Dave Thompson MSP

Council Tax freeze more than fully funded by SNP in government

SNP MSP for Skye, Lochaber and Badenoch,  Dave Thompson has today written to Labour’s David Stewart and Rhoda Grant calling on them to withdraw their party’s “inaccurate and misleading” claims that the Council Tax freeze has been ‘underfunded’ – in light of new, independent research showing that the opposite is true.

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 made by Labour’s finance spokesperson Jackie Baillie and Deputy Leader Alex Rowley this year.

The fully-funded Scottish Government Council Tax freeze has saved the average Band D household in the Highlands a total of £1,207 since its introduction.

Commenting, Mr Thompson said: “People across my constituency of Skye, Lochaber and Badenoch and across the Highlands in general have benefited from the Council Tax freeze – and this new independent, expert research shows that the freeze has been more than fully funded by the SNP in 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.

“Highland Council 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 in the Highlands

“With independent experts completely rubbishing Labour’s position on the Council Tax, it’s time for David Stewart and Rhoda Grant to apologise to local people for eight years of Labour’s grossly misleading claims – and to take the opportunity to completely rethink their entirely negative brand of politics.

Note:

A wording of the letter is as follows:

David Stewart MSP & Rhoda Grant MSP

3 Gordon Terrace

Inverness

IV2 3HD

23 September 2015

Dear David and Rhoda

Council Tax

I am writing to you with regard to the recent report published by the Scottish Parliament Information Centre (SPICe) regarding the Scottish Government’s Council Tax freeze.

The report – published by independent, impartial experts at SPICe – finds that the council tax freeze has been ‘overfunded’ with “an estimated £164.9m extra going to local government as a result of the freeze.

As you’ll be aware, this stands in stark contrast to claims made by senior Labour party figures over the last eight years – with your party’s new Deputy Leader Alex Rowley said in February this year that “the on-going council tax freeze remains underfunded putting even greater pressure on frontline council services” and Labour’s finance spokesperson Jackie Baillie said that “the council tax freeze has been underfunded by the Scottish Government…”.

In light of the new evidence from SPICe, I would be grateful if you would publicly retract your party’s previous inaccurate, misleading claims on the subject and reflect on the negative brand of politics pursued by your party.

You will also of course be aware that the Scottish Government’s council tax freeze policy has saved the average Band D household in the Highlands a total of £1,207.  I hope that in light of this new SPICe report, you will be happy to welcome this substantial saving to family budgets during tough economic times.

I look forward to your swift response.

Yours for Scotland

Dave Thompson

MSP for Skye, Lochaber and Badenoch (SNP)

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/

Figures on the average saving for Band D properties can be found here: http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx?SearchType=Advance&ReferenceNumbers=S4W-26610&ResultsPerPage=10