During the election campaign the SNP pledged (a) to replace council tax with Local Income Tax (which I support); and (b) to freeze council tax in the interim.
The local income tax issue is foundering in some respects – collection is to be based around PAYE and issues of the potential treatment of investment and savings income (which funnily enough forms a large source of income for various people) is not clear (as highlighted by Stewart Stevenson MSP during the debate in the last Parliament on Tommy Sheridan’s proposed income based service tax). There is no majority in favour of LIT within the Parliament, and while Lib Dems support the policy it is not clear if the LIT envisaged by the SNP is the same as that envisaged by the Lib Dems.
The second strand of the policy is also being affected. Yesterday’s Scotsman suggested that the policy is under threat. Today’s Scotland on Sunday says the opposite. Apparently today (presumably in response to yesterday’s story) the SNP is confident of a deal. The deal will be funded with a big pot of money that local authorities could dip into to meet the shortfall on local government services that will arise from the freeze. However, any deal will be voluntary.
The Executive/Government has no statutory power to freeze council tax, and one could argue that interfering with the power of democratically elected councillors to regulate the level of taxation appropriate within a local government area is anti-democratic (particulalry when the governing party won a minority of seats and votes). Further, how much of the big pot of money will there be given the financial settlement awarded to the Scottish Executive in the most recent comprehensive spending review and pre-Budget Report?
There is another difficulty. The SNP have themselves exacerbated the problem. Various matters of national policy are being buck-passed back to local authorities to provide and finance. For example, the Health Minister Nicola Sturgeon announced the reversal of the proposed closures of A & E units – intended to cost cut in health care by focusing resources at specialist A and E units and allowing health resources for other matters to be reallocated from the cut of an A & A unit. Unfortunately she did not explain where the money is to come from to fund this policy reversal. It is for the local health authority to fund the change. If they are to upgrade the other health provision that had been promised the health authority can no longer rely on the cuts that would result elsewhere within the service from the cutting of some A & E services.
In order to get any voluntary agreement between national and local government there has to be a pay off – and one suspects the money isn’t there. And if the money is found what will be cut to pay for it?
PS during the debates on the tram project in Edinburgh the SNP initially argued that the tram project was appreciabley over-budget and accordingly should be cut. Parliament voted ot continue the project and the tram goes ahead £50 million under the allotted budget. Will the furtherance of this policy (supported by all other parties) be blamed for the lack of available funds for local authorities? Or will Alistair Darling get the blame? One things for sure, Wee Eck’s sloping shoulders will try to pass the buck elsewhere.