The Labour party in Scotland have urged an increase in council taxes in order to protect public services as spending cuts loom as a result of the hole in the UK’s finances.
Yesterday it urged the Scottish government to end the council tax freeze and allow local authorities to generate funding through a locally-set tax if necessary.
Scotland’s budget is expected to fall by 25% over the next four years as the impact of the financial deficit left behind by the last UK Labour government hits departments. The cuts to the Scottish government’s budget will be announced this month. An independent budget review group has warned that up to 50,000 jobs in the public sector could be axed to meet the spending cuts.
Labour has said that Scotland’s 32 local authorities must be given the “flexibility” to increase council tax in order to raise cash to make up the shortfall and protect vital public services. The party also urged the Scottish government to continue with the £70 million of extra funding given to local authorities in order to pay for the council tax freeze.
Labour said that councils who wished to increase the tax would not be allowed to “set the rate willy-nilly to what they want”. However it is as yet unclear what limits will be set and what mechanisms will be put in place to ensure that increases are not excessive.
Council tax has been criticised for penalising those on low incomes who pay a disproportionate amount. The SNP plan to replace it with a fairer system based on income received no backing from Labour, Tories and the Lib Dems and the plan was dropped.
Labour local government spokesman Michael McMahon said: “The SNP have pushed councils to the brink. The council tax freeze has never been properly funded.
“The SNP now need to remove the gun from councillors’ heads and give them the freedom to protect vital local services.”
Official figures show that the proportion of the Scottish budget that currently goes towards local authority funding is higher than when the SNP came to office. The council tax freeze is estimated to have saved council tax payers an average of £300 per year.
The Scottish public are sure to react with anger at the suggestion that they should foot the bill for the financial deficit caused in part by Gordon Brown’s mishandling of the economy and Labour’s failure to regulate the banks. Public cash has been used in order to prop up private institutions and the practice of paying large bonuses to some employees continues.
A Scottish Government spokesman said: “We want the council tax freeze to continue next year. We will be in a position to consider the position fully and publish a draft Budget after the UK Government publishes its Comprehensive Spending Review later this month.”