Scottish Government Faces Backlash Over Unconsulted Tax Freeze Plan

First Minister Humza Yousaf's decision to announce a council tax freeze without prior consultation with local councils has drawn widespread criticism, highlighting tensions between the Scottish Government and local authorities.

In addition, the decision was deemed to be contrary to a recent agreement reached with the Convention of Scottish Local Authorities (Cosla), which expressed concern at the lack of communication.

“This has longer-term implications for all councils right across the country, at a time when we know there are acute financial pressures, and where we are jointly looking at all local revenue-raising options.” Cosla

The organization emphasized the need for detailed discussions to assess the broader impact on councils and their budgets.

Council Decisions in the Wake of Tax Freeze Announcement

The councils were faced with difficult decisions after the announcement: whether to implement the freeze or go ahead with the planned tax increases. Some, such as Argyll and Bute, initially proposed significant increases, while Labour-led Inverclyde went ahead with an 8.2% rise.

However, a Scottish Government deal offering £147 million in compensation to councils accepting the freeze eventually led most to comply. Inverclyde residents then received a one-off rebate in May to offset the increase.

Political Reactions to Scottish Council Tax Freeze Decision

The decision not to reintroduce the freeze has garnered mixed reactions:

• Scottish Greens: Ross Greer criticized the council tax system as outdated, rooted in 1991 valuations that often result in disproportionate rates.
• Key reforms, such as doubling council tax on holiday homes, were cited as steps toward tackling broader issues like the housing crisis.
• The Greens advocate for a full revaluation of the property roll and a shift toward a progressive tax system.
• Scottish Liberal Democrats: Leader Alex Cole-Hamilton accused the government of disregarding council autonomy, calling its treatment of local authorities "contemptuous."

Financial and Strategic Impact of Dropping the Council Tax Freeze

During preparations for the Scottish budget, scheduled for December 4, the announcement that the council tax freeze would not be reinstated was confirmed. SNP strategists made it clear that the freeze, initially scheduled to last a year, would not be reinstated.

The debate underscores ongoing challenges in balancing national policies with local fiscal autonomy. With calls for systemic reform growing louder, the spotlight remains on the Scottish Government's forthcoming budget announcement.