More than once I’ve offered the opinion on Twitter that a council tax freeze funded by central government is, on balance, a bad thing. This usually brings a ritual denunciation from supporters of the SNP government, which has funded such a freeze for seven years in a row. People believe, not unreasonably on the basis of my track record, that I am making a political point.
I usually am. However, some deeper concerns lie behind the day-to-day politics of the subject. To separate what you might call the technical and political points I have, unusually, split my comments between two of my blogs.
On my other HelpGov blog you will find a post on The unintended consequences of a council tax freeze. That highlights two concerns that I then use here to make my more political, and mainly Scottish points. If you don’t believe my two concerns you may wish to check what I’ve written on the HelpGov blog.
My first concern is that a council tax freeze diminishes local democracy and the scope for independent action by local councils. This is because, as I demonstrate, over time it means a greater and greater proportion of their funding is provided by central government rather than raised directly by taxes from the population that elects councillors.
In my other post the closest I got to the politics of this was to note that, in the words of the old saying, ‘he who pays the piper calls the tune.’
A partial rebuttal from the Scottish government of this point would doubtless stress that the annual freeze is preceded by negotiations between themselves and the Convention of Scottish Local Authorities which starts with a government offer along the lines of ‘We’ll give you extra money next year so you can freeze the council tax if you do … ’ As John Swinney, Scottish Government Finance Secretary, put it in February 2014
This is the seventh successive year that we have fully funded a council tax freeze, which is good news for communities and households who will benefit from the savings this brings in a challenging economic climate.
Local authorities might dispute ‘fully funded’ but that’s another story. And of course a council tax freeze is not ‘free money’ for communities and households. We are all paying for it indirectly through the other taxes we pay.
As an example of how this pans out, here is what councils agreed to in 2014/15 in exchange for this extra funding (taken from the February 2014 reference above)
- maintain teacher numbers in line with pupil numbers
- secure places for all probationary teachers under the teacher induction scheme
- funding for those affected by the ‘Bedroom Tax’
- council tax benefit reforms
- free school meals
- childcare expansion
and what they’ve agreed for 2015/16
- all children in P1 to P3 to have access to a free school meal
- extended pre-school entitlement
- funding for a Scottish Welfare Fund
- mitigation of the impact of the Bedroom Tax
- administration costs for the Council Tax Reduction scheme
- more capital funding to support the extended pre-school entitlement.
The words are the government’s. The purpose of this post is not to examine any of the individual items or to criticise them (some have already done so, for example on the grounds that free school meals for all young children provide unnecessary subsidy to well-off parents). My point is that these are the government’s priorities. Who is to say that a council might not have identified other priorities their electorate would prefer them to spend their money on but now cannot?
Ironically, while the SNP want more (all) control of public affairs to flow down from the UK to them, they are busy hoovering up democratic control from the local level. Apart from the additional control over councils represented by the council tax freeze they have of course removed responsibility for police and fire & rescue services from local authorities and made them national services.
The second concern I describe in my other blog can be dealt with more promptly. It is that a council tax freeze benefits wealthier people more than the poor. So, if a freeze were to continue for the next seven years where I live, in Aberdeen, someone living in the highest banded property would be £1692 better off, in the lowest band £543. Taken over the period, neither sum is vast. But it’s hardly the progressive redistribution of wealth the SNP only seem to have woken up to during the referendum campaign when they realised their growth in support was coming from poorer urban areas rather than their traditional rural and conservative heartlands.
The last time I was challenged on this subject it was in these terms (I’ve de-twitterised the language)
Local authorities have never been more accountable/responsible than they are now so does it matter where their money comes from?
I live in hope that these two lengthy posts will persuade my questioner that the answer is ‘Yes.’