No income tax cuts, but Tories pledge Barnett formula style framework for councils
Douglas Ross has said Scotland’s 32 councils need a Barnett formula-style funding framework to put local government on a more secure financial footing, as he ruled out reforming the council tax or income tax cuts at his party’s manifesto launch.
The Scottish Conservative leader said his party would be focused on“rebuilding Scotland”after the c ovid pandemic, and would introduce 15 major pieces of legislation over the course of the next Scottish Parliament term if elected to government.
He said he would not look to cut income tax while the country recovered from Covid, but pledged a communities bill that would "properly fund local services”.
Mr ross said scotland was the “highest taxed part of the UK” because of the “uncertain fiscal situation” as a result of the c ovid pandemic and tax cuts “should only be considered when we can afford to do so”.
But he added: “By the end of the Parliament, we would seek to ensure that Scottish taxpayers do not pay higher income tax than those in the rest of the UK, while retaining the starter rate for low earners.”
Mr Ross also said councils needed a Barnett-style formula for council funding, as local authorities had not seen equivalent increases to rises in the Scottish Government’s budget as a result of UK Government spending.
He added: “That is why the Scottish Conservatives would bring forward a Communities Bill to introduce fair funding for our councils.
"This would deliver a new financial framework that ensures councils automaticallyreceive a set percentage of the Scottish Government budget each year, mirroring the relationship the Scottish Government has with the UK Government.”
Asked if the move would mean changes to the council tax, Mr Ross ruled it out.
"We’ve made a commitment there will be no changes to council tax over the next five years, because what we’ve seen through successive SNP manifestos are pledges to change the system, but nothing has happened,” he said.
"We need a period of stability, so we wouldn’t change the council tax system, but we would set up a Barnett-style formula so as the Scottish budget increases, the councils across Scotland know the proportion of that budget they will receive, so we don't have a situation where the Scottish Government is asking councils to do more with less.
"We would work with cos la to make sure we have a system that works for the local authorities. What ire ally want to see is local services protected.”
His manifesto states that as there is no cross -party support on reforming council tax, the Conservatives would “not support any overhaul or revaluation of the council tax system over the next five years”.
"It will be for parties to build a consensus in the next Parliament around are formed system and then put it to the Scottishpeople in the next election ,” he said.
However, when pressed if this meant that despite his ten years as a councillor in Moray and taking soundings from current Tory councillors, he was just kicking the issue into the long grass, he said: “The SNP have pledged to scrap it and reform it, the Greens propose to make hard-working families pay more.
“There is no consensus, so we need to have a proper discussion going forward.
"Take Moray – if the council raises council tax by 3 per cent, that’s just shy of an extra £1 million, so increasing or decreasingit has a very minor impact on the overall council budget and funding of services.
"The largest amount of funding comes from the government and that’ swhyi want to focus on ensuring that grows for councils in the same way the Scottish Government’s budget has grown.”
He admitted that when“asked to do more ”, councils have been given ring-fenced funding from government, but said in many cases this “hasn’t fully covered the costs”.
“Cos la, during the budget process this year, was raising concerns and then we get the SNP paying councils to freeze council tax again,” he said.
"So many services have been lost over the last 14 years and it’s time councils were properly funded again.”
Mr Ross also pledged to “ensure proper protections for local decision-making” and pointed to the four in ten planningdecisions which, on appeal to the Scottish Government, saw the council’s original decision overturned.
"That means hundreds of developments going ahead on the instruction of an SNP Government in Edinburgh against the wishes of communities and local representatives across the country,” he said.
“This is a clear SNP power grab. We would amend planning laws, so that the Scottish Government cannot overturn a local planning decision.
"This would ensure that major developments require engagement with communities and that national infrastructure needs to deliver clear local benefits to those that will be affected by it.”
The Scottish Conservatives are the fourth party to launch an election manifesto for the May 6 election.
How do the Torie’s manifesto spending figures add up?
The Scottish Conservatives have offered extra spending on the NHS and childcare, as well as investing in new training schemes and apprenticeships, while other measures include doubling the Scottish Child Payment, free lunches and breakfasts for all primary pupils, and increases in the allowances to carers.
But while the Tories questioned the SNP’S maths last week, claiming its manifesto spending spree would need the Scottish Government budget to more than double to meet the pledges, what about their own costings? Do they add up?
HEALTH
Certainly the SNP has already claimed that the Scottish Tories’ proposals would see
Gina Davidson
cuts to the NHS budget while also offering tax cuts for the wealthiest in our society but according to the Institute of Fiscal Studies, the Conservative manifesto pledge of £2 billion for the NHS over the next four years is “at least as generous as the SNP’S" despite the headline figure cited being lower.
TAX
So if the health budget is out, what about raising cash for spending in the form of tax? The SNP has pledged to freeze income tax over the course of the next parliament, while Douglas Ross says he’d like to be able to announce a cut in income tax by 2025-26.
The IFS says that the Conservatives are certainly saying more on tax than the SNP and proposed reductions to Land and Buildings Transactions Tax and reforms of small business rates relief are “welcome”.
COUNCILS
Despite the manifesto containing little on social care – both Scottish Labour and the SNP have promised the creation of a National Care Service and the abolition of all nonresidential charges – the IFS says the pledge to ensure that Scottish councils receive a set percentage of the total Scottish Government budget means that councils should see cash-terms increases in grant funding of around four per cent each year.
BUSINESS
The Conservatives are more definite about cutting business rates – but only temporarily.
They propose a freeze in 2022-23, at a cost of £72m, and a further 25 per cent discount in that year for the retail, hospitality and leisure sector in 2022-23, costing £181m.
But the IFS warns: “The Conservatives have not found money for these reductions to last beyond next year. From 2023-24 onwards, the only definite change proposed from what is currently planned is to remove ‘cliff edges’ in Scotland’s system of small business rates relief.”
The main permanent tax commitment is to increase the threshold for LBTT to £250,000, taking all purchases below that level out of tax and reducing the tax on purchases above that level by up to £2,100.