Seeking solutions to taxing issues in Falkirk

Road works are part of the services carried out by Falkirk Council
Road works are part of the services carried out by Falkirk Council

Councils across Scotland are only weeks away from revealing how they plan to balance their books in the coming year.

Politicians and local authority officials in Falkirk are no different from their counterparts elsewhere in acknowledging that they face a tough task, bringing the Scottish Government’s council tax freeze sharply into focus.

While effectively restricting councils from increasing the local tax bills it sends to residents, they do get increased settlement from central government. The freeze has been in place since 2007 and the Scottish Government wants it to remain till 2017, arguing it protects councils from the impact of Westminster cuts.

Difficult decisions will have to be made as demands continue to grow – a larger ageing population and increased energy bills just two of the factors pushing up council costs.

How we pay for local government has never been a more pertinent question and a discussion document prepared by Unison Scotland, the country’s largest public sector union, focuses on the issue.

It notes: “The funding of local government has been a difficult issue for political parties. because change is viewed as being politically challenging.

“However, we simply cannot go on as we are with short-term fixes that damage services and undermine local democratic accountability. We need to develop a new consensus that provides a long-term solution.”

While acknowledging that taxation is the fairest way to fund local services, it states the current tax system could be fairer. In particular, it wants to see “super rich” companies and individuals pay their fair share.

The union document states: “In order to ensure that we all pay a fair proportion, all forms of wealth need to be taxed. Currently the system taxes wages more highly than other forms of wealth leaving ordinary workers bearing an unfair burden.”

Unison said current options for local authority funding in Scotland are:

lOngoing council tax freeze

lLocal income tax

lLand value tax

lFairer property tax.

In 2006, the Burt Review covered all these in detail and after weighing up the options, it recommended taxing the capital value of property taxes. But the main recommendation was shelved because it was close to an election.

Unison highlights how the current charges are based on outdated 1991 property values leaving council tax out of touch with real property values. It also pointed out the freeze was to be a temporary measure until the SNP government could introduce a new local income tax. But following critical response to consultation no further proposals were brought forward and the freeze remains in place.

Local income tax would see only 60 per cent of people contributing and cause massive issues in collecting. While a land value tax would appear to be a good option, it would be more costly to collect as landowners are not easy to find and there could be problems working out land value.

Unison believes council tax can be reformed to deal with current issues, including a fairer banding system and regular revaluations.

However, it notes: “While reform is challenging, political difficulty is not a reason for avoiding a solution that pays for services and strengthens local democratic accountability.”