Chamber
Meeting of the Parliament 14 April 2010
14 Apr 2010 · S3 · Meeting of the Parliament
Item of business
Local Government Finance (Scotland) Amendment Order 2010
We are happy to support the council tax freeze this year, as we have done in previous years. It is welcome for council tax payers up and down the country and stands in pleasant contrast to the significant increases that were made under the previous Administration.
From what we have just heard from Michael McMahon, one might think that thousands are marching on the streets to demand council tax increases. It is clear that the council tax freeze has been a success not just in forcing councils to be more prudent in managing their own resources but—I congratulate the SNP on this—in taking the heat out of the issue of local government finance. The council tax freeze, taken together with the abandonment of the proposals for the discredited local income tax, has brought us to a much more satisfactory position for the funding of local government than we were likely to be in without it.
We know that councils are planning on the basis of a 12 per cent reduction in their expenditure over the next three years, based on what every independent forecaster expects to be the position in Scottish spending regardless of who wins the general election. The pressures that were identified in Michael McMahon’s speech will only get worse. I was interested to see that Unison, which he prayed in aid, has already started spending a lot of its members’ money to campaign against a Conservative Government that has not yet been elected. He might just want to consider the impact of the spending reductions that have happened as a result of the Labour Government in Westminster and how long they will apply, not just to the Scottish Government but to every local authority in Scotland.
As I have said in the chamber previously, the reductions also have an impact on the voluntary sector. In too many local authorities, the voluntary sector seems to be the soft touch: the groups that lose out are not council groups but groups in the voluntary sector. Councils should look long and hard before they put the voluntary sector on the receiving end of the reductions in spending. Some local authorities—Glasgow City Council is a good case in point—have behaved as if voluntary groups are simply dispensable and as if local authorities cannot bear any spending reductions. That cannot be right.
Michael McMahon also said that the council tax freeze has been underfunded. I do not agree: the council tax freeze has been fully funded in every year of its implementation. However—this may be where the issue arises—this Government, like previous Governments, has passed additional responsibilities to local authorities without fully funding them. That has given local authorities the impression that the council tax freeze is underfunded. From memory, I think that the council tax freeze has actually been overfunded—I think that the figure in year one was £56 million rather than £70 million, but the problem is that the Government has loaded local authorities with other responsibilities and failed to fund them.
Usually in these debates, we discuss the allocation methodology by which the Government grant is distributed. There is a serious issue here. With COSLA part of the review process, it is difficult to see how there will ever be a change of any substance in the distribution formula for Government grant, which will lead to many parts of the country wondering when they will ever get any positive change. COSLA must simply be taken out of the process for underwriting the allocation formula if we are to get any change on that issue.
People will not be unhappy that the council tax has been frozen, and nor will they believe that every problem that local authorities face is a result of the freeze. Every part of government is facing difficult times, not just this year but in the years ahead, and it is far better that all of us, including local authorities, face up to that and start planning for it, rather than simply try to blame everyone else.
14:48
From what we have just heard from Michael McMahon, one might think that thousands are marching on the streets to demand council tax increases. It is clear that the council tax freeze has been a success not just in forcing councils to be more prudent in managing their own resources but—I congratulate the SNP on this—in taking the heat out of the issue of local government finance. The council tax freeze, taken together with the abandonment of the proposals for the discredited local income tax, has brought us to a much more satisfactory position for the funding of local government than we were likely to be in without it.
We know that councils are planning on the basis of a 12 per cent reduction in their expenditure over the next three years, based on what every independent forecaster expects to be the position in Scottish spending regardless of who wins the general election. The pressures that were identified in Michael McMahon’s speech will only get worse. I was interested to see that Unison, which he prayed in aid, has already started spending a lot of its members’ money to campaign against a Conservative Government that has not yet been elected. He might just want to consider the impact of the spending reductions that have happened as a result of the Labour Government in Westminster and how long they will apply, not just to the Scottish Government but to every local authority in Scotland.
As I have said in the chamber previously, the reductions also have an impact on the voluntary sector. In too many local authorities, the voluntary sector seems to be the soft touch: the groups that lose out are not council groups but groups in the voluntary sector. Councils should look long and hard before they put the voluntary sector on the receiving end of the reductions in spending. Some local authorities—Glasgow City Council is a good case in point—have behaved as if voluntary groups are simply dispensable and as if local authorities cannot bear any spending reductions. That cannot be right.
Michael McMahon also said that the council tax freeze has been underfunded. I do not agree: the council tax freeze has been fully funded in every year of its implementation. However—this may be where the issue arises—this Government, like previous Governments, has passed additional responsibilities to local authorities without fully funding them. That has given local authorities the impression that the council tax freeze is underfunded. From memory, I think that the council tax freeze has actually been overfunded—I think that the figure in year one was £56 million rather than £70 million, but the problem is that the Government has loaded local authorities with other responsibilities and failed to fund them.
Usually in these debates, we discuss the allocation methodology by which the Government grant is distributed. There is a serious issue here. With COSLA part of the review process, it is difficult to see how there will ever be a change of any substance in the distribution formula for Government grant, which will lead to many parts of the country wondering when they will ever get any positive change. COSLA must simply be taken out of the process for underwriting the allocation formula if we are to get any change on that issue.
People will not be unhappy that the council tax has been frozen, and nor will they believe that every problem that local authorities face is a result of the freeze. Every part of government is facing difficult times, not just this year but in the years ahead, and it is far better that all of us, including local authorities, face up to that and start planning for it, rather than simply try to blame everyone else.
14:48
In the same item of business
The Presiding Officer (Alex Fergusson)
NPA
The next item of business is a debate on motion S3M-6127, in the name of John Swinney, on the Local Government Finance (Scotland) Amendment Order 2010.14:34
The Cabinet Secretary for Finance and Sustainable Growth (John Swinney)
SNP
On 10 February Parliament approved the Local Government Finance (Scotland) Order 2010, which enabled Scotland’s local authorities to set their revenue budget...
Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD)
LD
In the cabinet secretary’s press release yesterday, he highlighted the measure as a £420 million tax cut. Any Government initiative of that scale should come...
John Swinney
SNP
As Mr Purvis will be aware, the Government undertakes equality impact assessments across its budget proposals. Such assessments come under the statement that...
Michael McMahon (Hamilton North and Bellshill) (Lab)
Lab
When people are having to go without, it would be perverse for anyone to consider the assistance that is being provided and say that because it is insufficie...
Derek Brownlee (South of Scotland) (Con)
Con
We are happy to support the council tax freeze this year, as we have done in previous years. It is welcome for council tax payers up and down the country and...
Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD)
LD
The Parliament will not block the order today. It is no surprise that there is no flexibility for local authorities—the order is an amendment to the local go...
John Wilson (Central Scotland) (SNP)
SNP
In examining the Local Government Finance (Scotland) Amendment Order 2010, it is important to recognise the contribution of the cabinet secretary, who has ac...
John Swinney
SNP
In the course of the debate, Mr Brownlee raised the issue of the effect on the voluntary sector of local authority funding decisions. For the record, I state...