Aberdeen accuses Holyrood of “great SNP tax swindle”

Grant Thornton said the oil and gas downturn in Aberdeen had 'far-reaching consequences' for the wider Scottish economy. Picture: Ian Rutherford
Grant Thornton said the oil and gas downturn in Aberdeen had 'far-reaching consequences' for the wider Scottish economy. Picture: Ian Rutherford
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ABERDEEN city leaders have condemned a “great SNP tax swindle” after it emerged the council receives the lowest funding settlement in the country despite workers paying on average £3,000 more a year in income tax.

Aberdeen contributed a total of £933m to HM Treasury - and average of £7,585 per person - through income tax payments of 123,000 workers in 2013/2014, Finance convener Willie Young said last night.

Marischal College, the headquarters of Aberdeen City Council

Marischal College, the headquarters of Aberdeen City Council

This compares to the national average of £4,517 for the year, he added.

Meanwhile, separate figures show that Aberdeen received the lowest funding settlement of all 32 councils from Holyrood to finance public services - around £1,455 per head.

Mr Young, a Labour member of the ruling Aberdeen administration, has called for a complete overhaul of the way the Scottish Government funds local authorities ahead of plans to devolve a share of income tax to funding for councils.

The Scottish Government said it treated local authorities “very fairly” and had a “strong record” of investment in Aberdeen and the North East with several large infrastructure projects ongoing.

Aberdeen is the lowest funded local authority in Scotland yet people who live here pay almost 40 per cent more in income tax than the Scottish average.

Councillor Willie Young, finance convener of Aberdeen City Council

A spokesman added the council received an extra £14 million over and above its core funding this year.

However, Mr Young claimed the city had been “taken for a ride” with its low settlement for public services given the money raised through local workers.

He said: “Aberdeen is the lowest funded local authority in Scotland yet these figures show that the people who live and work here pay almost 40 per cent more in income tax than the Scottish average.

“What kind of message does that send to the people of Aberdeen? It seems we are being punished for contributing the largest amount to the UK and Scottish treasuries.

Aberdeen City Council is one of four breakaway councils to set up the Scottish Local Government Partnership after leaving COSLA 18 months ago in order to campaign for better settlements for local authorities and Council Tax reform.

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Mr Young released figures on income tax payments per local authority following the most recent meeting of the SLGP last week.

In Glasgow, workers paid an average of £3,650 of income tax over 2013/2014- or £876 million from 240,000 taxpayers.the figures show.

Taxpayers in Renfrewshire and South Lanarkshire paid an average of £3,719 and £3,994 respectively.

The total amount paid by Scotland’s 2.59 million taxpayers in 2013/14 was £11.7 billion, Mr Young said.

He added: “The cat is out of the bag and Aberdeen is being taken for a ride in what is clearly the great SNP tax swindle. We need a complete rethink of the way local authorities are funded and I would call on the First Minister to meet with SLGP as a matter of urgency to discuss these issues.”

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Councillor Young added: “I think people will be stunned when they see these figures in black and white. More than 600,000 taxpayers contributing almost £3 billion to public coffers yet the Scottish Government will not even meet with us to discuss the huge political issues which affect those in our areas.

“It’s an outrageous and diabolical betrayal of every man, woman and child who lives in the areas we represent.

“Although we have yet to see the final details of what the First Minster plans to do with local government funding, the new proposal suggests that the share of income tax receipts will still be distributed in accordance with a needs-based formula rather than what is actually raised locally.”

The Scottish Government provides a block grant to local authorities which covers around 85 per cent of their total spending budget with the remainder funded largely through council tax.

Money is distributed to councils using the Grant Aided Expenditure model, agreed with COSLA, which builds in factors such as population, pupil numbers, or deprivation into the final figure.

A Scottish Government spokesperson said: “The Scottish Government has a strong record of investment in Aberdeen and the North East of Scotland.

“Earlier this year we announced a £254 million infrastructure package for the North East on top of our commitment to provide 50:50 funding for the Aberdeen City Deal.

“This builds on the £170 million we are already investing in the railway (Aberdeen to Inverness); £37 million for Inverurie Academy and £745 million for the Aberdeen Western Peripheral Route.

“Despite on-going cuts to our budget, the Scottish Government has always treated local government very fairly. The funding package for 2016-17 - amounting to over £10.3 billion - was accepted by all 32 councils, and will be strengthened by our joint working to improve outcomes for local people through health and social care integration and by improving educational attainment.

“As part of the 2016-17 funding settlement for local government we provided Aberdeen City with an extra £14 million over and above its core funding which is allocated using a needs-based formula. As we have said previously, we will discuss the overall financial settlement with COSLA and we will formally seek to consult local authorities on devolving a share of income tax to councils in due course.”

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