Scottish Budget: Union leaders urge Scottish Government to overhaul or replace council tax amid freeze anger

GMB Scotland has made a submission to a key Scottish Parliament committee on the impact of the Budget and the need to reform council tax

Union leaders have urged the Scottish Government to overhaul the council tax system to save frontline services, as a Holyrood committee meets today to take evidence on the impact of the Scottish Budget.

GMB Scotland organiser in public services Keir Greenaway is due to give evidence to the Scottish Parliament’s finance and public administration committee today.

In a submission to the committee ahead of the evidence session, the union has called for urgent intervention, and echoed concerns from local authorities warning a council tax freeze risks lifeline services.

Humza Yousaf's decision to freeze council tax next year significantly increased the size of the Scottish Government's financial black hole. Picture: Jeff J Mitchell/Getty Images

It comes after First Minister Humza Yousaf first announced in October that council tax would be frozen at existing levels until April 2025.

Finance secretary Shona Robison confirmed in last month’s Budget that councils would receive £144 million in compensation for freezing council tax – the equivalent of a 5 per cent rise per local authority.

However, council umbrella body Cosla had previously warned £300m would be needed for the council tax freeze to be classed as fully-funded, describing the Budget outcome as a “major blow” to communities up and down the country.

GMB Scotland said in its committee submission the tax paid by owners of more expensive properties had failed to rise in line with soaring property prices over the past three decades. The union said the system must either be reformed or replaced.

“This has been long overdue, and a perpetual freeze to council tax will only exacerbate the inequalities baked into the current tax system and undermine public services,” the submission said.

The union claimed Ms Robison’s insistence on the reform of public services was code for cuts to jobs and risked the future privatisation of everyday services.

But a Scottish Government spokesperson said: “We are committed to developing fairer, more inclusive and fiscally sustainable forms of local taxation.

“We have convened a joint working group with Cosla on sources of local government funding, which is exploring a range of potential measures, including approaches to longer-term reform of council tax.

"Ministers have also delivered secondary legislation to enable councils to apply for up to a 100 per cent premium on council tax rates for second homes from 1 April 2024.

“Consultation is an essential and important aspect of public engagement, and the Scottish Government remains committed to consulting on all legislative proposals.”