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Friday, 11 October 2013

Indefensible Council Tax

I am assuming that people may be a bit maxed out by the number of posts I have been doing on the new waste and street cleaning contract.  It is just that, having pursued the issues for so long, it is good to see the final stages comping up.

Instead of blogging on it today, I thought I would look at a story on Council finance north of the border.  Thus, I leap from one source of glamour and excitement to another.  COSPA, which is the Scottish equivalent of CIPFA (i.e. the main public finance association).  They point out that the Holyrood policy (which Holyrood shares with Eric Pickles) of freezing Council Tax for a small government grant is unsustainable.  It gradually erodes the proportion of income that the Council itself controls.  Incidentally undermining the localism rhetoric that Eric Pickles has used to cut central government grants in general. 

I am not sure of the figures, but it sounds as if the Scottish figures, of only 14% of Council income coming from Council Tax, is even lower than in England.

It is tempting to try to change this by going back to the past and giving greater freedom over Council Tax levels to local authorities.  Aside from the problem of this quite likely leading to massive "catch up" rises, the Council Tax taxbase has not been revalued since the early 1990s.  Hence, the valuation bands have less and less connection to the reality on the ground. 

I was recently reading The Poor Had No Lawyers by Andy Wightman, which is about Scottish land reform.  Believe it or not, it is really quite interesting.  His suggestion is introducing a Land Value Tax that taxed land, rather than the buildings on top of it.  The political challenges to making that happen would be huge, but something as radical as that is probably needed.

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