New Research Shows Council Tax Freeze “Over-Funded” by SNP- Labour’s Bogus Claims on Local Tax Exposed

The SNP has today highlighted new expert research showing the Scottish Government has fully funded the Council Tax freeze – and called on Labour to apologise for years of ‘grossly misleading’ claims on the subject.

The new analysis from the Scottish Parliament Information Centre (SPICe) shows that “the money provided by the Government to freeze the council tax has resulted in local authorities receiving more income than they would have done by increasing rates by RPI%” and goes on to say that the funding given to local government was such that “it could be said that the freeze, over the period 2008-09 to 2013-14 was ‘over-funded’”.

SPICe’s research stands in stark contrast to years of claims from the Labour party that the freeze has been underfunded – claims repeated by Labour’s finance spokesperson Jackie Baillie and Deputy Leader Alex Rowley this year.

Commenting, SNP MSP Stuart McMillan said:

“This new independent, expert research shows that the Council Tax freeze has been more than fully funded by the SNP Government.

“And it has completely demolished years of bogus claims from Labour – the fact is that the Scottish Government has fully funded the freeze, supporting council budgets while boosting family incomes.

“That key Labour figures have spent eight years condemning a freeze which benefits poorest people the most, while spreading completely inaccurate claims is testament to a party which has completely lost its way – and is more interested in negative politicking than in putting forward any serious vision for Scotland.

“The public sector in Scotland has faced tough challenges in recent years with Tory cuts passed down from Westminster – but the Scottish Government has did everything we can to support front-line services, and it’s right that we pay tribute to the council staff who work so hard to provide these services.

“With independent experts completely rubbishing Labour’s position on the Council Tax, it’s time for Kezia Dugdale and Labour to apologise for eight years of these grossly misleading claims – and to take the opportunity to completely rethink their negative brand of politics.”

ENDS

Notes to editors

The report from SPICe states that

“Since the council tax freeze was introduced in 2008-09, there has been much debate over whether it is “under-funded” – i.e. whether the additional £70m paid to local authorities each year is enough to cover what could have been raised had local authorities had control over rates. Of course, there is no way of knowing by how much each local authority would have raised council tax. But estimates can be produced based on the information available, and assuming that council tax rates would have risen in line with inflation.”

“Figure 7 below shows that, in fact, the money provided by the Government to freeze the council tax has resulted in local authorities receiving more income than they would have done by increasing rates by RPI%.”

“Therefore, on the basis that the freeze was intended to compensate for a foregone per annum increase in Council Tax it could be said that the freeze, over the period 2008-09 to 2013-14 was “over-funded”. In total, over the six years, this has resulted in an estimated £164.9m extra going to local government as a result of the freeze.”

“The council tax freeze has been underfunded by the Scottish Government…” (Jackie Baillie, 22/1/15)

https://www.holyrood.com/articles/feature/how-should-local-government-scotland-be-financed

“…the SNP’s underfunded council tax freeze has broken local government finance.” (Sarah Boyack, Press Release, 31/10/2013)
http://www.scottishlabour.org.uk/press/entry/new-report-shows-pressure-councils-are-under-to-fund-services1#sthash.ostg7qoF.dpuf
“the on-going council tax freeze remains underfunded putting even greater pressure on frontline council services.” (Alex Rowley, 11/02/2015)
http://www.alexrowley.org/budget-debate-and-the-local-government-finance-settlement/

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