John Swinney wants council tax to be frozen till 2012

THE battle lines for the next Scottish elections were laid last night as the SNP confirmed it would continue to freeze council tax next year, despite claims from Labour that the move could starve schools and local services of much-needed funds.

• John Swinney aims to freeze council tax for a fourth year. Picture: PA

Finance secretary John Swinney revealed he would aim to freeze the tax for a fourth year in succession in order to give "welcome relief" to families across the country.

It will be implemented in April next year, just five weeks before the Holyrood election, allowing the SNP government to highlight a record of having kept a lid on the tax in each of its four years in office.

But the move was facing a growing backlash last night from the SNP's main opponents, who warned the measure, first introduced prior to the recession, could not be justified at a time of public sector cuts.

The tax freeze costs the Scottish Government 70 million a year to implement – and Labour claims that money should instead be going into shoring up services, at a time when councils are already having to make severe cutbacks.

Labour claimed the freeze was now helping only "rich" families in big houses, at the expense of those who relied on council services. That claim was described as "nonsense" by the SNP, which said it was low-income families who benefited the most.

It sets the scene for a major election divide, as politicians in Scotland turn their sights away from the Westminster election and on to the Holyrood vote in May 2011.

The extension of the freeze, introduced in the first year of the SNP administration, was unveiled by Mr Swinney during a debate on local government finance at the Scottish Parliament.

He told MSPs: "The council tax freeze is, of course, now in its third year. It has provided welcome relief to hard-pressed households across Scotland, and we certainly intend to continue to provide relief on this basis in 2011-12."

The finance secretary claimed that, far from starving local authorities of cash, the SNP government had increased the share of cash councils get in every year of its spell in office. "The share now going to local government has risen year to year, from 33.4 per cent in 2007-8 to 34.1 per cent in 2010-11," he said.

However, some local authorities have warned they are having to cut spending, and some council leaders say the money being used to freeze the tax should instead be supporting services. One described the freeze as "untenable" in the circumstances.

A survey by the union Unison claimed Scotland's 32 councils were starting the 2010 financial year with an automatic 300m cut in funding, mostly as a result of a slump in the sums they earned in fees and charges.

The big losers so far have been the two biggest departments, social care and education, with cuts in the number of classroom assistants one of the main consequences.

Labour now looks set to come out in opposition to the 2011 tax freeze. Michael MacMahon, its local government spokesman, said the party wanted to analyse the SNP government's spending plans in detail.

He went on: "The only people who are benefiting from this freeze are the wealthy. What we are saying to Mr Swinney is, 'What are you going to do for poorer families who are having services taken away from them?' You might have been able to get away with the freeze when there was money to spend, but now we are talking about a totally different issue."

Critics argue local authorities require both the extra 70m the freeze costs and the ability to raise the council tax.

Meanwhile, Labour and the unions claim the jobs of as many as 3,000 local government workers are under threat because of current budget cutbacks.

Mr MacMahon said: "The SNP may insist that the council tax freeze is fully funded, but even if that were true, which I contest, they are not adequately funding all the additional responsibilities they have passed on to local government, or taking into account the additional pressures and demands created by the recession."

Labour back-benchers were more forthcoming, describing the freeze as a "very bad idea".

However, council sources said local authorities were unlikely to oppose another freeze, as long as the government adequately compensated them with extra funding. "The reality is that, so long as they are offering to pay for it, no council is going to turn that down," one insider said.

A source close to First Minister Alex Salmond said last night: "It is particularly during a period of recession and difficulty for families that the council tax freeze is of the greatest benefit.

"Relative to income, it benefits those on the lowest incomes the most, so we would reject Mr MacMahon's claims."

He added: "The help this gives helps to boost local economies by putting more money in people's pockets."