Today (2 March 2016) Nicola Sturgeon set out the SNP’s plans make the funding of local services fairer – in a way that’s reasonable, measured and balanced. At the same time the proposals will boost investment in our schools, provide additional support for children in low income households, and ensure councils continue to be properly funded while becoming more accountable.
Here’s what you need to know about our plan to make council tax fairer.
1. £100 million extra will be raised and invested in schools every year
Greater contributions from those living in the highest value properties will generate an additional £100 million every year. We are committed to working with local authorities to ensure this extra funding is invested in our schools.
2. At least three quarters of households will pay the same – or even less – than they do today.
We’re committed to a tax system that is proportionate to people’s ability to pay. That’s why our plans will ensure those living in lower-band properties A to D – at least 75 per cent of all households in Scotland – will pay the same, or even less, than they do today in council tax.
Our proposals mean that the average band E household will pay around £2 per week more, while the average household in the highest band will pay around £10 a week more.
3. We’re providing financial relief to low income households.
In the face of Tory austerity and calls from Labour and the Lib Dems to hike taxes across the board, we will provide further financial relief to low income households.
We’ll extend the council tax reduction scheme to low income households with children. This will directly benefit 77,000 low income households by an average of £173 per year, including 140,000 children.
Many low income families living in high band properties will already be in receipt of council tax reduction, but we’ll extend this to put in place an exemption for higher-band households who are below average earnings – up to a maximum of £25,000 net income. This will exempt 54,000 households from changes – a third of them pensioner households.
4. Households in Scotland will still, on average, pay less than households in England.
Since 2007, we’ve put in place a council tax freeze in Scotland, providing households with financial relief in tough times. Meanwhile, between 2007-08 and 2015-16, council tax in England has increased by 12 per cent and soared by 32 per cent under Labour in Wales.
Our proposed changes mean that households in Scotland, across all bands, will still benefit from lower average council tax bills than households in England do. And, bills across all bands will be lower than they would have been had the council tax freeze not been in place for the past eight years.
5. Councils will continue to be properly funded and become more financially accountable too.
From April 2017, the council tax freeze will be lifted. Local authorities will be able to increase council tax by a maximum of 3 per cent a year, which could generate an additional £70 million. This will ensure we do not return to the sky high annual council tax hikes we saw in the past. In the years before the SNP took office, council tax had risen by 60 per cent, with many people paying more in council tax than they were in rent or mortgage.
Councils will continue to benefit from the £70 million every year the Scottish Government has provided to allow them to freeze council tax. This means that any revenue they choose to raise by increasing council tax will be genuinely additional.
If re-elected this May, we will also consult with councils on the assignment of a portion of devolved income tax raised in Scotland, which will reduce reliance on grant funding from central government.