SNP ministers could have hired an extra 550 police officers and 220 firefighters if they hadn’t forfeited a tax rebate by merging the police and fire services, Scottish Labour have claimed.
The party cited a new analysis showing Police Scotland and the Scottish Fire and Rescue Service had been unable to reclaim £140m in VAT in the four years since their creation.
The inability to reclaim VAT has been a long-standing SNP complaint against the Treasury, but Labour said ministers were warned well in advance it would happen.
Before merger, the eight regional police and fire services were able to reclaim VAT because they were funded via local government, but are now centrally funded and cannot.
Labour said the lowest annual tax bill the emergency services had to pay since 2013 was £23m for Police Scotland and £9m for Scottish Fire and Rescue, enough to pay for the hiring and training of an additional 547 police officers and 223 firefighters.
Like the SNP, Labour is now demanding the UK Treasury grant the services a VAT exemption and a full refund as part of next month’s UK budget.
Shadow Scottish Secretary Lesley Laird said: “That Scotland’s police and fire services are having to pay VAT is a mess of the SNP’s own making.
“They were repeatedly warned that their rush to centralisation would lead to our emergency services having to take millions out of their budget to be spent on VAT, yet despite this advice they did not listen and pressed on regardless.
“Now, we see the true cost of this shambles. This tax on our emergency services could have paid for more than 500 extra police officers and more than 200 additional fire fighters.
“We will be calling on Philip Hammond to apply a VAT exemption to the Scottish police and fire services in his forthcoming budget and for him to refund the £140m spent since the exemption was lost, putting our services back on a sound financial footing and able to get on with their job.”
SNP MSP Ben Macpherson, who is holding a debate on the issue at Holyrood today calling for a refund, said withholding the money was “illogical and totally unjust”.
He said: “It is genuinely good to see some in Labour finally supporting our long-standing calls for Police and Fire VAT to be refunded - yet at present only one of their MSPs has signed my motion on this issue.
"Given these comments by Lesley Laird, I hope the Scottish Labour benches will get behind me in demanding that the Tories end this unjust VAT grab on Scotland’s police and fire services.
“The UK Tory government must finally do the right thing - end this cash grab on our frontline services and end it now.”
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