WHEN the SNP first took control of Holyrood in 2007 it did so on a promise that it would abolish council tax and replace it with what it believed was a more progressive local income tax. By adding 3p in the pound on to income tax rates the policy would, the party’s 2007 manifesto said, replace an “unfair” system with one based upon people’s ability to pay. By pledging to lift 85,000 people out of poverty while saving the average Scottish household between £350 and £535 a year, Alex Salmond’s government appeared to be onto a clear winner.

Yet here we are more than a decade later and that unfair system is still in place, councils are increasing rates but slashing services and, according to Citizens Advice, Scottish households are now collectively almost £7 million in council-tax arrears, with the average debt of £3,102 sitting almost three times higher than the average bill of £1,147. Where did it all go wrong?

Almost from the off, Mr Salmond’s minority government was forced to abandon its pledge after facing overwhelming opposition from the councils that would have had to administer the new tax as well as influential bodies including the Confederation of British Industry and the Federation of Small Businesses. Their arguments were well-worn ones: increasing income taxes would make Scotland the most highly taxed part of the United Kingdom, that would put businesses off coming here and that in turn would damage the Scottish economy.

The clincher, though, was the Treasury’s threat to stop sending an annual council-tax benefit worth £400m north of the Border, a move Mr Salmond decried at the time as being tantamount to embezzlement. His Finance Secretary John Swinney was more circumspect, noting that “it would not be wise, and indeed would not be possible” to introduce the new regime “in the face of such swingeing Westminster-imposed cuts”.

Some changes did follow. The Scottish Government froze council tax between 2008/09 and 2016/17 and, when that freeze was lifted, introduced some tweaks designed to “make the funding of local services fairer in a way that’s reasonable, measured and balanced”. That saw larger increases applied for those living in the highest-value properties as well as enhanced support and exemptions for all low-income households and people with disabilities.

Yet despite this, Citizens Advice Scotland says the number-one debt issue its bureaux now deal with is council-tax arrears, with part of the problem being that people simply do not know about the reductions they are entitled to. “We know that over 80,000 fewer people in Scotland are claiming council tax reduction than when the system was introduced seven years ago, and we fear that lots of families are missing out on savings they are entitled to,” the organisation’s financial health spokesman Myles Fitt said.

Citizens Advice has launched a campaign to ensure those who are entitled to exemptions know about them and claim them. But even if it reaches every person it ought to, the campaign cannot hope to address the much wider problem, that in its current form council tax continues to penalise the poor.

It is all very well for the Government to say it has lifted those on the very lowest incomes out of having to pay council tax, but quite aside from the fact that the formula it uses to identify those people is mind-bogglingly complex there are still very many on low or low-ish incomes who do have to pay. The problem they face is that council tax remains tied to 1991 property values, which in affluent areas have soared but in less well-off areas have stagnated. The upshot of that is that on a proportional basis the least well-off are paying more into the pot than the wealthiest – hardly the mark of a reasonable, measured and balanced policy.

As if that wasn’t bad enough, now, four years after the freeze was lifted, local authorities are not only in the process of signing off on their fourth round of council-tax hikes, they are continuing to cut the services those taxes pay for too. So while most households are seeing their annual bills rise by as much as 4.79 per cent – the maximum allowed under Scottish Government rules – towns and cities in every part of the country have less to show for it.

From additional support needs and music lessons to school meals and social care, budgets are being slashed to the bone as councils accuse the Scottish Government of failing to provide them with enough funding while the Government continues to demand they foot the bill for its spending promises. And yet as each year brings ever-more outlandish proposals – shut down Glasgow’s Gallery of Modern Art, operate Edinburgh’s libraries without staff – councillors continue to ask their constituents to pay more.

It all goes to show that there is something rotten with the system as a whole as well as the reforms that have been made to it. It’s all very well giving low-income households or those with disabilities a reduction on their council tax, but if a wide range of services that those families rely on are also being taken away who, ultimately, stands to benefit?

A very famous scientist apparently once said that the definition of insanity is doing the same thing over and over again and expecting different results. Councils cannot keep raising taxes and cutting – or threatening to cut – services and expect their citizens to be happy with it. We have learned the hard way that those two things not only do not produce positive results, but are grossly unfair too. It is clear that the time has come to grasp the council-tax nettle.

The Scottish Government has proved in the last few years that it can tinker with income-tax rates without the sky falling in. Whether it would choose to revisit Salmond-era proposals in light of that remains to be seen, although council umbrella group Cosla is drawing up plans of its own that would allow authorities to raise local taxes without having to obtain permission or legislation from Holyrood. Whether ministers would give their blessing for that remains to be seen, though one thing is for sure: council tax in its current form is barely fit for purpose; a rethink is long overdue.

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