Official Report 441KB pdf
The next item of business is a debate on motion S6M-20654, in the name of Craig Hoy, on opposing the Scottish Government’s proposed council tax rises. I remind members who wish to participate in the debate to press their request-to-speak button.
16:02
In 92 days, Scots will be asked to pass judgment on 19 years of Scottish National Party rule. Nowhere is its record more wanting and damaging than in relation to Scotland’s local government. For a decade and more, this Government has chronically underfunded councils across Scotland. Now, many face the stark reality of being unable to deliver statutory services without double-digit-percentage council tax increases in May.
The numbers are clear. In 2020-21, the SNP Government provided 65 per cent of local government funding; in 2025-26, that number has dropped to 60 per cent. In 2010-11, nearly 40 per cent of all Scottish Government funding went to councils; that figure is now closer to 30 per cent.
Despite the SNP’s smoke and mirrors, in the period that this budget and spending review cover, there is a real-terms reduction in council budgets. As the Institute for Fiscal Studies says,
“Local government … is set to see reductions averaging 2.1 per cent a year in real-terms”.
Will the member give way?
I will give way to the cabinet secretary for her alternative logic.
They are called facts, and the facts are that, according to independent commentators, including the Accounts Commission and the Scottish Parliament information centre, there has been a real-terms increase in the budget, not just this year but in the past three budgets. Perhaps Craig Hoy should have a look at the facts instead of coming here and misrepresenting the situation.
I understand that Specsavers now does hearing tests—the cabinet secretary should have gone to Specsavers, because she did not hear what the IFS said. It said:
“Local government … is set to see reductions averaging 2.1 per cent a year in real-terms”.
Those are the facts, as interpreted in an independent body of analysis. Make no mistake, cabinet secretary—
Will the member give way?
I will give way again.
Cabinet secretary, briefly.
Just to again help Craig Hoy a little, that reference was to the spending review, not to the 2026-27 budget. He needs to understand the difference between a budget and a spending review. Will Craig Hoy now acknowledge that the 2026-27 budget will provide a real-terms increase to local government?
The minister stood in the Parliament during the budget statement and said that there will be a 2 per cent real-terms increase to local government, but that is simply not true. Repeating something that is dishonest time and time again does not make it true.
The hard reality is that, because of the SNP’s chronic underfunding, council tax bills for ordinary, hard-working Scots will go up in May. Those are people who are already reeling from the SNP’s income tax hikes, stealth taxes and the on-going cost of living crisis.
Not content with having crippled Scots with more and more tax to fund more and more benefits, the SNP Government proposes to pick people’s pockets again. Despite having pledged to scrap council tax in 2007, ministers have been content to let bills soar. Under the SNP’s new plan for council tax—which, we must not forget, is a tax that is paid from post-tax income—the bills for some households could rise from £2,700 per year to a staggering £6,515 per year.
Think about that figure. For a higher-rate taxpayer, more than £10,000 in pre-tax income will go to pay the price of the SNP’s persistent cash grab on councils. The Government’s own assessment shows that, under the SNP’s plans, anyone who lives in a home that is worth more than £240,000 will pay more in council tax.
Regardless of what flows from the consultation on council tax, we already know that the bills for some households will soar next year. The budget includes the creation of two new bands for properties that are worth more than £1 million. Those new bands, which will be imposed on larger homes regardless of the occupants’ income, will generate about £12 million per year. It will cost £5 million to potentially bring in £12 million, which is yet another big SNP fail on the value-for-money test.
Those households are sometimes asset rich but cash poor. The bands will affect elderly residents, some of whom will want to remain in their family home for as long as they can. Under the malign influence of the Scottish Greens, the politics of envy are all over the Government’s proposals.
However, it is not just those households that will pay more. That is why we are calling on the Scottish Government to scrap the plans for additional rates and ditch the council tax consultation. The consultation is nothing more than a smokescreen for higher taxes on middle-income Scotland—people who have had enough of year-on-year tax rises from a Government that takes more and delivers less.
As bigger bills drop through letterboxes next month, the Government is introducing more stealth taxes through the back door. Many residents now pay for garden bins, parking charges are killing high streets and plans for a visitor levy are set to do real and lasting damage to the tourism, hospitality and leisure sectors. Congestion charges threaten our cities and the prospect of workplace charging levies remains in place.
The minister will no doubt get to her feet to say that the decision on whether to introduce such new taxes will rest with democratically elected local authorities. However, in reality—this was clear when I spoke to the Convention of Scottish Local Authorities at lunch time—cash-strapped councils across Scotland will feel that they have no other option but to use those powers to plug growing gaps in their finances.
The threat of cuts to core services still looms large across Scotland. That includes school closures, swimming pools shutting, library hours reducing and bin services being scaled back.
In my own area of Dumfriesshire, the SNP-run council has consulted on a raft of deeply unpopular cuts. Those include closing small nurseries and rural schools; ending free in-school music lessons for primary and secondary pupils; removing funding for school-based police officers; shutting the Hillview leisure centre in Kelloholm; scaling back gritting and snow clearing, which will put lives at risk; and removing council funding for citizens advice services. That is the true cost of the SNP in Dumfriesshire and the true cost of an SNP Government in Edinburgh.
Right across Scotland, councils have announced cuts year after year. Taxpayers are now left wondering what will be left for Scottish councils after 19 years of austerity under the SNP.
Today, in our motion, the Scottish Conservatives again stand on the side of taxpayers, on the side of councils that need a fair deal from this Government, and on the side of common sense, lower tax and better value for money. We stand against an SNP Government that is seeking to buy votes through the bloated benefits system—an SNP Government that, I am sad to say, expects Scottish workers to pay for its woeful and misplaced priorities.
I move,
That the Parliament notes with concern the ongoing consultation on council tax reform; further notes that central government funding has been reduced in real terms in this and previous Scottish Government budgets; acknowledges the cumulative pressure on households from rising council tax, the introduction of additional local charges, fees and levies, and the increasing likelihood of further council tax rises; recognises the damaging impact that funding reductions are having on frontline and statutory local authority services; expresses a lack of confidence that the current consultation will deliver fair or considered reform, given the Scottish Government’s record of underfunding local government, and calls on the Scottish Government to withdraw the consultation and rule out proceeding with the proposed council tax reforms, including the plan to conduct a revaluation of every home in Scotland for council tax purposes, at a time when households are already struggling with rising bills.
I call the Cabinet Secretary for Finance and Local Government to speak to and move amendment S6M-20654.2.
16:10
I welcome the opportunity to speak and correct the misinformation in the Conservative motion. First, the budget improves the local government settlement with a 2 per cent real-terms increase, not a reduction, as Craig Hoy claims in his motion and as he claimed in his speech. Unless he is accusing SPICe and the Accounts Commission of being dishonest, he should correct the record at the earliest opportunity.
Secondly, Craig Hoy asked for the consultation and revaluation of all homes to be removed, but there is no Government proposal for a full revaluation whatsoever. What is proposed is a targeted revaluation for properties of more than £1 million in order to introduce, in 2028, two new high-value property bands in the council tax system.
Thirdly, on the on-going consultation, no specific proposal is being advocated. Instead, we are trying to determine whether a consensus can be found so that local government taxation is as fair a system as possible.
Finally, in the lead-up to the budget, our engagement made it clear that the consensus view was that it should be for individual councils to set their council tax rates without a freeze or a cap. That is what the draft budget allows for. That is a key demand from all COSLA leaders, including the Tory leader at COSLA. Is the Tory leader at COSLA wrong, Craig Hoy?
Always speak through the chair.
Earlier today, I spoke with COSLA, which, of course, is SNP-led, and I do not think that the Scottish Government should be lecturing anybody else on its relations with that organisation, which are strained at the moment. If the minister is content that the Government’s funding is reasonable, and the First Minister is saying that council tax increases should be around 3 per cent, why did COSLA tell me today that most councils are considering increases of 8, 10 or 12 per cent?
I can give you the time back, cabinet secretary.
We have provided a real-terms increase to local government and we have made sure that that funding is flexible. If Craig Hoy is suggesting that there should be some unspecified additional funding for local government, he should say how much and where it is coming from. Until he does that, he will not be taken seriously on the issue.
I appreciate that there is an election on the horizon, and that the Conservatives are flailing about using whatever desperate tactics they can to try not to end up in fourth or fifth place, but, although they appear happy to abandon any dignity, I ask that they correct the record for the inaccuracies that they have brought to the chamber today.
The consultation that Mr Hoy referred to closed last week and is part of a jointly agreed programme of engagement between the Scottish Government and COSLA to inform discussion and build consensus. Importantly, the consultation was underpinned by robust evidence, with independent analysis from the Institute for Fiscal Studies, which I know Craig Hoy is keen to quote from. That analysis and our consultation did not recommend a single solution; instead, it modelled a number of illustrative options and examined their potential impacts and how affordability could be protected.
All the options that were modelled were designed to be revenue neutral at a national level, meaning that they would not increase the overall amount of council tax that is raised across Scotland. The Government is clear that any reform must be fair.
The motion also raises concerns about funding, without ever saying how much more the Tories think should go to councils or how they would pay for it, given their call for £1 billion of tax cuts. We know that it is just back-of-a-fag-packet stuff.
The fact is that the local government finance settlement has increased by £5.5 billion between 2013-14 and 2026-27. That is a 54.6 per cent increase, or 7.3 per cent in real terms, delivered in the face of years of Tory austerity. As recently as 16 January, SPICe confirmed that the past three budgets have all included real-terms increases in the local government revenue settlement, and I mentioned the Accounts Commission earlier.
I want to distinguish clearly between the wider council tax reform and the targeted policy that was announced in the Scottish budget to introduce new council tax bands for the very highest-value homes that are worth more than £1 million, which some have called a mansion tax. I hope that Labour will support that principle, given the similarity to proposals from the Labour UK Government. The measure, which will affect fewer than 1 per cent of properties, seeks to address fairness at the top end of the system. Some multimillion-pound homes currently face bills that are not materially different from those for far more modest properties. If the Tories want to defend that, good luck to them.
I am happy to move amendment S6M-20654.2, to leave out from “with concern” to end and insert:
“that each local authority sets its own council tax rates; recognises the importance of building political consensus through the current consultation to deliver fair reform to local government taxation, and welcomes that a ‘Mansion Tax' will be brought forward in 2028 that will add two additional council tax bands, to be applied to properties valued at over £1 million.”
16:15
In 2007, a fresh-faced finance secretary by the name of John Swinney was entrusted with delivering the SNP’s election promise of scrapping the council tax. Instead, Mr Swinney imposed a succession of council tax freezes and decimated local government funding across two decades. The result for local government and for the vital services that it provides in communities across Scotland has been ruinous. The cuts that councils of every political stripe have had to mete out are the direct result of John Swinney’s centralising instincts in slashing council budgets and ring fencing funds to tie councils’ hands. Make no mistake: the parlous state of local government finances lies squarely at the feet of John Swinney and the SNP Government.
The reality of the SNP’s chronic underfunding of local government is clear for all to see. Social care services are in crisis, teachers are moving abroad and libraries are closing. There are potholes that people can swim in and swimming pools that they cannot. Those cuts scar our communities: lives are diminished, life chances are limited and vulnerable people are put at risk. Councils are at the stage when even delivering statutory services—the most basic of services, which they have a legal duty to perform—is a stretch. Local communities are paying the price through services that have been cut or reduced or have disappeared altogether, and through eye-watering council tax rises as a result of a decade of underfunded freezes.
Things have got so bad that even SNP councillors are at last speaking out. SNP councillor and COSLA resources spokesperson Ricky Bell has said that the SNP Government’s
“very poor settlement for local government”
is making council funding
“increasingly unsustainable”
and will force councils into
“reductions in services and jobs”,
as they all struggle with cuts from their SNP colleagues here in Holyrood.
The cabinet secretary has referenced the consultation on council tax reform, which closed in January. To suggest that change is just around the corner is, frankly, for the birds. The Government has had two decades to do that.
Talking of change, I refer to our proposal to introduce new council tax bands for the very highest-value homes—those that are worth more than £1 million. That is not dissimilar to the mansion tax that the Labour UK Government has introduced—although in our proposal, councils get to keep that money, unlike in the UK Government proposal, which involves taking the money to the centre. Does Michael Marra and his party support that?
We certainly support the principle. However, given what I have just laid out, believing in the Government’s ability to deliver anything at all in this area is, frankly, a stretch. My party has concerns about the bits and pieces that we hear about the way in which the policy might be designed. A number of the properties concerned are centralised here in Edinburgh, whereas the money might be disbursed across the rest of the country. However, we have no detail on how that will work properly, and people rightly have questions to ask about it.
On the principle, there are absolutely no problems at all. Let us wait and see how the policy is implemented. Of course, given the timeframe for its delivery, it is no solution to the challenges that we are speaking about today. It is years away from being introduced and will deliver a very small amount of money, so it will not address the crisis in our local authorities relating to the delivery of services.
We have had a promise, a commission, a consultation and a working group, and now we have another consultation. Those have all been attempts to kick the can down the road or pass the blame to somebody else. Contributions on the issue from the SNP back benches to date have been like blame bingo. This is a cowardly Government that has wasted years of majorities with no intention of ever doing the hard work of reforming council tax.
Staggeringly, the recently published spending review showed that, if the SNP wins in May, it intends to cut nearly £0.5 billion from local government budgets over the next three years. That is truly hard to fathom, given the criticism from SNP councillors about what is happening. What services will have to be cut? Which vulnerable people will fall through the cracks? That is what is at stake on 7 May.
I move amendment S6M-20654.1, to leave out from first “notes” to end and insert:
“is concerned for the future of local services, in light of nearly two decades of underfunding of local government by the Scottish National Party administration; regrets the failure of the Scottish Government to build a consensus for much-needed reform of local government taxation, and calls on the next Scottish administration to take leadership and create a sustainable, long-term funding solution for local government.”
16:19
I am not very surprised at my immediate feelings of frustration about how the debate is starting. There were some important and legitimate points that I agreed with in Michael Marra’s speech. However, tribalism is not going to take us anywhere, and finger pointing about the problem will not result in a solution.
Clearly, there are those who have worked hard to try to achieve reform of the council tax, and there are those who have stalled, blocked it or just not tried. I do not think that the public care very much about that. They have a right to feel that the Parliament as a whole—all of us—have collectively failed to reform council tax over decades. There has been huge success in devolution, and I am a massive fan of a great deal of what the Parliament has achieved, but the reform of council tax is a long-standing failure of multiple sessions and multiple Governments.
The idea of levying a property tax based on property values set in 1991 is absurd enough in itself, but how long do we allow that situation to continue? If 35 years out of date is not bad enough, will we allow it to be 40 years out of date, 50 years out of date or 60 years out of date? How much more broken can the system become? Even in 1991 it was an unfair system, with the ratio of the highest to lowest tax payments being 3:1 and the ratio of the highest to lowest property values being 8:1. That gap has increased dramatically as property prices have increased, so the system is even more unfair—probably dramatically more unfair—than it was then. We know that most households are in the wrong band. How on earth can we justify the continuation of a tax when we know that most households and council tax payers are paying at the wrong rate?
Polling shows that there is strong public support for reform. I acknowledge the work of Tax Justice Scotland, whose briefing sets out the polling. Of those who expressed a view in the opinion poll, a massive 84 per cent wanted political parties to make clear commitments in the coming election campaign to reforming council tax, while a negligible proportion—just 2 per cent—thought that people in low-value homes ought to be paying proportionately more, in relation to their property values, than people in higher-value housing. That shows negligible support for the status quo and for the unfairness of the current system.
We in the Greens have done our best over many years to make the case for reform, not just arguing for it but doing the detailed work to show what a land value tax and then a mixed-base property tax based on modern property values would look like and how that could be made to work, as well as setting out the reasons why a property tax is still important. Property tax has an important role to play in a diverse tax system.
Consultation after commission after commitment has not resulted in action, so we have also worked hard, including in recent years, to pursue shorter-term small changes. I am very pleased that we have managed to have success in some of those efforts in recent years; we have made small changes. However, the situation cannot last—we all acknowledge that the system is broken, out of date and chronically unfair. It needs to change, but all we do is keep tweaking at the edges to try to ameliorate the unfairness a little bit. That cannot continue.
Every political party needs to make a solid commitment in May to the reform of council tax and needs to be ready to act on those commitments after May, whoever is returned by the public in whatever numbers.
16:23
I am much more optimistic than Patrick Harvie is about council tax reform and local government finance reform. I have sat through endless meetings in this building where we have had excited conversations about reform, and this is another one that I cannot wait to happen.
The tumbleweed rolls by, while we wait for explanations from ministers as to exactly what they want to do, and nothing ever comes—nothing. I have sat with minister after minister, and they say, “Yes, we are very serious about council tax reform, and we are here to listen to all of your views.” We say, “Right, we’ve given your our views. What is going to happen now, then?” They say, “We will come back at the next meeting and we will tell you all about how we are going to take it further forward.”
Will Willie Rennie—
Just a minute. I have not got to the punchline yet. [Laughter.] There is a punchline.
Then, there is a ministerial reshuffle, and the next innocent soul comes in and tries all over again to excite us about the proposals. They say, “Tell us what you want to do.” We then go through the whole thing over and over. I think that I went through three rounds like that.
I am serious when I say this: when ministers say that they are up for reform, frankly, I do not believe them. I do not think that they really want to do it, and I do not think that they will ever do it. I would rather that they were just honest about that and adopted the Conservative position. The Conservatives, to be fair, have been honest about this from the beginning: they want to hold on to the post-Thatcherite tax regime. They are quite keen on it and on the fact that it is 35 years old. They like that. They like the fact that the valuations are stuck way in the past. They like all that, because they are conservatives.
The SNP should just be honest that it favours that as well, because it is too scared to change anything. I get that change is hard. Change is really difficult, but the SNP has not changed things one jot. It has tinkered at the top end and made itself feel virtuous by changing the tax for the upper bands. However, in reality, that has not changed anything for local government, which has not been given a proper settlement that respects its needs so that it can pay for the public services that we demand of it.
I just hope that ministers will take that away and either stop pretending that they are trying to change things or give us something serious. We have had commissions, talks, reviews, expert groups and the wonderful citizens assembly that died a death almost before it started. Let us do something serious if we are serious about reform.
Craig Hoy and the cabinet secretary were talking past each other about whether the 2026-27 settlement represents an increase or a reduction in funding for local government. They were both right, to some extent, because the cabinet secretary was looking to the past and Craig Hoy was looking to the future. However, the central bit of it is that the cabinet secretary said that Craig Hoy was referring to the spending review figures and not the budget figures. Does that mean that the spending review figures are not accurate and that the figures will go up? Will the cabinet secretary tell us that and whether it is guaranteed?
In no spending review outlook do the figures stay the same from budget to budget. Let us look back to the projection for local government in the spending review for 2025-26. Local government has £3 billion more than was anticipated in that spending review. That is the point that I was making.
I accept that. However, from looking at the chart, it is very clear that the spending lines go up for health, education and many other departments. Local government is way at the other end of the scale. Why has local government been singled out for that treatment? Why does the Government not give a proper projection for what it thinks local government will get, so that local government can plan properly to shape the services that we need, rather than the Government playing that constant game of underestimating, putting the figure down and then bumping it up later? It is just a game.
Will the member give way on that point?
I do not know whether I have the time.
Not even for your punchline, Mr Rennie.
I wish that we would treat local government with a bit more respect. Let us give it a proper settlement to meet the demands that it faces and the expectations that are put on it. In doing so, we might start to get a more efficient and effective council system than the one that we have now.
16:28
I praise my party, the Scottish Conservatives, for bringing this very important topic to the chamber. Local governance affects each and every one of us. Our local roads, schools, parks and social care services are primarily the responsibility of our councils. However, 19 years of the SNP in power have led to a deterioration of our services, with our councils struggling for funding.
Every year, the SNP is presented with a new opportunity to properly fund local government. However, every year it seems to find any excuse not to. COSLA leaders have agreed that the settlement in the latest SNP budget fails to address the dire situation that our councils are in. At the same time, the Accounts Commission has forecast that Scottish councils face the pressure of a budget gap of £528 million. We have had 19 years of SNP financial mismanagement, under which it is the people who have not been getting value for money. Somehow, Scots still face crumbling local services and even paying more and getting less.
I want to take some time to speak about the state of public services in my area of East Dunbartonshire. East Dunbartonshire Council faces an £18 million budget gap, which is expected to become even bigger. Council budgets keep shrinking, while the SNP Government keeps ring fencing millions for certain projects that could have been used for the council’s own priorities, as it saw fit.
To make up for all that, once again, East Dunbartonshire residents will be the ones who will pay the price. Last year, council tax increased by 13 per cent. As my colleague Craig Hoy said, under the SNP’s plans, anyone who lives in a home that is worth more than £240,000 will pay more in council tax. Under those plans, the bills of some households could rise by as much as £2,700 to a shocking £6,515 a year.
The SNP likes to talk a good game. On one hand, it says that it is the saviour when it comes to helping people with the cost of living crisis while, on the other, it raises taxes. The SNP is squandering the money of hard-working taxpayers on the wrong priorities.
One would have assumed that services would be getting better but, instead, they are being cut left, right and centre. When I speak to people on the doors, the number 1 local issue that comes up is the state of the roads and the number of potholes. Another issue that frequently comes up is the fact that bin collections in East Dunbartonshire have now moved to a three-weekly cycle. That is especially worrying for big families and families with young children.
In addition, there is no money to tidy up the green areas, such as parks, with children being exposed to needles and dog waste, and let us not forget SNP-run Glasgow City Council’s crazy idea of imposing congestion charges, which affect my constituents even when they enter the city to visit a hospital, among other things.
That shows that the 19 years of the SNP’s financial mismanagement extends beyond Holyrood and into our councils, with services being worse off now than they used to be. Public services and local authorities are in desperate need of a fair funding settlement.
I realise that I need to conclude, Presiding Officer. I cannot emphasise enough that people are sick and tired of the SNP’s high-tax and high-spending agenda. The SNP has already made Scotland the highest-taxed part of the UK, and it most certainly cannot be trusted with reshaping our tax system.
16:33
I am glad to be able to speak in the debate.
I was a councillor in East Lothian from 2007 until 2022 and council leader from 2010 until 2012. It was always a busy time when we discussed our budget-setting decisions. Those were tough decisions, but our priorities were always part of that process.
I remember the report of the Christie commission, which came out on 29 June 2011, when I was leader of East Lothian Council. The Christie report stated:
“If we are to have effective and sustainable public services capable of meeting the challenges ahead, the reform process must begin now.”
Here we are, discussing it 15 years later. As Patrick Harvie said, it is the responsibility of all of us to pursue that process.
The principles that must inform the reform process are as clear today as they were then:
“Reforms must aim to empower individuals and communities”.
That is a responsibility not only of Government but of local authorities.
The Christie report went on to say:
“Public service providers must be required to work much more closely in partnership, to integrate service provision … We must prioritise expenditure on public services which prevent negative outcomes”
and work together with a view to becoming more efficient.
Will the member give way?
I am sorry, Mr Hoy, but I only have four minutes.
I took that challenge seriously as council leader. I worked with the then Labour-controlled Midlothian Council and we proposed having a combined education service. We worked with stakeholders in a formal consultation process and came up with a proposal that would have delivered combined savings of millions of pounds. However, when the formal Labour-Tory coalition came into power in 2012, it decided not to proceed with the proposal at that time.
It is safe to say that the recommendations of the Christie commission have been progressed on only a limited basis. Again, that is the responsibility of us all in this place. I am obviously aware of the work of Ivan McKee on public sector reform. In the next session of Parliament, members must work together in a cross-party manner to move that agenda forward.
I struggle a little with the part of the Tory motion that expresses a lack of confidence that the current consultation on the future of council tax will deliver fair and considered reform. That consultation seeks views on how Scotland’s council tax system could be made fairer and up to date. We will have to make a judgment after the consultation responses have been received.
If the council tax is to be replaced at some point, we need to ensure that it remains fair in the meantime. In the early years of the next session, Parliament—not just the Scottish Government—must progress and prioritise council tax reform or replacement. That point has been made by Willie Rennie and Patrick Harvie, but one of the key points to make is that there have been no formal proposals from the Tories on that issue. The issue will be a challenge to all members of the next session of Parliament. There have to be mature, rational and pragmatic political discussions on the subject in this place, and in council chambers, too, after the council elections in 2027. We cannot let electoral cycles dictate the pace of change.
Local authorities’ ability to raise money is limited. We all acknowledge that. Council tax is a key source of income, obviously. Income from fees and charges for services makes up a small percentage of what councils can raise. Non-domestic rates are another source, but the poundage is set by the Scottish Government nationally. Of course, there is now the visitor levy, with councils having discretionary powers to introduce a levy on overnight accommodation stays. Further, there are other potential levies. I find it ironic that the Tories talk about choice, yet they are against local authorities having the choice to introduce workplace parking charges.
Local authorities can raise only between 15 and 20 per cent of their income. Their other source of funding is from central Government. In most European countries, municipalities raise around 50 per cent of their income through local income taxes, sales taxes, visitor levies and various other levies. That gives local authorities more freedom to raise funds and increases their accountability. Grant funding from central Government needs to focus on securing agreed mutual national policy objectives. We need to engage the spirit of the Christie commission and look again at public sector reform. We need to use the refreshed political mandates in 2026 and 2027 to move ahead at pace. The principle of allowing local authorities to raise more of their income, combined with joint national accountability, needs to be progressed. That will require brave, pragmatic politicians. That is what our electorates deserve. That is a challenge to us all.
16:37
Funding for local authorities has been whittled down by successive SNP Governments time and again. They have asked local authorities to do more and more with less and less.
As we saw in the provisional budget, Shona Robison and John Swinney occasionally like to come after some small sections of the population, so that they do not upset too many people close to an election. This time, they have come after businesses, with the business rates revaluation, and the people who live in properties worth more than £1 million or £2 million.
Is Mr Russell saying that he is against the increase in council tax for those who have the biggest houses?
If the member had waited to hear the next part of my speech, she would have heard what I think.
People who live in houses worth more than £1 million should pay their fair share—absolutely, yes—but the increase will not make much of a difference to local government coffers. It is expected to raise more than £10 million a year. That is a drop in the ocean: it comes to 1p per person per day, which ain’t gonnae change anything. If the additional income reaches the projected amount, it should be used to create employment and upskill existing workforces, to allow them to get better-paid jobs, rather than plugging holes created by mismanagement, such as the ferry fiasco or the phantom Gupta smelter in Fort William, to name but two.
Taxes on businesses that are not based on profits but on square footage will always end in tears from the point of view of our need for employers to deliver the jobs that will bring down the number of young people aged between 20 and 24 who are not in education, employment or training.
All the while, the SNP is wasting money with its ever-growing army of civil servants. In real terms, the civil service wage bill has gone up more than 90 per cent since 2016, while local authorities have seen an increase of only 9 per cent.
Will the member give way?
Naw, I have to keep going now.
My constituents know that the funding has not been sufficient. They know that, when their child’s school is struggling to employ a learning support assistant, that is because the council does not have that funding available, and that, when their pavement is crumbling away, that is because there has been an underinvestment over the past 20 years in the general maintenance of the streets.
Michael Marra is absolutely right. We need the next Administration to take charge, take responsibility, stop passing the buck to local authorities and stop expecting miracles while failing to deliver nationally. We must create a sustainable plan for local government funding.
16:40
The SNP proposals to shake up council tax in Scotland are yet another brutal raid on household finances, shifting even more pressure on to families and councils at a time when both are already under serious strain. Across Scotland, families face higher energy bills, rising food prices and increased mortgages and rents. Against that backdrop, the prospect of council tax rises, combined with additional local charges, fees and levies, is not only unwelcome but unfair. Taxpayers should not be treated as a cash cow to compensate for the nationalists’ repeated failures to manage the public finances.
Over recent years, Edinburgh residents have seen a significant change in how the City of Edinburgh Council raises money, through a steady creep of new charges, permits, penalties and fees. Those are never presented as council tax rises but together amount to a fundamental shift in who pays, how they pay and how often they pay. For example, until 2018, garden waste collection was free. However, the council then introduced a permit, initially at £25 a year. Today, that permit costs £45—an 80 per cent increase—which is paid on top of council tax. It was justified at the time, but around 70,000 to 77,000 households now pay that charge every year, and the service generates nearly £3 million annually and has generated close to £10 million in the past four years.
Another example is parking charges. Controlled parking zones have spread across Edinburgh, whether residents want them or not. Residents who once parked outside their homes can no longer do so unless they pay the council for the pleasure. The cost may appear small, with a typical resident permit costing between £80 and £100 a year, but to have to pay that simply to park outside their own home is ridiculous. Nevertheless, if they live in a controlled zone and they own a car, what other choice do they have? They have to pay to park. There are plans to introduce parking charges across towns in East Lothian, in a rather tone-deaf manner. Moreover, East Lothian Council wants to make its own staff exempt, which would be utterly unfair.
Businesses face the same cumulative pressure, as business rates have driven their bills up higher still. If we add the rising parking costs, waste charges and enforcement penalties, it is clear why so many small businesses feel squeezed out of the city. Let us not forget the punitive low-emission zones, with escalating penalties for entering certain parts of the city.
A visitor levy—in effect, a tourist tax—is planned next. It has been pitched as a solution to every budget pressure in the capital. The tourist tax will pay for this; the tourist tax will pay for that. Everyone is queuing up for a bit of the cash. However, everyone would pay, not just the tourists. Someone from Linlithgow who stayed overnight in Edinburgh would pay—as would I, an Edinburgh resident, if I fancied a night in the city. I already live in the city and pay its council tax.
Each charge may have a tangible benefit and a rationale to those who choose to introduce it. However, taken together, the charges represent a shift away from transparent collective funding and towards piecemeal charging through which residents pay repeatedly, quietly and often without choice. That is what stealth taxes look like. They are harder to see than a single tax rise, but they are felt every day on the high streets and in households across Edinburgh.
Central to that problem—and the cause of it—is the long-term underfunding of local government by the SNP. That has left councils facing impossible choices between cutting vital services and increasing local taxes. From social care to road maintenance, everything is under strain.
We recognise that council tax is not a perfect system. However, any reform must be fair, proportionate and rooted in economic reality. The current consultation does not meet that test. Instead, it risks creating further instability and anxiety. It should be withdrawn and councils should be funded properly, so that they can protect essential services and deliver real relief for households.
Jamie Hepburn is the final speaker in the open debate.
16:44
I will begin by considering the work that has been undertaken and committed to on council tax reform. For context, it is important to note that that work is not being undertaken solely from the centre, without engagement with others. Reform is being pursued in partnership with local government through engagement with COSLA and local authorities. Even more crucially, it is being pursued through engagement with the public, as we are enabling them to submit their views on how we should reform council tax.
That is a perfectly sensible way to do things. We should take informed decisions through the process of consultation. Mr Hoy’s motion seems to view consultation as something of a concern, but there is nothing wrong with engaging in consultation.
Members might recall that, in 2015—although I am increasingly aware that there are fewer and fewer of us who were in the Parliament at that time—a cross-party commission on local tax reform was created. That brought together voices from the Labour Party, the Greens, the Liberal Democrats, my party, the Law Society of Scotland, Citizens Advice Scotland, the Joseph Rowntree Foundation, the Institute for Society and Social Justice Research and the Chartered Institute of Public Finance and Accountancy. The commission’s work was also informed by nearly 4,500 members of the public who contributed their views through the process of consultation.
I note that the Conservatives did then what they are doing now. They abdicated any responsibility for engaging with the process and coming forward with ideas, because they refused to take part in the commission.
We should remind ourselves that alterations to council tax were made as a consequence of the commission. Changes were made to the ratios in the upper bands of council tax, and the work that is being undertaken now flows directly from that work.
Does Jamie Hepburn acknowledge that, although the commission agreed that council tax must go, that did not happen?
I recognise that there were wider conclusions from that process. As I said, there is nothing wrong with the process of engagement and coming forward with ideas. The big challenge that we have faced has been in trying to get any form of consensus.
Will Jamie Hepburn take an intervention?
I see Mr Marra rising to his feet. He took us even further back, to 2007, when—he is correct to say it—my party made a commitment to try to abolish council tax. However, that was not possible, because every other party in the Parliament stood in the way. That is one of the challenges that we face in trying to reform local taxation.
Jamie Hepburn mentioned the consultation in 2015. Is it correct that the SNP had a majority at that time?
Indeed—of course we did—but we tried to take things forward with consensus. With respect, I note that the commission reported in 2015, just as we headed into another election, when, unfortunately, we did not get a majority. Of course, I look forward to my party securing a majority at the next election, and I am sure that Mr Marra will be delighted, when we have that majority, for us to impose our will in the Parliament.
On a more serious note, it is important that we have a balanced debate on the issue. There is nothing wrong with a Government, in conjunction with others, taking forward a process of consultation to see how we can further refine council tax. I recognise that there is a wider debate about whether council tax is the most appropriate or best form of local taxation, but it is here now. While it is here, we should do what we can, as we did back in 2015 and 2016, to refine it and make it fairer. That is being done now through the changes to council tax on properties that are worth more than £1 million. I support that approach, and I will support the Government’s amendment.
We move to winding-up speeches.
16:49
I used my opening speech to set out some of the arguments as to why council tax is fundamentally broken and unfair and why it needs to go. I will use my closing speech to reflect on the motion and the amendments.
It will probably not come as a surprise to anybody that I will oppose the Tory motion. In my view, the Conservative Party is standing up for unfairness and refusing to recognise that low-value homes are overtaxed and that the homes of the very wealthy are undertaxed. In my simple naivety, I thought that even the Conservatives would not have the brass neck to use the empty canard of saying that Scotland is the highest-taxed part of the UK during a debate on council tax, given that the average band E council tax in 2024-25 in Scotland is £1,421 and in England is £2,171. That is 50 per cent more in England than in Scotland.
As for the Labour amendment, just like Mr Marra’s opening speech, there is much that I can agree with in it, but I will set out why I cannot support it. Local government funding is something that Greens have worked for many years to try to protect. Sometimes we have been more successful and sometimes we have been less successful—I acknowledge that—but, for goodness’ sake, could Labour’s budget vote this year not have come with a price tag attached? Could Labour not have used its influence in this Parliament to say that it will let the budget go through only if a change to the local government funding settlement is implemented? Yet again, for another year, Labour is offering the Government the opportunity for the budget to go through without any amendments. That is an abdication of the responsibility that we all have to exercise the influence that we have been given by our voters to try to achieve change.
The Labour amendment talks about the long-term trajectory of local government funding. In truth, local government funding in England was cut by the UK Government by 40 per cent between 2010 and the end of that decade—there was a 40 per cent cut in central Government funding for councils in England. The situation in Scotland is not what I would wish it to be—it is far from perfection—but it is nothing like the brutality that has been seen south of the border.
Finally, in its amendment, Labour talks about seeking and building consensus. I say again that that is on us all; we cannot point the finger at the Government and say, “You haven’t built consensus,” because that is not what consensus means. The place of the word “consensus” is something that I want to bring up in relation to the Government’s amendment, because there is a reason why I will not vote for that either. To be clear, I will abstain on the Government’s amendment, although I will allow it to go through, because it is unquestionably a big improvement on the Tory motion—of course it is.
On the point of local control, I agree with the words in the amendment, but they are a little hard to swallow after many years when central Government in Scotland has capped council tax and disrespected the principle of local control, most recently in a way that broke agreements not only with my party but with local government, which the ink was barely dry on when that council tax cap was imposed.
I implore the Government and the other parties to accept that consensus is not coming—we are not going to have consensus on this issue. It is very clear from members in the chamber today, and from those who may be in the chamber after the election, that we are not going to get consensus—do not hold out for it. What we need is a majority in Parliament to achieve fundamental reform and the political will to do it. Let us not kid ourselves that consensus is coming on this.
16:53
The debate has highlighted that Scotland’s councils are under pressures created not by a single year’s decisions but by nearly two decades of sustained underfunding and centralisation by this Government. Scottish Labour’s amendment reflects that reality. Local services are at risk because of political choices that have weakened local democracy and stripped councils of the resources and flexibility that they need. Councils have faced year-on-year real-terms cuts, rising responsibilities without rising match funding and a steady erosion of their ability to respond to local needs and priorities.
The Scottish Government speaks of empowerment, but the lived experience for councils has been less autonomy, more directed spending and an ever-tightening grip from the centre, and the Accounts Commission’s latest bulletin reinforces that. Ring-fenced funding is now at 24 per cent, council debt has risen sharply and usable reserves have fallen.
Sixteen councils relied on unplanned reserves last year and, despite delivering around 90 per cent of planned savings, a third of councils still overspent their revenue budgets.
Those are the direct consequences of long-term underfunding, and they are being felt in every community, high street, town, village and city in Scotland. Against that backdrop, the Government has brought forward council tax proposals that are unclear and low impact, and are years away.
As Michael Marra said, we support those proposals in principle, but we asked very basic questions about the plans—how many households would be affected, how much revenue would be raised and how the revaluation would work—and the Government could not answer.
SPICe confirmed that fewer than 1 per cent of homes would be affected; the plan would raise only £12 million to £16 million a year, which is around 2 per cent of last year’s funding gap; and the revaluation needed to deliver it would cost roughly £10 million.
Legislation will not even be introduced until 2027, with implementation in 2028. That is not reform—it is delay, disguised as action. When it comes to funding local services, what Scotland needs is leadership, which has been lacking over the past almost 20 years. Even with majority and near-majority Governments, the answer is consultation after consultation, commission after commission and no real leadership on the reform of council tax.
A Scottish Labour Government will deliver a credible, progressive council tax reform; provide a sustainable, long-term financial settlement; and rebuild a genuine partnership with local authorities that is based on respect and shared purpose. Scottish councils are the backbone of our communities, and they deserve better than sustained cuts and consultations. The Conservative Party motion identifies the symptoms, but the amendment in the name of Michael Marra identifies the cause and the way forward.
16:57
I will address directly the characterisation that Mr Hoy has put forward both in this debate and more widely. What has been described as a tax grab is, in reality, a process of evidence gathering and public engagement that has now concluded.
Tell that to the people who are getting taxed.
Conservative members should listen; they might learn something.
Members: Oh!
No decisions have been taken by the Scottish Government to increase council tax bills across Scotland; no household has been issued with a higher bill as a result of the consultation; and no plan for reform has been agreed, let alone implemented. It is simply not accurate to suggest that this work represents an attempt to extract more money from households. The independent analysis that informed the consultation examined options that were explicitly designed to raise the same overall amount of revenue nationally, not more, and the members on the Conservative benches opposite should reflect on the reality of that.
Will the member take an intervention?
I know that they are finding the current electoral challenges difficult, as they have moved down into fifth place and are having to clutch at straws, but they should debate with the facts and not with their own perceptions of reality.
The analysis also looked in detail at affordability; at who might be affected; and at how protections could be built in to prevent sudden unmanageable changes.
I give way to Mr Hoy.
The minister has moved on, but I wonder whether, in the light of the Government’s record on tax, anybody actually believes a word that he says when he says that there will be no material increase in the overall tax take. Is that not just proof, yet again, that the Scottish Government will use smoke and mirrors to hide its intention to raise tax on ordinary hard-working Scots?
What I said exactly was that the options were explicitly designed to raise the same overall amount of revenue nationally, and not more. Mr Hoy suggests that households have been singled out to pay for wider public spending pressures. In fact, the purpose of this work has been to look carefully at how the system operates, how it distributes liability and whether it does so fairly. Illustrations were revenue neutral so as not to increase the overall burden on households.
It is also misleading to imply that councils have been ignored or undermined in the process. The programme of engagement has been undertaken jointly with COSLA, reflecting a shared recognition that any discussion about council tax must take account of local government’s role, responsibilities and financial sustainability.
Annual funding decisions, including support for councils, are rightly addressed through the budget and fiscal framework, not through structural reform of council tax.
I will take a minute to reflect on some of the other contributions. As often happens, and as we have had again this afternoon, some members from the Tory benches call for spending increases and others call for tax cuts. Pam Gosal managed to get both of those suggestions into the same speech, which was interesting to hear. Sue Webber made some comments about council funding, without recognising the fact that five or six councils went bust under the Tories down south. As Patrick Harvie rightly pointed out, during the 10-year period when the Tories were in office across the United Kingdom, council funding in England was cut by 40 per cent. At the same time, council tax bills ended up more than £600 higher for band D in England than they are in Scotland. The Tories should reflect on that when they are commenting on the debate.
We welcome Michael Marra’s confirmation of Labour’s support in principle for our proposal to put in place new council tax bands for properties of more than £1 million. Both he and Mark Griffin said that there were questions that had not been answered, but Michael Marra will be delighted to hear that Mark Griffin went on to answer those very questions. If those members have any further questions on the process, which I think we have laid out clearly, we would be very happy to pick those up separately with them.
Finally, it is important to recognise that the Parliament has not been asked to endorse a particular reform, nor to approve any full-scale revaluation, nor to agree changes to council tax bands. What has been taking place is a consultation that is supported by independent analysis, followed by public engagement. The findings of that work will be published and will inform consideration of the issues by the next Parliament. That is the appropriate sequence for a question of this significance. Rhetoric—and that is all that it is—about increases of thousands of pounds or claims that decisions have already been taken do not reflect the reality. I welcome debate on the issues, and we welcome scrutiny and challenge, but the debate should be grounded in facts and evidence and in an honest account of what has and has not been proposed.
I invite Alexander Stewart to wind up the debate.
17:02
I am happy to close for the Conservatives. Once again, we find ourselves debating the SNP Government’s badly thought-out tax reforms. This time, the spotlight is on council tax reforms, at a time when householders are under increasing pressure. The prospect of council tax reform and higher bills would be concerning for individuals the length and breadth of Scotland. The consultation cannot be viewed in isolation. It must be considered alongside years of real-terms cuts to local government funding.
It is actually a real-terms increase in funding. How does Alexander Stewart square what he is saying with the fact that council tax bills in Scotland are, on average, £600 lower for a band D property than those in England, where his party presided over the huge increases in council tax?
I can give you the time back.
The cabinet secretary is not looking at this like-for-like. We on this side of the chamber reflect on what the Scottish Fiscal Commission and the Fraser of Allander Institute say when they tell us that the Government is not giving enough funding to local government.
As I have said, we have to look at the shortfall in context. As we have already heard, tax increases are a decision for councils, but councils require funding to be given to them. The Government has starved councils for years, so residents will pay more and get less.
We have already heard that the average tax increase last year was about 9.5 per cent. In my region, SNP-run Clackmannanshire Council raised council tax by a staggering 13 per cent. This year, it is talking about having another funding gap of £7 million, while Stirling Council will have a gap of £12 million. Councils the length and breadth of Scotland are being squeezed.
COSLA has also highlighted that the latest Scottish budget delivers a poor funding settlement for local government. The Fraser of Allander Institute has indicated that the average bill will have to rise by 8 per cent this year alone for budgets to stay where they should be. The Government is not putting anything forward; it continues to short-change local government and councils across Scotland.
One way of dealing with that would be to secure a guaranteed share of the Scottish budget. We have been saying that for a number of years. The Fraser of Allander Institute has also indicated that a decrease in funding will continue. We first talked about that being done in relation to local government funding many years ago. We are still talking about it today.
We have heard lots of contributions this afternoon. My colleague Craig Hoy talked about the devastation that councils are facing, with cuts upon cuts, and about how more people will receive more bills that are going up this year. Bills are going in the wrong direction. That is affecting hard-working families, hard-working businessmen and women, and hard-working individuals. The consultation should be ditched. We are happy to stand on the side of the hard-working taxpayer.
We also heard from the cabinet secretary that any reform must be fair. How is it fair to hammer hard-working Scots?
Michael Marra talked about the importance of the council tax freeze that has been forced on councils by this Government. That is undermining and underfunding councils year on year.
Will the member give way?
Pam Gosal talked about how it affects each and every one of us. Nineteen years of SNP control has had a devastating effect: £528 million pressures are being talked about.
Will the member give way?
My time is limited, but I may come back to the cabinet secretary.
Mr Stewart is contradicting himself.
Not at all.
People are talking about having to deal with more. That is a real issue for many councils. Thousands will have to pay more in Dunbartonshire. Pam Gosal spoke about how that is going to happen.
Sue Webber talked about the raid on households in her area. It is not welcome and it is not fair. As I said, the cabinet secretary talked about a fair system. We do not have a fair system. That system is not working. Sue Webber spoke about the new charges, penalties, fees and permits in Edinburgh. Those are all having a massive impact on individuals the length and breadth of her community. People are paying parking charges outside their own front door, and businesses are suffering from stealth taxes and continued piecemeal charging.
This SNP Government insists on endless tinkering with devolved taxes in the hope that it will fix some of the problems that it has created. If councils continue to be squeezed, no amount of tinkering with the tax system will prevent them from raising bills. That is what we have seen today. This Government needs to be honest about the financial pressures facing local government, and about the political will to address that properly. It has to talk about that.
Whether it is income tax, council tax, business rates or stealth taxes, this Government cannot be trusted to reshape Scotland’s tax system in any shape, way or form. As today’s motion sets out, the SNP should step back from this flawed consultation and focus instead on delivering, and on talking about stable funding and genuine partnership in local government. That is what local government wants to see and wants to be involved in, instead of seeing us crying out for that. It has been crying out for that for years.
As we are going to see, people will pay more and get less. That is the SNP’s local government tax policy, and that will continue to be it.
That concludes the debate on opposing the Scottish Government’s proposed council tax rises.