STUC releases proposals for local authority funding

An immediate end to the council tax freeze, reform of the Small Business Bonus Scheme, as well as speedy implementation of local tax reform and a relaxation of the borrowing rules for local authorities, are among the key local government funding proposals put forward by the STUC.

The Scottish trade union umbrella body released details of its proposals, directed at both the Scottish Government and the opposition parties, today, ahead of a debate on the Scottish Government’s draft budget.

Local government should retain its percentage share of the overall Scottish budget, the STUC says, which would mean 1.7 per cent more for local authorities in 2016-2017.

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It recommends an immediate end to both the council tax freeze and the conditionality attached to the current local government settlement, coupled with undertaking from Scottish local authorities to increase council tax by at least three per cent once the conditionality is removed.

Business rates should be returned to local authority control, the Small Business Bonus Scheme reformed or abolished, and local authorities given a debt amnesty and a commitment to push ahead with proposals to relax the rules for Scottish councils borrowing, lending and the repaying loans, it adds.

The STUC also challenges councils to implement the Scottish Government’s proposals on maintaining pupil/teacher ratios, to ensure the Living Wage is paid to all care workers and to review direct charges for services and undertake to reduce or eliminate them where they are fiscally regressive.

STUC General Secretary Grahame Smith said: “The Scottish Government has been placed in a very difficult position as a result of the UK Government’s continuing austerity agenda.  This year’s settlement was even worse than most were predicting. 

“However, this cannot obscure the fact that the settlement for local government is particularly bad and councils are effectively being denied to opportunity to raise their own revenue to protect services and jobs.

“The insistence on the council tax freeze and the ill-targeted and ineffective small business bonus scheme is at a cost of approaching £200 million per year. 

“If the Scottish Government insists on continuing these policies, other means of raising income will have to be found.”

Meanwhile the GMB has welcomed Scottish Labour’s proposal to add a penny onto income tax, saying it could mitigate the effect of cuts in Scottish councils.

“The additional 1p on income tax with the rebate for the lower paid goes some way to reverse the erosion of the tax base in Scotland where the eight year freeze in council tax has led to a loss of £450m per year which councils would have had if council tax had kept pace with inflation,” said GMB Scotland secretary Gary Smith.