Half of Scots want council tax scrapped amid warnings of huge hikes

Last month Councillor Kate Hagman, the resources spokeswoman for the council umbrella body the Convention of Scottish Local Authorities (Cosla), refused to rule out the possibility that some councils could increase the tax by 10 per cent as local authorities battle to balance their budgets.

Put to her that the cap had been lifted on council tax increases by the Scottish Government, she was asked what residents were likely to face and if the increase could be as much as 10 per cent.

"It's very important to make clear that all options on the table," she told BBC Scotland's the Sunday Show.

READ MORE: STUC to step up calls to SNP for council tax reform amid growing anger

The poll findings are published amid deepenings tensions between councils and the Scottish Government over funding for frontline services such as education, social work, as well as road and park maintenance.

A report published by the think tank the IPPR Scotland in 2021 said the council tax is unfair as low to middle income families pay the most as a proportion of income and higher value properties pay the least as a proportion of value.

Reforming council tax was promised by the SNP back in 2007 but plans have yet to materialise though with Cosla the Scottish Government set up a Commission on Local Tax Reform, which reported in 2015, to examine the current system and consider alternatives.

The survey was carried out for the professional body, the Chartered Institute of Taxation by pollster Mark Diffley from 12 to 17 January.

A total of 1,145 respondents participated with the research taking as a starting point the Commission's recommendation that the present system of council tax should end. Some 48 per cent of respondents agreed it should.

READ MORE: Ex health secretary Alex Neil calls for land levy to raise £2 billion for NHS

They were then asked to rate which alternative identified by the Commission they preferred - a reformed council tax, local income tax, property tax or land value tax.

Most favoured a reformed council tax, with the remaining opinion split equally between the other options.

Sean Cockburn, chair of the Chartered Institute of Taxation’s Scottish Technical Committee, urged ministers to make progress on a workable alternative to the current council tax system.

"If a workable alternative is to be proposed that is capable of winning public and political support, the earlier the process is started, the better," he said.

“There are a sizeable number of Scots in our poll who agree that the present system of council tax should end, but there are also a sizeable number who either didn’t know or neither agreed or disagreed if this a policy ministers should be pursuing.

“That being said, when given a range of options to choose from, a reformed council tax, using the existing band-based system but based on up to date valuations, commanded the most support."

READ MORE: SNP told to consider introducing local inheritance tax to fight poverty

He added: “None of the other options, a local income tax, land value tax or a property tax based on the percentage of a property’s value achieved the support of even three out of ten people in our poll.

“The options looked at by the Commission [on Local Tax Reform] are all options similar to those that have been considered by the parties represented in the Scottish Parliament.

“There was the local income tax proposed by the SNP when it first came to power in 2007 and then the changes made to the existing council tax system after the 2016 election – in this case, the tax was reformed so that homes in higher bands pay a higher proportion of tax, with some support for those on low-incomes.

“Then there are the plans put forward at the 2021 election, such as the proposals by Scottish Labour and the Greens to replace council tax with a tax based more closely on property values and the Scottish Liberal Democrats’ preference for a land value tax.

“The citizens’ assembly on council tax reform promised by the SNP-Green partnership agreement will allow a range of opinions to be heard. But finding an alternative that can command widespread support will require consultation and engagement across the political spectrum if a sustainable and workable replacement is to be found”.

Last month the Scottish Greens MSP Ross Greer called for a replacement to be agreed upon before the next Holyrood election in 2026.

He said he hoped cross-party consensus would finally be reached on how to reform local taxation.

"We know the current council tax system is grossly unfair," he said.

"You have folk whose house may be worth 15 times that of someone down the road - but they're only paying three times as much council tax.”

The Scottish Greens are in favour of a replacement system that focuses more on taxing wealth than income.

Earlier this month a report by the Institute for Fiscal Studies (IFS) warned local authorities face funding cuts even if they hike council tax by 5 per cent in each of the next two years.

Research by the said areas such as housing support, libraries, leisure centres, road maintenance and waste collection could all feel the squeeze.

It followed a leaked document revealing that councils estimate around 7,100 full-time equivalent jobs could be lost over the next three years as a result of the Scottish Budget.

The calculations were contained in a Convention of Scottish Local Authorities (Cosla) finance document that surveyed councils on the impact on the 2023/24 Budget projections. The IFS said the Government's grant funding for Scottish councils is set to fall by 0.8 per cent in real terms this April. Even if local authorities were to increase their council tax rates by 5 per cent, their overall funding would still fall by about 0.3 per cent in real terms, the think-tank said.

The body added the outlook for 2024/25 was more uncertain, but projections suggest the amount available for all public services is set to fall by 1.6 per cent.

A Cosla spokesman said:  “Cosla remains committed to working with the Scottish Government to reform council tax, to make it a more progressive and fairer tax.  This is alongside our long-standing call for greater fiscal powers for local government, council tax being the key tax which should be truly local rather than the current predominantly national system. 

"We look forward to meaningful engagement with Scottish ministers, on which we can build wider engagement with communities, to further our aims for genuine reform which ensures people pay toward local services, in the fairest and most democratically accountable way.”

A Scottish Government spokesman said: “We are committed to a fairer, more inclusive and fiscally sustainable form of local taxation.

“Scottish ministers have convened a Joint Working Group, including Scottish Greens and Cosla representatives, which is currently considering approaches to longer term reform.”