.

And the freeze does no favours to the public perception of local authorities, sending out the message that councils are inefficient and could be doing more for less, that you can have services without paying for them, that council tax rises are optional rather than normal. The impact of all that may last much longer than the current freeze.

It also casts local authorities as being rather like a government department that just daes whit its telt, rather than each being independently answerable to the people who elected it.

And if, as now, councils want to raise council tax, you get a good cop, bad cop scenario – nice SNP government who want to freeze my council tax, nasty council that wants to put it up – which does damages the public’s view of local government and hinders understanding of the reality of budgets.

However, local authorities, via COSLA, did agree to the council tax freeze, and they have had a number of years in which to plan for forthcoming budget cuts. Some have managed this better than others.

Meanwhile, the cumulative effect of not raising it grows year on year. It will be very difficult to recover the lost council tax base. You can’t raise council tax by 10 per cent in one go to make up for a decade of not raising it by one per cent per year. People won’t remember the nine years you didn’t raise it, they’ll just remember the one massive hike after them getting used to it staying the same. And double-digit increases are big news, as we know.

For all but the poorest, a small rise could be incorporated into household finances. In a band-A property, a one-per cent rise would be less than a pound a month. And while such a small increase wouldn’t really help with the funding shortage, it would at least maintain the principle of a gradual increase in the council tax. It’s not such a good vote winner as a total freeze, though.

When central budgets are cut and raising council tax is out of the question, raising more money through direct charges for services is about the only option left. And while council tax is not completely progressive, it’s not as regressive as a direct charge for services or no service at all, which can hit the most vulnerable.

And if there was such concern about the regressive nature of council tax, why have the SNP waited until a potential third term in office to reform local taxation?

Undoubtedly, there are plenty areas of local government where reform is needed. Efficiencies can and should be made. But there needs to be a wholesale look at the structure of local government, not just taxation. You don't get reform just by making cuts. Quite the opposite in many cases.

Full-time wages for councillors, I’d suggest, would raise the status, professionalism and diversity in the role, and is one possibility that should be looked at.

Localism and community empowerment are high on the government’s agenda, and it makes no sense to pursue those without healthy, thriving local government. Raising not just the funding for, but also the status of, local authorities needs to be a priority.