Warning council tax rates freeze not sustainable

THE freeze on council tax rates in Scotland is not sustainable, the president of the body that represents local authorities has said, as he warned that new forms of taxation may have to be looked at to plug growing gaps.

David O'Neill said Scotland would never be the same again. Picture: David Moir

Cosla president David O’Neill said the amount of their budgets councils raise themselves has fallen dramatically since 2007, as he launched a new commission to look at reforming government in Scotland.

Mr O’Neill indicated changes to the way councils are funded are on the way and raised the possibility of an “additional” system. “It could be a new system, it could be an additional system, it could be a variation on the council tax,” he suggested without elaborating.

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The commission will examine the role of local government in Scotland ahead of the independence referendum. Mr O’Neill, a Labour councillor, said there needed to be “a discussion about how public services are financed”.

He warned the “centralising” Scottish Government against future power grabs and called for the role of councils to be enshrined in law. The council tax will be among the areas examined by the Commission on Strengthening Local

Democracy as it looks into the wider financing of public services.

“The council tax freeze has been in place since 2007 and that is going to go on until the end of this parliament which will be 2017,” said Mr O’Neill.

“During that time, local government’s ability to raise its own finances has been reduced from only 20 per cent down to 14-ish per cent. [With Holyrood making up the rest.] Is that a sustainable future? No, it’s not a sustainable future. There needs to be a discussion about how public services are financed.”

The SNP is adamant its flagship policy of the freezing of council tax rates is essential to support hard-pressed families who face crippling rises in the cost of living.

But anti-poverty groups such as the Joseph Rowntree Foundation have warned that better-off, middle-class families are the biggest beneficiaries of the freeze and Labour already has a commission looking into its long-term sustainability, along with other universal services.

The increasing “centralisation” of services is at the heart of councils’ concerns which have prompted the Cosla commission to be launched.

Issues include the merger of the eight regional police forces – which had been overseen by council joint boards – into a single force, but stretches back to further education colleges being taken out of council hands in the 80s. Powers on public health and economic development have been also been moved to national agencies in recent years.

Mr O’Neill said: “Over the decades, we have moved away from the local aspect of almost everything. More and more services are being run by distant bureaucracies and often those services are being done to people rather then delivered with them.”

This contrasts with the situation across Europe where services work better for local communities, it is claimed.

Any new powers handed to Holyrood after a No vote, through further devolution, must filter through to local councils and into to “the heart of communities”, Mr O’Neill added.

The commission is the first of its kind. It comes after Orkney, Shetland and the Western Isles seized on the current constitutional debate to form the “Our Islands Our Future” campaign to demand greater freedom in decision-making from Edinburgh.

“This is something different and it has never been done before,” Mr O’Neill said.

“We are blatantly taking advantage of the fact that the referendum is taking place. Irrespective of the outcome, Scotland will never be the same again and that’s why we’re setting up the commission at this time.”

He said the independence debate has so far failed to “spark the imagination” of Scots because it has not dealt with local services like schools, nurseries and social work which are provided by councils.

The commission will examine the map of 32 local authorities and whether this should be expanded or even cut, although the latter seems unlikely.

And the place of local government should be enshrined in law, Mr O’Neill said. Neither the UK nor Scotland has signed up to the EU charter on the Right to Local Self-Government and Cosla is pressing for this to be included in legislation going through Holyrood. Mr O’Neill added: “We will continue to press for that – local government should be recognised by statute.”

A range of council, charity and union leaders will sit on the body which has been established amid growing frustration over a shift in power away from local communities to Edinburgh in recent decades.

The commission is aiming to present some initial findings to the Cosla conference in March, with its final findings being published before the referendum in September to set out its position on the constitutional debate.

The Scottish’s Government’s local government minister, Derek Mackay, last night said the commission will provide an “excellent counterpart” to the body set up to look into the demands from Our Islands Our Future

He said the referendum present a “wider opportunity to explore how local democracy can be improved”.

Mr Mackay added: “Local democracy has been strengthened by this government’s actions since 2007, such as favourable funding settlements for local government, increased local autonomy from the removal of ringfencing and strengthened community planning, and will be enhanced further by the forthcoming community empowerment and renewal bill and wider reforms to improve local outcomes.

“We will follow the commission’s work closely, as part of the wider debates, and look forward to continued close work with Cosla as part of our valuable partnership approach with local government and others.”