Urgent debate needed on how we fund local services...

Councils across Scotland have been hitting the headlines recently as they set out the scale of the budget challenges they face in the next few years. As readers of the Tele know, Inverclyde is facing the same challenges.

While we are in a relatively good position compared to many councils, in that we can set a budget for the next financial year 2015/16 without making damaging cuts to services, the following two years will be far more challenging unless both the UK and Scottish Governments adopt different policies in relation to public spending and taxation.

The initial reaction to the savings options released by Council officers has shown how unpopular a number of them are likely to be if the Council implements them.

The criticisms levelled at the Council on social media are no surprise, given that many come from people with a particular political agenda. Irrespective of the result of the recent referendum we would be facing the same, possibly greater, challenges.

I have been struck however by the number of people who are openly questioning the ongoing Council Tax freeze and now understanding the direct link between this and the impending cuts in services.

I’m sure that some readers would be surprised to know that the Council Tax in Inverclyde was last increased in April 2006. It was actually cut by a small amount in April 2007 by the then Lib Dem led Council. For the past seven financial years the Council Tax has been frozen and it will be frozen again next year as a condition of the Council’s funding settlement from the Scottish Government.

Assuming that without the freeze the Council Tax would have been increased each year by 3%, a household in the lowest Council Tax banded property is now £184 a year better off. A household in the highest band is £551 a year better off.

While everyone will welcome that their Council Tax has not increased it is clear that those in the most expensive properties have benefited most.

These figures are before we take into account the fact that the Council Tax Reduction Scheme currently pays out £6.7m a year in financial support to 12,180 of Inverclyde’s 38,653 households to help them meet the costs of the Council Tax.

Over 7,000, or 18%, of households in Inverclyde get a 100% reduction on their Council Tax bills, most of these being households in the lowest band of properties.

So in fact if you have qualified for 100% support due to your financial circumstances over the last 7 years you have had no benefit at all from the Council Tax freeze.

 In 2007 the then minority SNP Government pledged to abolish the Council Tax and replace it with a local income tax set and controlled by the Scottish Parliament rather than local Councils. They never introduced a bill into Parliament as they could not get other parties to support their proposal.

Seven years on we have a majority SNP Government and still there has been no progress on a replacement for the Council Tax, so it looks like it will be with us for at the least the next few years.

As I stated in a previous column, a 5% increase in the Council Tax would generate an additional £1.6m a year for the Council, which would go some way to avoiding a number of the worst cuts we face. Those on the lowest incomes would be protected in part or in full from this increase through the Council Tax Reduction Scheme.

Much of the debate during the recent independence referendum centred on funding for public services, and in particular the NHS.

The financial challenges faced by Councils means we urgently need a similar debate about what level of local public services we want and how much we are prepared to pay for them.